Effective February 22, 2010 credit card companies will be required to follow the guidelines established by the Credit Card Act of 2009
Below is a brief summary of some of the key changes that will impact college students and their parents.
Restrictions on Marketing to College Students:
In exchange for applying for credit, card companies are not permitted to give gifts (i.e. T-shirts, pizzas, mugs, etc) to college students on or near campus grounds
Increased Parental Involvement:
Cards cannot be given to those under 21 unless they get an adult co-signer, OR they provide proof that they have the ability (i.e. proof of sufficient income) to repay the debt.
Card companies cannot send prescreened card offers to anyone under 21, unless they have agreed to get card offers.
Card companies cannot increase the credit limit on co-signed credit cards held by college students under 21 unless they have gotten written permission from the co-signer.
Limits on penalties and fees
Over limit fees may not be charged unless the card user has provided permission for transaction over their credit limit.
Card companies will now be required to disclose the following on the card statement:
-the length of time, and the total dollar amount of interest that would be needed to repay the card balance, if only the minimum required monthly payment.
-the monthly payment amount needed to pay off the the total balance in 36 months
– a phone number to call for credit counseling services.
Card statements need to clearly disclose the required due date, late payment charge, and any late payment penalty rate.
College Students and Parents Affected by New Federal (Credit Card) Laws
What You Need to Know
Most American college students use credit cards. However, many young people don’t always handle them properly, and often face late fees, increased rates, and high balances. Many of these problems are due to a lack of knowledge, or simply not handling cards responsibly. Although many of these problems are the result of bad habits of young adults, consumer groups believe many of these issues are due to questionable practices of credit card companies. To help address these issues, Congress passed new laws to restrict the ways card companies handle credit card arrangements with consumers.
Effective February 22, 2010, credit card companies will be required to follow the guidelines established by the Credit Card Act of 2009
The changes generally require credit card companies:
-to increase disclosures to card holders
-to provide more lead time or advance notice when changing terms
-to limit their marketing activities on or near college campuses
-to require increased parental involvement in credit card activities of individuals under 21.
More detail of these laws and other money issues affecting young adults and their parents are available on the educational website MoneyManagement101.org
For More Details see specific post http://moneymanagement101.org/important-cred…s-need-to-know/