College students younger than 21 who want to sign up for a credit card might encounter obstacles starting Feb. 22.
Local banks and credit unions must change standards to comply with the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which along with adding regulations for college students, will also protect Americans from hidden fees and unfair rate increases.
The Ohio University Credit Union does sign students who are younger than 21 so they can establish credit early in their lives, said Laura Pratt, vice president of marketing at OU Credit Union.
Our philosophy is we want to give them a small credit line to get them started
but not something that will get them burdened with debt she said.
The credit union requires that students have $100 to sign a card. The new law requires that those younger than 21 must show that they have a steady source of income to pay back the card or a cosigner.
We do have quite a few members under 21 Pratt said. It's not going to hurt us. It's really going to make it difficult for the students because if they don't have a steady job
they're going to have to work closely with their parent/guardian.
The credit union meets with incoming freshmen in the financial room during Bobcat Student Orientation in the
summer, she said.
Each of the banks in the town that wants a presence at orientation has a table and we ask them to stand behind their table as students come up to them
said Jenny Klein, director of orientation of the financial room during Bobcat Orientation.
The university will be looking at this legislation more closely to see if we need to make any changes to our current practices
OU spokeswoman Katie Quaranta wrote in an e-mail.
The new law also prohibits credit card issuers from giving out free items within 1,000 feet of campus. OU Credit Union does not market on or near campus so the other regulations pertaining to college students will not affect them, Pratt said.
Chase Bank, which has three branches in Athens, also does not market on or near campuses and intends to follow the regulations of the CARD act, spokeswoman Gail Hurdis said in an e-mail.
Chase usually starts students on credit cards with a $500 to $700 spending limit and calls students who are late on payments, according to a news release from Chase.
Hocking Valley Bank serves both students and local residents who are younger than 21, said Sarah Ervin, the installment loan clerk for the bank, which has seven locations in the area.
Most of it's pretty cut and dry; it's not going to affect us that much
she said.
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Gail Burkhardt
