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College Credit

College CreditCredit cards are an important financial tool for students, especially those living away from home. They provide a flexible and convenient way to pay for books and other essentials, and they provide an important safety net for emergency expenses. Credit cards provide an opportunity to establish and maintain good credit; a positive credit history allows young adults to rent an apartment, finance a car, or purchase a home after graduation.

Nearly half (45 percent) of college students have a credit card, and nearly half of all students with a card report using their card at least once a week (Student Monitor, 2009). Of those with a card, 60 percent pay their credit card bill in full each month, (Student Monitor, 2009) which is higher than the general adult population average of 50 percent (Federal Reserve). The average balance among the 40 percent of students who do carry a balance is $495 (Student Monitor, 2009).

New provisions in the Credit Card Act will limit on-campus credit card solicitation and make it harder for some students to obtain cards. Effective Feb. 22, 2010, the Credit Card Act prohibits card issuers from offering inducements for applying for a card on or near campus or at an event sponsored by or related to the school. The Act also requires any credit card application filled out by a person under the age of 21 to have the signature of a cosigner older than 21, or the ability to demonstrate an “independent means” of repaying any debt incurred.

While offering further protections to students is understandable, the result will be that responsible adults will find it more difficult to get credit cards.