Student Credit Cards And The New Credit Card Law

May 30th, 2009

choosecardsThe start of the coming school year will likely see a different scene in campus quadrangles than it was in the past.  With the new credit card law that prohibits offering accounts to students under 21 (with a few concessions), it’s highly possible that we’ll see a drastic reduction in the number of booths offering a selection of giveaways (like shirts, iPods and restaurant coupons) to applicants.

Protecting Students

It’s easy to understand why the new laws have been set.  Over the last five years, the amount of debt students have been carrying across numerous credit cards (an average undergraduate has four) have seen an alarming rise.  Instead of finishing school with their financial life ahead of them, they find themselves mired neck deep in high-interest credit card debt.

Exceptions To The Rule

Under the law, young adults under 21 can still get a credit card, provided they are able to show proof of capacity to pay (e.g. having a job) or have a legal guardian willing to co-sign the account.  Otherwise, credit card companies may not issue them any plastic the same way convenience stores aren’t allowed to sell them alcohol.


With most student credit cards aggressively marketed to freshmen, a change in marketing tactics is obviously necessary.  However, it is highly doubtful that the rule will be enough to deter credit card companies from trying to get new sign-ups.  While the current schoolyear might see a tad less marketing activity on the part of the issuers, it’s not likely to last for long.  For the most part, expect them to regroup, lay out a new marketing plan and come back strong with a different approach in the coming years.

noel Posted in Student Credit Cards

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