Legislation was passed just last week, and the credit card market is going to change as we know it. Are they going to be big changes? Most of them are minor, but it’s a regulation that is going to help the people more than the credit card companies.
In this bill, there were some rules when it came to student credit cards, and how they can be distributed. I wanted to point out a few of these new rules, and how they match up to today’s standards. When looking for a credit card today, you may find that the process is a little harder, but it’s always good to know what’s going on in the credit card world.
Credit limit can’t exceed $500 or 20% of income
College students are notorious for racking up debt into the thousands, and the only reason they are able to do this is because of their credit cards. On average, the typical student carries more than 9 cards! This new rule will make it so that you can’t give a student more than a credit line of $500, or 20% of their income, whichever one is higher. If you make $10,000 next year at your job, you will be able to get a $2,000 credit limit. Today, you’re able to practically reach the sky when it comes to applying.
Marketing is going to be limited on campuses
The new law wants to make sure that credit card companies show you what kind of relationship they have with your college. Many colleges have agreements with the credit card companies on how they can market on their campus. Some ban it, while others allow it. The ones that do, are the ones that get a kickback from the companies themselves. This way, when you sign up for a card, you’ll know exactly what the card companies are all about.
No more freebies
If you went to college, or you’re going now, you probably remember all of those freebies you used to get. Sign up for a hat, and get a credit card. The new rule will ban this type of marketing to influence students to sign up. Instead, they can stick to traditional marketing where they can tell you exactly what you’re signing up for. The bad thing about freebies was that you weren’t able to really look at the application, since your whole objective was to get the free item.
Besides the student credit aspect when it came down to the Credit Card Act, credit card companies now have to give you a 21 day notice when they send out statements, 45 day notice when terms are going to be altered, and banks have to wait 60 days before they can raise the rate on the cards. You can read more information about this bill at WhiteHouse.gov.