The Credit Card Accountability Responsibility and Disclosure Act of 2009 will take effect Feb. 22, instituting a series of regulations to protect consumers younger than 21 years of age from excessive debt.

According to a 2009 study conducted by Sallie Mae, 84 percent of college students have at least one credit card; the average student has 4.6 cards. Students with at least one card carry an average of $3,173 in debt.

But the CARD Act limits both credit card companies and the young consumers they target. Credit issuers will no longer be permitted to use free merchandise to market their cards at college-sponsored events or within 1,000 feet of college campuses.

Moreover, certain provisions of the act prevent students from obtaining cards unless they co-sign with an adult or prove they have adequate income to pay off monthly balances. A maximum credit line of $500 or 20 percent of the annual income will be offered to adults younger than 21 years of age who do not meet these requirements.

Yvonne Hubbard, the University’s director of Student Financial Services, expressed support for the CARD Act.

“The act considers the poor practices that credit card companies use to entice students without allowing the students to realize the full consequences of having a card,” she said.
Hubbard added that AccessUVa, the University’s financial aid program, helps students to manage credit.

“AccessUVa’s focus has been to teach students to be in control of [their credit rating] because it is going to affect the rest of their lives­ ­— for instance, whether or not they can get a job,” she said.
First-year College student Fatima Haque agreed that the regulations have merit.

“There are exceptions, but the majority of 18 to 21-year-olds are not capable of managing their finances,” Haque said. “It’s good that students have the opportunity to manage a smaller amount [of credit].”

Some University students, however, feel that these new limitations are unnecessary.

“People, young and old, have overextended their credit in this tough economy,” fourth-year Architecture student Zach Carter said. “[Accruing debt] is a tough way to learn a lesson, but as a college student, you have a lot of other important decisions to make; you should be capable of handling your finances, too.”

Hubbard agreed that students should learn to make these decisions, but added that they should have controlled opportunities to learn how to manage their credit.

“College is about learning how to learn,” she said. “The same thing should apply to credit cards and credit scores. This act gives students the opportunity to learn with someone watching over them.”