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New Credit Card Law Will Help Young People

Posted by: RateAPY Bank Rates News
March 4th, 2010

Credit card companies are known for actively seeking new customers on college campuses. Young people who are away from home for the first time have fallen victim to easy credit and found themselves thousands of dollars in debt with no ability to repay, thus ruining their credit histories for seven years.

The Federal Reserve has tightened regulations on banks that offer credit cards in an attempt to strengthen consumer protections. The goal of the Credit Card Reform Act is to avoid another economic crisis in which banks have over extended credit and consumers are buried in default.

Credit Card Reform Act Protects Young Borrowers

New credit card regulations will protect young people age 21 and under. First, they will have to prove their ability to repay anything they borrow in order to be approved for a new credit card. Second, if they don’t have the ability to repay, they can have a co-signer such as a parent, which will still allow them to develop a credit history.