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Credit Card Legislation – Companies No Longer Allowed to Offer Perks

Free pizza, free coffee, and other goodies just by showing up? Why not. This is the reasoning on the minds of college students when they are approached by credit card marketers that promise these freebies for nothing. But there is a catch. When you arrive at the restaurant to booth to claim the free stuff, you’ll be asked to sign up for the credit card to get free food.

It is no wonder that the average college student has an outstanding debt of $4,100 in 2008 against the $2,900 figure back in 2004. Fortunately, measures are being undertaken to stop these tactics. Come February 22, 2010, college students will no longer be tempted by goodies offered by these credit card companies. This is the time when marketing restrictions on credit cards will take effect. It is expected that this will result to less debt for consumers below the age of 21.

Oftentimes, companies expect college students or those falling under the same age bracket to stay loyal to the first credit card they have. That’s the reason why they specifically target this segment with endless marketing ploys; sometimes going to the extent of getting this information from colleges itself for a fee. Students end up getting cards with high fees and high interest rates that can easily accumulate debt.

The amount of credit cards available to college students today has become worrisome. In fact, a significant number of younger consumers have four or more credit cards at their disposal. And only 17 percent of them said they always pay off debts in full every month.

Despite the less-than-stellar facts surrounding credit card usage, it has its good points. Some students use their cards to pay for necessities like textbooks. Another big change underway requires Americans under the age of 21 to get a co-signer if they cannot provide a proof of income. In essence, the co-signer (parent or older friend) is taking responsibility for the action of the college student.  Credit cards can also be beneficial for those under banked consumers who are continually charged huge debit card fees by their banks.

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