Back to School: Resist Credit Card Temptation

Whether they’ve had incomes or not, credit card companies have typically lured in college students, aiming to make them customers for life.

The Scene

At one time, “financial institutions were flinging large balance possibilities at students,” says Credit.com Chairman and credit expert Adam Levin.

And that’s where the temptation starts. Students use credit cards for shopping, eating, drinking, paying for school-related expenses and even their school tuition. And when they’re charged late or over-limit fees, it’s no skin off the credit card company’s back. It works to their benefit, as long as they get paid.

From now until February, when new laws setting limits on credit card companies start going into effect, it’s very likely that students will be barraged with credit card offers, says Levin.

How Credit Will Change

“Universities are going to be a little more cautious about who they allow to flutter around the campus,” Levin says.

That’s because, when new credit card rules come into effect next year, the marketing of credit cards to people under the age of 21 will be restricted. And if a student can’t give proof that they can pay off a credit card, they won’t be able to get one.

In these cases, a parent would have to co-sign to ensure to creditors that if a child couldn’t pay off their balance, their parent would. In addition, credit limits could not be raised unless a parent is notified.