Credit Card Age Requirement
In 2009 the Credit Card Accountability Responsibility and Disclosure Act was signed by President Obama into law. Among many other things it did for consumers, the law set an age requirement or age limit for new credit card applicants.
The law states credit card companies cannot issue a credit card to consumers under the age of 21. If you are consumer under the age of 21, you must have a cosigner for your credit card. A cosigner could be a legal guardian, parent, or another individual over the age of 21. Other requires, if you don’t meet the credit card age requirement, are the person under the age of 21 must show proof that they will be able to repay the debt as well as the cosigner has the ability to repay the debt.
On the marketing side, credit card companies may not send offers to consumers under the credit card age requirement unless the consumer has opted in to receiving the offers. Credit card companies must do away with certain marketing techniques on college campus such as giving away t-shirts in exchange for a completed credit card application. The act also requires complete disclosure by credit card companies of their marketing efforts on college campuses.
These restrictions are seen be some as well over due. The campus marketing efforts by credit card companies were often seen as predatory in nature and many college students find themselves several thousands of dollars deep in credit card debt at the time of graduation. Others find the credit card age limit of 21 too high, stating a consumer is usually recognized as adult at the age of 18 and should not need a cosigner at that age.
The fact is there is little formal education about money. Consumers who get their first credit are usually clueless to what trouble they can find themselves in if they abuse their new spending power. The requirement of a cosigner adds a mentor style relationship to getting a credit card. Also, being a cosigner means you will have a more active role ensuring the debt is repaid because the cosigner’s credit worthiness is also on the line.
The overall effect will take time to measure but remember we Americans love to spend on credit.
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Tags: co-signer, credit card
Posted in Credit Cards
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