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Student Credit CARD Loopholes on Campus

By Stephanie Rabiner, Esq. on June 09, 2011 | Last updated on March 21, 2019

One of the purposes of the Credit CARD Act of 2009, known to some as the student credit card law, was to protect college students from the perils of racking up large sums of credit card debt prior to graduation.

Turns out that, since the law came into effect in early 2010, it hasn't been doing such a great job at meeting its goals.

Taking advantage of loopholes and vague language, credit card companies are continuing to market to college students, leading them towards thousands of dollars in debt.

If you were ever on a college campus prior to 2010, you would have encountered credit card companies hawking their wares to young adults with the help of free gifts, like water bottles and pizza.

Believing that these marketing tactics were largely responsible for the rise in college credit card debt, Congress added the following provisions to the Credit CARD Act of 2009:

  • Those under 21 years of age need a co-signer or proof of sufficient income
  • No marketing of credit cards on college campuses
  • No marketing credit cards to students with the help of tangible freebies

According to what Jim Hawkins, a law professor, told The Wall Street Journal, credit card companies are skirting these rules, and have continued marketing directly to college students.

For one, what is sufficient income? Nothing prevents students from using loan income to bypass this provision, reports the Journal.

And no tangible freebies? A $50 statement credit for new customers is way more attractive than a free t-shirt.

And as for tabling on campus, nothing stops companies from setting up near campus, where student traffic is high.

Looks like the Credit CARD Act is a bit of a failure and Congress needs to tighten up the student credit card law.

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