• Can’t Drink No Credit Card

    Can’t Drink No Credit Card

    August 27, 2009

    The major changes happened to the credit card industry not to long ago and they take effect the beginning of next year.  That is right if you can’t drink you can’t get a credit card.  Well it is not a 100% true but it is close.  You will just have to ask Mom to buy the beer with her card.

    The new credit card laws state that individual under the age of 21 cannot get a credit card without a cosigner or if they can prove they have sufficient income to support having a credit card.  Also, the credit limit on any given credit line can be no larger than $500.  And the total amount of credit available via credit cards cannot exceed 30% of the individual annual income.  Furthermore, credit card companies are no longer allowed to promote on campus.

    Why the changes to credit cards?

    The answer college students were leaving college with debt and most times this was in excess of $2,000.  This is not a way to enter the real world.  Furthermore, credit card companies were explicitly targeting campus to get new card holders.  Since your first credit card is the one you usually hold onto for the longest period of time, college students are the perfect target.  Also, signups were easy.  It many times took the offering of a tee shirt to get someone to sign up for a credit card.

    The truth is that many of these individuals were not ready to manage a credit card.  They need a couple years on thier own before they could realize what it takes to manage credit.

    Why the cosigner?

    The answer is pretty simple. Since the co signer is more than likely Mom or Dad, there is more accountability to the debt. Even the idea of asking Mom or Dad to co sign for a credit card could be difficult. Parents already know the possible credit pitfalls and won’t want thier children to fall into them. Also, the co signer is responsible for the debt if the card holder does not pay it off. So there is a financial interest by the parents to ensure the credit card is effectively managed.

    The idea of using credit card is not a terrible one for individuals under 21. This a world based in credit and these low limits will let individuals learn while not falling into a huge amount of debt.

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User Comments

  1. Soon it can be like:
    Can’t eat, can’t drink, can’t breath, can’t think – without a credit card….

    October 25, 2009 Comment by Brno@
  2. that interesting. that explains why I had problems with getting a credit card before 21.

    November 1, 2009 Comment by gopal@
  3. most of college students don’t understand how to spend their money wisely.
    using credit card i think few years later we cannot feel any paper dollar anymore.
    .-= tommy´s last blog ..Quick Repair For Leaking Pipes =-.

    December 27, 2009 Comment by tommy@
  4. I sorta agree with the ordeal, credit cards can get young teens into a lot of trouble really quick if they arent ready, maybe we should get them more knowledgeable on how to handle CC’s

    April 5, 2010 Comment by FL Studio@
  5. Well, I hate to be the one to sound to conservative but I agree with that completely. I don’t think the drinking age should be lowered and, I think with the amount of outside influence and advertising that is out there that it is better to limit the decisions made by younger individuals when it can effect the rest of there life. I am only 24 and I wish I would have had a few more years before I could have went out and got 6 credit cards just because I had a clear credit report!

    April 10, 2010 Comment by Microsoft Points@
  6. Great article. There are so many things that we have to look out for nowadays with credit cards. I’m STILL paying off my debt on the last remaining credit card more than five years later…

    April 22, 2010 Comment by Home Lighting Fixtures@
  7. Since the co signer is more than likely Mom or Dad, there is more accountability to the debt.

    May 12, 2010 Comment by laser pointer@
  8. credit cards are used to make your purchases. I think every stores and any business establishments provides choices either in cash or through credit cards.

    May 25, 2010 Comment by average insurance@
  9. People should learn how to control their spending. Obviously not all people learn that at a young age. Students being teens or even slightly older might not have the expertise to deal with that kind of power

    July 7, 2010 Comment by singapore blog@
  10. Well i agree with this.
    Too many students have alot of debts that exceed above 2k$.
    In the netherlands you need to have proof of income before you can even apply for a credit card .Banks need to know for sure if you can pay the monthly debts you make. Yes i see a purchase with a creditcard as a debt.

    July 26, 2010 Comment by Auto insurance plans@
  11. It is better to limit the decisions made by younger individuals when it can effect the rest of there life.I don’t think the drinking age should be lowered and, I think with the amount of outside influence and advertising that is out there that.

    August 1, 2010 Comment by Merry@
  12. i think few years later we cannot feel any paper dollar anymore.Obviously not all people learn that at a young age.

    August 12, 2010 Comment by vansci123@
  13. Mature young individuals can often handle adult responsibilities. However, it is the duty of parents to teach them how to manage their money efficiently.

    August 19, 2010 Comment by Rachel Dickman@
  14. :) but I don’t think the drinking age should be lowered

    October 17, 2010 Comment by avon katalo?u@
  15. Great information, and your writing is very interesting too. Thank you very much for posting this.

    October 25, 2010 Comment by wowG@
  16. I think is kind of funny that that you can vote in USA at the age of 18, that’s what I’ve read anyway. Vote is the illusion to be able to choose who will run the country, kind of an important thing right. You can drive a car when 16, younger than inmost other countries.

    But you are not allowed to drink under the age of 21. So I take this as you are ready to bring effect on other peoples life in the traffic and politic ways but you are not yet ready to take care of yourself!

    What part have I missed, because it just don’t make sense!

    November 3, 2010 Comment by Second Hand@
  17. I think that is great for both the parents and the young people.
    If u couldn’t afford it,u couldn’t have it.The parents can control the risk of debt.

    December 30, 2010 Comment by lktown@

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