Under 21? Tighter credit card regulations coming your way

By Philippe Djegal - email
Posted by Ellen Krafve - email

TYLER, TX (KLTV) - All that's left is the President's signature. This week, Congress passed the Credit Card Holder's Bill of Rights. Among the bill's features is a new regulation that would require co-signers for some credit card holders under 21.

"I kind of took on more than I could have handled," said UT Tyler senior Kris Boyd.

He agrees with the tighter regulations for young credit card holders, and with good reason. Kris has more than $4,000 in credit card debt that he's already worried about paying off after graduation.

"It'll give students time to think before they try to get a credit card," said Boyd.

Under the bill, Americans under 21 will now need a co-signer to assume equal responsibility for payment.

"I think that there are some student who are mature enough to handle credit card debt," said Dr. Harold Doty, Ph.D. "I think that there are other students who aren't that mature yet."

Dean of the College of Business and Technology, Doty said this bill will also protect young Americans from aggressive credit card companies.

"One of the problems is that many of those offers have nice teaser rates," said Doty. "But, in fairly short order they go north of a 20 percent interest rate, and that's probably higher than it should be."

However, Linda Tufts is not warming up to the idea of co-signing. Her granddaughter pays her bills with credit, and Tufts says that responsibility should be her granddaughters alone.

"They need to be able to have their own credit, and not jeopardize their parents credit by being co-signers," said Tufts.

But pretty soon, the bottom line for some teens is... "no co-signer, no card."

Credit experts say once President Obama signs the bill into law, it could take effect before January 1st 2010. One thing there is to point out is that working college students without a co-signer will still be able to obtain credit cards. But, that credit will be limited from $500 to 20 percent of the student's annual gross income.

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