Under 21? - Getting a Credit Card Just Got Tougher

Last year, the US Congress passed a law that makes it a lot tougher to get a credit card if you are under 21. How tough is it? Starting February 22, 2010, several things will change:

• You will need income, assets, or a cosigner: You will have to show proof that you have the means to pay your credit card bill, such as income from a job or other assets. If not, you will need to have an adult cosigner on your credit card. That cosigner will be fully responsible for paying the bills of the card holder, so unless that person really loves you or trusts you, don't count on them being a cosigner.
  
  
• No more offers in the mail: Credit card companies will no longer be allowed to send prescreened credit card offers in the mail to anyone under 21.
  
  
• Fewer college giveaways: Companies marketing credit cards to college students can't give away free stuff on or near the college, or at college-sponsored events.

How bad is this for students and younger people? Mortgage311.org thinks it is a good thing for most younger people. Those that do have the income or the assets won't be affected, and those that don't should either be motivated to have an income or to create financial assets, or to manage life without credit cards.

Having a cosigner, typically a parent, for a young person should not be an issue if that young person is both financially responsible and has a parent who can provide financial support as well as guidance for the responsible use of credit.

The biggest losers are the credit card companies who will have much less of an opportunity to convince financially inexperienced young people with no money or job that having and using credit is a good thing.