From February 22 a new set of rules for credit card companies came into effect and one of the things tackled was the way credit card companies sign-up students. The way it was in the past was that a credit card company could go to a college campus, offer students a freebie in exchange to signing up for a credit card. The sad thing is the freebie could be something as value-less as a T-shirt but young people are a good target as they wouldn’t know much about credit cards and many would be delighted just to get a card they can use to buy things. These often leads to a spiral of bad debt which leaves them only able to get bad credit credit cards by the time they join working life.
All that has now changed; credit card companies are effectively banned from offering incentives on or near college campuses, what’s more, if they wish to sign up anybody under the age of 21, the applicant will have to prove they have an income that will sustain the debt that will arise from credit card usage.
The laws also require credit card companies to disclose the dangers of paying just the minimum payment. This is especially important because many people, especially the young adults just pay the minimum amount required not knowing that this exacerbates their debt problem.