Can Obama Keep Young People Out of Debt
Credit card companies have always targeted college students. Back in the 1960′s, when it was still legal to do so, they simply issued a new card in a students name and mailed it to them on campus.
That practice was banned when Congress began regulating the credit card industry, but they’re still aggressively pursuing those new customers, and the result is that today’s average undergraduate student now carries over $3,000 in credit card debt. This is the highest it’s been since researchers started tracking data in 1998.
The colleges and universities benefit from this aggression, because credit card companies rent space on campuses to set up their tables. There they offer everything from cash to coupons for pizza’s and CD’s in order to entice students into filling out application forms on the spot.
Unfortunately, that means the students don’t take the time to study the fine print on their offers. Most, if not all of these cards come with annual fees, conveniently charged to the new card. So the student is in debt before they use it to make their first purchase. They may offer low introductory rates, but once the introductory period is over, the rates are on the high end of what’s available today.
This much debt is not only a burden to carry as these students begin their new careers, it makes it harder for them to purchase a car, rent an apartment, or even get a job. Because credit scores are partially determined by debt load and the length of time that a consumer has shown responsible repayment of debt, they are also burdened with low credit scores.
President Obama wants to change all this, and is pushing Congress to enact legislation that will make it harder for card issuers to extend credit to anyone under the age of 21. Congress is already considering regulations that will end many of the deceptive practices now employed by credit card companies.
This is in addition to new regulations already passed by Federal Regulators and set to become effective in July 2010.
If your college student does need a credit card, the best course of action is to study the offers carefully before making application. Compare annual fees, interest rates, and rewards, then choose the best card. Warn your students not to respond to offers in the mail or friendly sales people stationed at tables across their campuses. Be mindful of your credit scores as they will have a tremendous impact on lifes financial decisions.
http://www.creditscorecowboy.com is the #1 source on the planet for a free credit report, identity theft software and a blog with a wealth of information writtten by lending professionals that know about credit and what determines ones creditworthiness. Article Source:http://www.articlesbase.com/finance-articles/can-obama-keep-young-people-out-of-debt-966989.html
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