MBA students as well as all others may have already known about the new credit card act that went into effect 22 February, 2010. The new Credit Card Accountability, Responsibility, and Disclosure Act were signed by the President of the United States in May of 2009. It goes into effect on February 22, 2010. So let’s have a closer look at this topic.

Is it tougher to get a student credit card now?

Yes. Now it will be harder to get credit cards. Especially if you are below 21 than the credit card means a lot to you. It will be harder to get a credit card if you have no proof of income or co-signor with good credit. Earlier you could go to class on the first day and return home with new shiny credit card and a new Frisbee. Forget about it now.

The new law credit card is no good for you if you are an entrepreneur. As it can be difficult for a young to prove his/her income/earning potential. In addition as an entrepreneur, there is a good chance that you want to build your credit in the future (mortgage, car, or even rent). Until you hit the age of 21 you are either need a co-signor or any way to prove you have money income. If your parents have bad credit they will not be able to co-sign for you. If you have problems with proving you have a steady income and your parents have less than stellar credit, you will have to wait until you are 21 as binge drinking and hold a credit card.

Consequences of the credit card act for parents.

So let’s say your child is trying out his/her new credit card and debt accumulates. Not your problem? Well, not anymore. You are a co-signer now! If your child does not make their monthly payments, defaults, and comes into the risk of completely destroying their credit, you can help. I know that sucks, but financial education is now becoming even more important. On the bright side, you now have more control of your kids financial situation. You will not be surprised to find out that your (18-21 years old) came home from school with 3 different credit cards.

This entry was posted on Friday, February 26th, 2010 at 12:13 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.