New Credit Card Rules: No Teens Allowed!
If your child is in college or will be off to college soon, one of thing you might be concerned about is how easy it is for them to get credit–and the crazy things they will charge, like a slice of pizza, makeup and music CDs.
Well, your heart has been heard, and the new legislation restricts college students, under the age of 21, from getting a credit card without a co-signer from a:
Parent must co-sign in order for a credit card to be issued for anyone under the age of 21. Written permission from the parent, guardian or spousal co-signer is also required for any increase in a card’s credit line.
Same as parent above.
- Legal Spouse
If a student married young and is still under the age of 21, he/she will have to get his/her spouse to co-sign in order for them to get a credit card and credit card increases.
Exemptions to the Co-Signer Requirement:
Student’s with their own income, of course, can ask for an exemption to the co-signer requirement and must submit proof of their income before the co-signer requirement will be lifted.
While I agree with that most kids under 21 shouldn’t be allowed the amount of credit they are given, there are couple of things I’m concerned about:
(1) Kids are crafty. What if kids forge their parents’ signature and arrange to have the bill sent to a different address or their dorm room? The only way you would know is if you check your credit history often, or if you got an unexpected bill or collection call. What then? Would you have to file charges against your child in order to not be responsible for their new-found debt?
(2) If you co-sign, the debt is yours. Just like any other co-signer agreement, should the child default on the debt, the parents, in this case, will ultimately be responsible for the debt. What does that teach the kid–that they can be irresponsible with money and their parents will have to foot the bill?
To learn more about how the new credit card rules will affect your college-aged child, read the senate bill.
If you’re like me, you have taught your children how to be responsible with money throughout their growing up. You’ve instructed them about the value of good credit and the benefits of living as debt free as possible. If not, remember, it’s never to late too late to start, the most important thing is that you start.
Here are some resources to get you started: