Credit card restrictions could bind students, Act in effect today; some dispute widespread impact

Credit cards may soon be harder to come by for many Central Michigan University students.

The Credit Card Accountability, Responsibility and Disclosure Act, signed by President Barack Obama in May 2009, goes into effect today. The act requires a cosigner to open a credit card for anyone under the age of 21, a measure aimed at preventing high college graduate debt.

“There are definitely some people who are not responsible enough to keep track of it,” said Sean Riley, a Suttons Bay freshmen. “It would keep a lot of people of trouble.”

Riley does not have a credit card and said his parents probably would not cosign to help him get one. They warned him about the problems of credit cards, but he has a debit card and said he likes that he cannot spend more than he has.

His roommate, Illinois freshman David Orr, had a credit card, but never applied for a new one after his old numbers were stolen.

“If I don’t have the money, there’s no point in spending it,” he said. “A lot of younger people don’t know the responsibility of having it and paying it back.”

On the other hand

One of the downfalls of the bill may be that there is no room for exceptions.

Abigail Hollingsworth, a Lexington sophomore, said she thinks the situations should be evaluated on a case-by-case basis.

“An exception should probably be made for people who are living independently of their parents,” Hollingsworth said.

Patricia Kallas, a Clinton Township freshman, has a credit card to improve her credit score. Her parents cosigned on her card about a year ago.

She feels the precautions outlined in the bill are unnecessary.

“It’s like they think we cannot be trusted, but it’s not like grown-ups can be trusted,” she said, referring to those in the working world. “They have tons of debt. It’s not like we’re any different.”

Other components of the bill are plain-sight and plain-language disclosures. They will require the credit card company to state how long it takes to finish the bill if a consumer pays only the minimum balance and how much would have to be paid each month to pay off the entire balance in 36 months.

Greg Roy sees that as a potential problem. Still, the Ada freshman does not think the new restrictions will change things much.

He has a credit card he cosigned with his parents two years ago.

“I don’t that it’s necessary because some kids are irresponsible, but most kids have to pay the bill off themselves, so they know their limits,” he said. “Just be responsible and know that you have to pay at the end of the month. It’s not free money.”