Marketing to college aged students has been an ethical issue for years for lenders like Bank of America, Wells Fargo and JP Morgan Chase. The government has finally put in their two cents on the issue in the new Credit Card Accountability and Responsibility Act of 2009 and they are putting in some serious restrictions.
A few of the large banks have offered personal financial education in an attempt to overcome those ethical issues. Despite those efforts, 84% of students have at least one credit card, with the average student having 4.6. The average balance on a student card is $3,000. On top of student loans, the average student is leaving college with more debt than they typically can handle.
So, how will the act attempt to provide credit card debt help?
- No more freebies! Issuers cannot offer free items like t-shirts and pizza slices to entice students to sign up for credit cards on college campuses, college sponsored events (including sporting events), or within 1,000 feet of the campus.
- Anyone under 21 cannot secure a credit card without either an adult co-signer or proof of enough income to pay at least the minimum payment.
I hope that the new rules set forth will be able to put a dent in the massive amount of student debt. Unfortunately, something tells me that without any sort of education or free information about good spending practices and building credit, students can get into just as much trouble. They will be fair game to the credit industry after 21-and their naivety will only serve the interests of the credit card companies.
What other changes have come with the new credit card laws? The biggest change you will notice will probably be the ones to your statement. The highlights of the new format include:
- A structured format that features the fees and interests involved in your bill.
- A special section that explains how much time you will spend and how much interest you will pay for simply making the minimum payment every month. Some statements will even include a comparison of what paying more than they minimum can do to your balance.
- A toll free number for credit counseling. On top of those changes, everyone should receive their credit card statement at least 21 days before the due date.
There are many things these new laws can help us see-for a large amount of people, the newest format will only make it more clear that their need for credit card debt help is dire.
If you've already gotten in trouble with your credit cards and are looking for a permanent solution to your credit card debt, consider Missouri and Illinois Chapter 7 bankruptcy. You could be doing yourself the biggest favor by simply researching what kind of help Missouri and Illinois Chapter 7 can offer in your situation. Find an reputable attorney in your area who is willing to offer you free articles, blogs, bankruptcy faq, and even publications to educate you before you even step foot in an office.
Missouri Bankruptcy attorney James Brown has been working to relieve the debt of hard-working American families for over 15 years. He has dedicated his career to educating consumers about options for debt relief and has released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." You can request a free copy at http://www.castlelaw.net