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Credit aimed at students

By Lucy Lazarony · Bankrate.com
Tuesday, January 18, 2011
Posted: 4 pm ET

Despite new restrictions imposed by the Credit Card Accountability, Responsibility and Disclosure Act, college students continue to receive credit card offers, according to an article in The Wall Street Journal.

The Journal cited a study by professor Jim Hawkins at the University of Houston Law Center that surveyed more than 300 college students in November.

According to the study, 76 percent of those students who were under the age of 21 said they had received a credit card offer since the start of 2010.

About one-third of the freshmen students surveyed already had a credit card when they arrived on campus. And 29 percent of students under the age of 21 who received a credit card since the start of the academic year used student loans as part of the income reported to issuers on their card applications.

The Credit CARD Act prevents credit card issuers from giving a person between the age of 18 and 21 a credit card without a co-signer or proof of income. This rule has been in place since Feb. 22, 2010, when the largest set of provisions from the CARD Act took effect.

The CARD Act also restricts the marketing of credit cards to college students.

If you are under the age of 21, prescreened credit card offers may not be mailed to you unless you've opted in with the credit reporting agencies to receive such offers. And credit card marketers must stay at least 1,000 feet away from university campuses if they are offering students free T-shirts and other giveaways to entice students to sign up for credit cards.

According to the study reported in the Journal, 73 percent of the freshmen surveyed reported seeing card issuers marketing to students off campus.

As for managing credit card debt, 64 percent of students surveyed said they planned to pay their own debts. Twenty-one percent of students said they expected someone else to pay their debts.

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