Students will be subject to specific regulations when the Credit CARD act goes into effect on February 22.

Getting a credit card is about to become a lot harder for those younger than age 21. New regulations intended to clean up the credit card industry include additional measures to protect young people. The so called Credit CARD Act will go into effect on Feb. 22.  The new law was championed by President Obama to protect consumers from unfair practices of the credit card industry.

The CARD act requires those younger than 21 to prove they earn enough money to pay off a credit card. Otherwise, a person age 21 or older must co-sign with them.

John Berlau, director of the Competitive Enterprise Institute said in a press release that those age restrictions are “discriminatory and paternalistic.” The American Bankers Association warned millions of students would have a difficult time building a positive credit history.

However the picture isn’t necessarily so grim. Young people who don’t know how to manage credit responsibly can do more harm to their credit ratings and financial future than someone who has no credit. Young people even know they don’t know enough about credit. A study from Sallie Mae found that over 80 percent of students wanted more financial education.

The average student carries over $4,000 on nearly five credit cards. At a time when student borrowing for everything from tuition to general living expenses is at an all time high, students could defiantly use help.

These new restrictions will keep credit card companies from “ripping off consumers with expensive fees and other unfair tactics,” according to Pamela Banks, policy counsel for Consumers Union.

The law also ends the giveaways such as t-shirts and pizza that credit card marketers frequently use on campuses to entice young people to register for a card. In fact, marketers will be banned from hawking their wares anywhere within a thousand feet of a campus. The law also bans sending unsolicited credit cards to people younger than 21.

The CARD act contains several more provisions designed to protect all consumers. Retroactive rate increases have been banned, along with requirements that excess payments be applied to the highest interest balances first. Consumers now have to opt-in to be allowed to go over balance, ending a practice that saw consumers unwittingly go over balance and encounter large fees.

It will also become easier for consumers to realize the financial impact credit is having on them. Bills will be required to use “plain language” according to a factsheet from the White House. Consumers will also be able to see how long it will take them to pay off their balance if they only pay the minimum interest rate.

Banks have already been preparing for these major changes, so consumers are unlikely to be hit with sudden changes come Feb. 22. However, love it or hate it, many students will be in for a surprise when they apply for a new credit card.

By: Joshua Davis

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