The Credit CARD Act of 2009 is now in effect, so if you’re living on a college campus you’ve probably noticed something missing.
You’re no longer seeing tables with credit card representatives trying to lure you into making application for their cards. You’re no longer being offered pizzas, t-shirts, and teddy bears in exchange for your signature on the dotted line.
That’s because the credit card companies are no longer allowed to use these enticements – and many economists see that as a good thing.
The era of easy credit for college students has led to an average credit card debt for college students of more than $3,000. That might not seem like much for an adult earning a good income, but for a college student who is not yet earning income, it’s a hefty sum.
Some financial experts believe that lack of access to credit will force college students to budget and make wise spending choices – a good way to enter adulthood by anyone’s estimation.
But still, life does sometimes present us with emergencies, and sometimes fast credit is the only way to deal with them. What do you do if your bank account is hovering near empty, you need to drive 20 miles to class each day, and the transmission on your clunker gives out?
Having a credit card in your pocket for emergencies is a secure feeling.
So how can you get a credit card if you’re a student, under 21 years old, and you missed the February deadline? The most obvious way is to gain employment that would qualify you for your own card. But if you’re dedicated to earning a degree, employment may be out of the question right now.
The next-best way is to get a parent or guardian to co-sign. This is a risky move for them, so handle it carefully. If you use the card wisely and make all the payments on time, their credit scores will be improved. But if you max-out the card or fail to make a payment, you’ll be hurting the person who helped you.
One safeguard for your benefactor is that you won’t be able to increase the credit limit without their permission. So if they agree to co-sign for a $1,000 credit limit, you can’t increase it to $5,000.
Once you turn 21 or gain employment that would enable you to meet the payments on a credit card, you should apply for a new one under your own name. Once you have it, close the joint account and release your family from the obligation.
Author: Mike Clover
CreditScoreQuick.com your resource for credit cards, credit reports, loans and Credit News.
