This act will place limits on credit card companies when it comes to imposing punitive interest rates and late fees. The law would also bar students under the age of 21 to apply for credit cards, unless a parent or guardian cosigns it.
Its a very interesting subject, which might be put into effect in December of 2009!
3 comments:
This is a good idea. I agree with the statement that young adults should try to safely build a credit score with the assistance of their parent by possibly co-signing on a car loan or getting a credit card for purchases easy to track, such as using it only to buy gasoline.
I wonder how this will effect the retail industry? Many popular stores such as Banana Republic and Express now offer store credit cards, and in the past one did not have to be 21 to receive these cards.
This is a good idea that young adults should try to build a better credit score and to have the credit card companies help in this goal. However, I think that one of the most important points to this article that may have gone unnoticed is that younger children of even grade school age are beginning to be educated in personal finances. If we educate people younger on how to maintain good finances and credit, there may not even be a need for this provision on those adults under 21 in the future.
I think this new act is a good idea as long as it is upheld and people actually use it to their advantage. Getting younger kids educated about finances early on is a terrific way to ensure that in future years this act will not be needed because we will able be financially educated. John is completely right about stores offering special credit cards to kids, which could put a kink in this program because that is where a lot of money is spent while in college.
People need to grow up and be held accountable for their mistakes ie their credit card, but having cosigners is a great way to make sure people act responsibly because not only are they affecting their own credit score but their cosigner as well.
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