Many view the Credit CARD Act provisions that prohibit those under 21 from getting cards if they don't have an income or a parent to co-sign as the kind of law they wish they'd had. But that depends upon the idea that college students are only digging big holes for themselves during those four years, and the years immediately following, without a good reason.
We imagine college students are only using credit cards to make excessive, irresponsible purchases. But not everyone is going into debt to buy TVs, clothes, or trips to Cancun. Some may use them to buy books and plane tickets home. Youth Radio's Asha Richardson reminds me that many students might face a real need for a credit card. The new rules can certainly save college students from unwise financial choices. But Richardson asks:
As a first year college student I think it’s a great idea, except what about students whose parents don’t have good credit? Will they have to wait until they are older and will their parents credit history reflect upon them?
That's not a question many are asking. Expanding credit in a responsible way to students whose parents can't help pay for their college educations can help them build credit histories and close the gap somewhat between them and their higher-income peers. Without a credit history on leaving college, many students will struggle to get an apartment or even a job. The other alternative would be to make credit ratings less important, which is an idea I can totally get behind.
As Richardson notes, the issue of reforming credit cards on college campuses ignores the issue of students who are struggling to afford to be there. (Of course, President Obama has other proposals to help address that.) As Richardson says, "So I'm worried. This could be a Band-Aid fix to a superglue problem."
-- Monica Potts