According to student lender Sallie Mae, 30% of college students put at least some of their tuition costs on credit cards. And only about 17% pay off their balance monthly. Average balance? $1,600.
But soon the rules for credit cards for anyone under 21 are going to be changing. So if you’ve got a college kid, you really need to be taking notes.
Courtesy of the Credit Card Act of 2009, kids under 21 without proof of income will need a cosigner to get a credit card.
For parents, that means they’re putting their credit rating on the line when they allow their student to use it… or abuse it.
Another change in the rules says that credit card companies can no longer offer T-shirts or other gifts to get kids to sign up for cards… at least, not on campus.
These new rules don’t take affect until February. So if you like the idea of your kid having a credit card, but don’t like the idea of having to co-sign for it, best you have them apply before then.
College kids can study cards online at any number of comparison sites. And before selecting one, they should. It makes for a good lesson in real life… and an early opportunity to avoid the school of hard knocks.