New Credit Card Law Aims To Protect Students

Fresno, CA College often gives young people their first taste of financial freedom, and credit cards have traditionally been a big part of money lessons learned on campus. But a new law will change that, and if parents aren't careful, it could be costly.

College students use credit cards for everything from textbooks to tuition to dining out. But the new credit card reform act, set to go into full effect on Monday, will put a limit on cards for most students.

Some experts say, that's a good thing. "Too many young people have come out of college deep in debt and with significant black marks on their credit, because of irresponsible spending and a misunderstanding of how the credit system works," said Adam Levin with

The new law prevents anyone under 21 from getting a credit card unless they have an income to pay the bills. If they don't have that, they'll need a cosigner on the application, most often a parent. But when parents co-sign, they should keep in mind that their student's debt becomes theirs too.

"When you cosign for someone, you owe the money. And if they pay late, it goes on your credit record," said Gail Hillegrand with Consumers Union.

So if your student must have plastic, try a prepaid or debit card first. Use the experience to teach lessons about spending, until they can "graduate" to credit, at age 21.

Most college students are going to be 21 by the time they're seniors, and it's a perfectly good time to get that first credit card at the beginning of senior year.

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