Comments on: Credit CARD Act of 2009: What Young People Need to Know http://www.thefinancialstudent.com/2010/02/22/credit-card-act-of-2009-what-young-people-need-to-know/ Finance for Young People Fri, 16 Dec 2011 13:55:01 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Neil http://www.thefinancialstudent.com/2010/02/22/credit-card-act-of-2009-what-young-people-need-to-know/comment-page-1/#comment-156 Neil Fri, 26 Feb 2010 17:19:36 +0000 http://www.thefinancialstudent.com/?p=1000#comment-156 The CARD act is funny. Another blogger, Frank at badmoneyadvice.com, went to the effort to read the Fed's regulations that implement the act, and found that it actually doesn't place any greater onus on 18-21 year olds. The language of the Act is slightly different. For over 21s, the card company is required to "consider your ability to pay any new or additional debt before approving a credit card application" before issuing a card. For 18-21s, the wording is that the young adult must have "an independent ability to make the minimum payments." The regulation breaks these down to meaning the same thing. How Frank put it: "the special rule for consumers under 21 is that they are subject to the same rules as everybody else." And how do they assess your ability to pay? They can request proof of income, or they can just make inferences from your credit report...or even just take your word for it. Like they've always done. Frank has a couple of great articles on these, worth reading: http://badmoneyadvice.com/2010/02/the-card-act-does-not-ban-cards-for-under-21s-after-all.html http://badmoneyadvice.com/2010/02/another-way-the-card-act-will-not-help-me.html And of course, if you want to get a credit card, make sure you actually go into a bank some distance from campus. That way, you can legally get some swag. The CARD act is funny. Another blogger, Frank at badmoneyadvice.com, went to the effort to read the Fed’s regulations that implement the act, and found that it actually doesn’t place any greater onus on 18-21 year olds.

The language of the Act is slightly different. For over 21s, the card company is required to “consider your ability to pay any new or additional debt before approving a credit card application” before issuing a card. For 18-21s, the wording is that the young adult must have “an independent ability to make the minimum payments.”

The regulation breaks these down to meaning the same thing. How Frank put it: “the special rule for consumers under 21 is that they are subject to the same rules as everybody else.”

And how do they assess your ability to pay? They can request proof of income, or they can just make inferences from your credit report…or even just take your word for it. Like they’ve always done.

Frank has a couple of great articles on these, worth reading:
http://badmoneyadvice.com/2010/02/the-card-act-does-not-ban-cards-for-under-21s-after-all.html
http://badmoneyadvice.com/2010/02/another-way-the-card-act-will-not-help-me.html

And of course, if you want to get a credit card, make sure you actually go into a bank some distance from campus. That way, you can legally get some swag.

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