Student Credit Card and Credit Education Blog

The Credit Card Accountability Responsibility and Disclosure Act of 2009, which amends the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit, has added benefits designed to protect consumers.

In this bill college students in particular have been singled out for special treatment.  Below are a few of the changes on the horizon which are scheduled to take hold in February 2010.

• Prohibits extensions of credit to consumers under age 18, unless they are emancipated under state law, or the consumer’s parent or legal guardian is designated as the primary account holder. Minors are allowed to have a credit card in their name on a parent or legal guardian’s account.

For full-time or part-time students attending an institution of higher education who are between 18 and 21 years of age, the legislation reads:

• Limits the credit line from any one credit card to the greater of 20 percent of annual income or $500, unless there is a co-signer.

• Limits the total credit line from all credit card sources to 30 percent of annual income, unless there is a co-signer.

• If there is a co-signer, requires written co-signer approval before granting any increase in credit line.

• Prohibits creditors from granting more than one credit card account to college students who have no verifiable annual gross income and already have a credit card account with that creditor, or any of its affiliates.

With all these changes in the pipeline it may be prudent to apply for a student credit card sooner rather than later.