Students under the age of 21 who hope to soon be paying with plastic may have to wait a little longer.
Congress signed the Credit Card Accountability and Disclosure Act of 2009 into law, which will go into effect February 2010.
H.R. 627-15, section (B)(i-ii) of the bill states that "an application to open a credit card by a consumer who has not attained the age of 21 ... shall require signature of a cosigner ... or submission by the consumer of financial information ... indicating an independent means of repaying."
In a nutshell, people under 21 who want to apply for a credit card cannot own a credit card in their own name.
They must either have their parent or spouse over the age of 21 co-sign, or the person must prove that he or she has sufficient income to repay the debt.
The law states that the new, more stringent measures are meant to protect potential card applicants.
The section pertaining to applicants under 21 is titled "Protection of Young Consumers."
"I think the current economic situation has reminded everyone money doesn't grow on trees," said Gov. Bob Riley's press secretary Todd Stacy.
One other notable clause in the bill (H.R. 627-6, section (B)(k)(1)) states that customers must "opt in" for an over-the-limit fee.
This means that when a customer reaches his or her credit limit, the card will be declined unless the customer opts to pay a fee for overages.
Only recently have credit card companies allowed customers to charge over their credit limit rather than decline the card, but customers often are slapped with fines.
One of the major goals of the bill is to cut down on these fines.
Banks have issued optimistic statements regarding the new legislation.
"We support the efforts of Congress to protect consumers and can appreciate the rationale for the mandated changes," said Jamie Grady, a representative for Wells Fargo.
Mike Rogers is Alabama's District 3 Representative to Congress.
According to a statement on his Web site he said, "The bill should help level the playing field between credit card companies and consumers, and mandates that credit card companies provide consumers at least 45 days of written notice before any rate increases in clear English."
Jenny Zuniga, a 20-year-old senior Spanish major, said she has had two credit cards since middle school.
"It was used for gas, but now I use it for expensive emergency things," Zuniga said. "It seems (the bill) is trying to help younger people stay out of debt. I think it is a good thing."
Other ways the bill seeks to protect consumers are:
-A mandated 45-day notice before credit card companies can increase interest rates
-A requirement for lenders to post their credit card agreements on the internet
-A requirement for customers to be able to pay their bill online or by phone without any extra fees.
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