Feds get credit for taking credit
n New law restricts credit card use for those under 21
By: Erica Horton
Issue date: 2/1/10 Section: News
Taking effect Feb. 22, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 will restrict anyone under 21 years of age from getting a credit card without a cosigner, unless they can prove they have a job and can handle payments on the card.
The new law also prohibits credit card companies from being within 1,000 feet of a campus when giving away free products to get students to sign up for their product.
Julia Heath, professor of economics, said the new law will help students, and The University of Memphis has not allowed credit card companies on campus for a while.
"We know from a lot of research that students are not very financially literate," she said. "Universities typically lose more students because of debt issues than they do because of poor academic performance."
Today, 84 percent of undergraduate students have a credit card, according to a national survey by private student loan company Sallie Mae.
Professor of economics Douglas Campbell said there is a reason why credit card companies set up on campuses.
"You don't see them with tables set up downtown offering free pizza and t-shirts," he said.
Campbell said students are not always fiscally sound and, though credit cards have the potential to help, they also have serious consequences students should consider first.
"College students tend to make good decisions but there's a lot to know. I'm an economist and I don't know everything I need to know," he said. "Credit cards weren't always passed around like confetti in a parade. They used to be given to people who proved they could handle it."
Tanasia Perkins, freshman accounting major, said she doesn't think she could handle having a credit card.
"I would max it out," she said. "I just use my debit card. A credit card is easy money that's not really yours. With debit, you know not to go over your limit because the money comes out immediately."
Senior business management major Daniel Millican has three credit cards. He said he thinks he's responsible with them, using them only for major purchases.
The new law also prohibits credit card companies from being within 1,000 feet of a campus when giving away free products to get students to sign up for their product.
Julia Heath, professor of economics, said the new law will help students, and The University of Memphis has not allowed credit card companies on campus for a while.
"We know from a lot of research that students are not very financially literate," she said. "Universities typically lose more students because of debt issues than they do because of poor academic performance."
Today, 84 percent of undergraduate students have a credit card, according to a national survey by private student loan company Sallie Mae.
Professor of economics Douglas Campbell said there is a reason why credit card companies set up on campuses.
"You don't see them with tables set up downtown offering free pizza and t-shirts," he said.
Campbell said students are not always fiscally sound and, though credit cards have the potential to help, they also have serious consequences students should consider first.
"College students tend to make good decisions but there's a lot to know. I'm an economist and I don't know everything I need to know," he said. "Credit cards weren't always passed around like confetti in a parade. They used to be given to people who proved they could handle it."
Tanasia Perkins, freshman accounting major, said she doesn't think she could handle having a credit card.
"I would max it out," she said. "I just use my debit card. A credit card is easy money that's not really yours. With debit, you know not to go over your limit because the money comes out immediately."
Senior business management major Daniel Millican has three credit cards. He said he thinks he's responsible with them, using them only for major purchases.