New credit rules aim to help young adults, college students

NEW YORK (9/2/09)--Young adults stand to be the group most affected by the Credit Card Accountability and Disclosure (CARD) Act of 2009, and it's worth the effort to fully understand the changes (forbes.com Aug. 4).

Although the majority of the CARD Act won't go into effect until Feb. 22, 2010, five sections of the Act are dedicated to the protection of young adults:

• Credit usage. Anyone younger than age 21 must be an authorized user on the parent's account, or show proof indicating an independent means of repaying card debts, or have an adult co-signer.

• Special offers. Creditors may not send prescreened offers to consumers younger than age 21.

• Free gifts. Card companies may not offer free gifts for the completion of an application on or near a college campus and at college-sponsored activities or events.

• Privacy protection. Colleges, universities and alumni associations must disclose details of contracts they sign that allow credit card marketers access to student and alumni contact info.

• Full disclosure. Card issuers must file annual reports with the Federal Reserve Board listing all business, marketing and promotional deals with schools. These reports must detail the terms and conditions, list schools by name, and identify how much the issuer is paying the school.

• Education sessions. A "sense of Congress" provision--not treated as law, but rather a suggestion from lawmakers--recommends that colleges offer credit card and debt education sessions during new-student orientation.

Some provisions became effective Aug. 20. Creditors now must deliver bills 21 days in advance of the due date and provide 45 days notice when changes are made to consumers' credit card agreements (chicagotribune.com Aug. 20).

For more information, read "CARD Act Kicks In, What Will Happen?" in Money Mix: Launch Your Life.

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