College Students Still Face Crippling Credit Card Rates

HS gradCredit card lenders around the country are beginning to salivate as college students head to campus — though not as enthusiastically as they once did. Young adults used to be a powerful debt-generating machine, and banks took full advantage. Then the CARD Act of 2009 made many of the old practices that lenders used to lure and keep college students in debt illegal. However, even with those changes, college student credit cards carry some of the highest annual percentage rates in the country, rivaling those of store credit cards.

The CARD Act Didn’t Eliminate the Problem

Pre-CARD Act, college students could simply sign up for a card at age 18. Now, individuals younger than 21 cannot be offered pre-approved credit cards. They must have proof of income or a co-signer older than 21. But these restrictions don’t make it hard for the average college kid to obtain plastic.

Post-CARD Act, credit card companies were largely banned from their old tricks of handing out free T-shirts, pens, tote bags or Frisbees to entice naive students. Instead of offering tangible goods, lenders moved to using rewards to lure college students to spend, spend, spend their way into owing money at cripplingly high annual percentage rates.

Analyzing the APR of Student-Targeted Credits Cards

Read the rest on DailyFinance

Posted in Credit Cards, DailyFinance Tagged with: ,
9 comments on “College Students Still Face Crippling Credit Card Rates
  1. Alexis says:

    I received my first credit card at 18 and it was a big deal for me but I also wish I never got it because I ended up spending too much money. We learn from our mistakes though. =)

  2. Hannah says:

    Thanks for posting!

  3. I forgot how much student credit card rate charged and it’s ridiculously high. Normally I have a pretty good habit of paying it off monthly. I rather not give any of the credit card company any extra money. I think I only had a balance on my cc debt like 2 – 3 times that I didn’t pay every month.

  4. Thank God there is an act to protect college students who are prone to deception. Those college students need no credit card.
    Jayson @ Monster Piggy Bank recently posted…Investigating Peer to Peer Loans for Borrowers and InvestorsMy Profile

  5. I am so glad the CARD act was passed to help young, naive college students avoid debt. I know they still have access to credit cards and will likely still have debt (especially student debt), but at least some of the things that made credit even more enticing and easy to obtain were banned.
    Kayla @ Red Debted Stepchild recently posted…This Week Was AwesomeMy Profile

  6. Simon says:

    The law being in place is a good thing. However, it’s upon each individual student to think carefully before they sign up for a credit card. They should weigh the options carefully and maybe, even keep off from the cards altogether!
    Simon recently posted…Wyndham Rewards Visa Signature Card ReviewMy Profile

  7. Myles Money says:

    I think one of the big issues with credit cards is not only how seductive credit is, but that we are not taught about the dangers of increasing debt: the banks encourage you to pay the minimum of course, and many people don’t see the trap till it’s too late. Credit cards take the “hard work” out of the decision to buy, and instant gratification makes everything far more appealing.
    Myles Money recently posted…Yakezie!My Profile

  8. I received my first credit card too at 19 and I can’t remember what I bought with it but I remember the frisbee I received for that first credit card.
    Jason @ Phroogal recently posted…How to Give Financial Advice to FriendsMy Profile

  9. My parents taught me that paying off a credit card every month was mandatory. Since many parents struggle with their own personal finances, it would be nice if high schools offered (or maybe required) a basic course on how to keep a budget, how to stay out of debt, and basic investing principles.
    Deb @ Saving the Crumbs recently posted…How to Never Pay Full Price for Anything (Almost): BigCrumbsMy Profile

Leave a Reply

Your email address will not be published. Required fields are marked *

*

CommentLuv badge