Better Credit Education Needed for College Students
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Better Credit Education Needed for College Students

August 12, 2011


Students who feel hampered by recent legislation designed to protect them from aggressive lenders are calling for more access to - and education about - credit cards.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (commonly called the Credit CARD Act) limited college students' access to credit cards in hopes of reducing the burden of credit card debt that saddled many college graduates.

And while the new law has been effective in preventing college students from getting credit cards before they're employed, it's also had the unanticipated consequence of seriously limiting young people's ability to begin building their credit histories. recently reported that this restriction has led college students to call for improved credit education rather than restricted access to credit. A rally for the cause is scheduled for August 28th in New York City. At the event, students reportedly plan to raise awareness about the need for credit education.

The group sponsoring the rally is called the Student Card Education Initiative, an online group that offers free personal finance information tailored to college students. The group argues that students need better credit and personal finance education because:

  • Credit reports matter. College grads may have their credit reports pulled by landlords, potential employers and credit card companies. Without access to credit in their undergrad lives, they may have trouble getting housing, jobs or credit.
  • Student debt is out of hand. The average college grad owes about $24,000 in student loans. That's debt that generally can't be discharged in bankruptcy.
  • Many schools have no personal finance curriculum. Americans of all ages commonly earn failing grades on tests of financial literacy, in part because few parents are sure what to tell their kids and few schools require financial literacy programs.

The rally's goals, it seems, are to promote proactive credit education that would help college students use credit cards responsibly in order to begin building a credit history that could help them in their lives after graduation.

If the movement takes hold, it may spur yet another change to credit card laws. Right now, the CARD Act prevents those under 21 from getting a credit card unless they can show proof of income or can get a cosigner who's 21 or older.

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