A new credit card legislation that is set to take effect this month will be affecting college students around the nation and on campus.
In May 2009, President Obama signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 into law. The legislation will be put into effect Feb. 22.
Out of a number of provisions including more time to pay monthly bills and clearer due dates, the term that will most greatly affect students is the limit on issuing credit to young adults.
The bill states that credit cards cannot be issued to anybody under the age of 21 without the signature of an adult co-signer or without proof of sufficient finances. In addition, companies who offer free gifts such as T-shirts or pizzas as incentive for students to sign up for credit cards must stay outside 1,000 feet of college campuses.
College sophomore Emily Wang, who has a credit card under her own name, said she thought the law was a bad idea.
“Most college students aren’t riddled with debt,” Wang said, adding that she uses her credit card to build good credit. “If you can’t pay it off, don’t get a credit card in the first place.”
Associate Professor of Philosophy Michael Sullivan said that while he does not take on a libertarian point of view, a total ban is not the answer either.
“We don’t want some sort of a draconian world,” he explained. Credit cards, he said, should not be limited to young adults who can show an income history because “most 18-year-olds don’t have income histories.”
Instead of banning young people from signing up for credit cards without co-signers, Sullivan said, limiting the kinds of practices credit card companies can engage in is a better idea.
“If credit card companies want to take risks, let them take risks,” Sullivan said of issuing cards to young adults.
College sophomore Gloria Kang, who has a credit card under her own name, also said that limitations on issuing credit cards are not the answer.
“Why not lower the funds available?” College sophomore Gloria Kang asked, adding that lowering the spending limit on cards for younger credit card users would be more effective than stopping students from signing up for cards on their own.
“Let students take the risks. Teach them financial responsibility.”
Kang said she feels the 18 to 21 age group is being unfairly targeted.
“Just because you’re older doesn’t mean you’re going to be more responsible with your money,” she said.
Wang said she thinks the government should focus on other debts of greater concern to students, such as student loans.
Although College sophomore Josh Booher, who has two credit cards under his name, disagrees with the new legislation, he said debt among young adults seems to be a large enough problem for new laws to take effect.
“It does seem like a little bit too much regulation on something people can decide for themselves, but it’s enough of an issue to make this kind of legislation,” Booher said.
Twenty-one is too old for anybody to be monitored, Booher said.
“By the time you’re 21, you’re more or less independent,” he said. “You don’t need your parents co-signing.”
As a 19-year-old student, Wang said that she and others her age have already taken on a number of responsibilities and that financial responsibility is one of them.
“Who’s job is it to tell me, ‘Oh, this is when you’re old enough?’” Wang said.
Kang said that handling her own credit card is a responsibility and a step towards independence that she wants to take, adding that she does not want to be an “additional burden” on her parents.
Booher said he thinks it is unfair to make it more difficult for students to get credit cards because it assumes students are reckless spenders.
“[Credit cards] are such a convenience,” Booher said. “It doesn’t necessarily mean you’re spending recklessly. You’re just doing something that’s more convenient for you. At this age, if nothing else, it’s good to have a credit card in case of emergency.”
Having a credit card is necessary for students who are going to college out of state, Wang said, especially for large expenses such as books and airline tickets. She added that she prefers her own credit card because she does not want her parents to be in control of how she’s spending and what she’s spending her money on. The new law, she said, is an invasion of her privacy.
Kang said that the law is particularly unfair for people who do not have a co-signing adult.
“Sometimes people don’t have a proper guardian who they can co-sign with, and they might be the types of people who need the credit cards most,” she explained.
College sophomore Eileen Shi said that she thinks the concept of the law is good, but that it’s not being executed properly.
“There are so many variables to consider especially with people who are estranged from their parents for who have family problems,” Shi said. “To deny them a credit card because of this I feel would be unfair.”
College sophomore Erin Park, who now has her own credit card after a period of co-signing with her parents, said that she sees no harm in the new legislation.
“I think that they should make sure you’re responsible,” she said. “When kids are in debt, their parents end up paying it anyway. Making them co-sign is not really changing anything.”
Park said that having a parent co-signer can help students control their spending wisely.
— Contact Alice Chen