New law changes the landscape of teen credit

Many people eagerly await their 21st birthday; that first sip of legal liquor is a big event here in the states. Now, thanks to legislation passed early this year, students and youth alike will have to wait till that same day to get their own credit card.

Before the legislation was passed, credit card application tables on college campuses would be littered with cute little gifts like stuffed animals, t-shirts, and various knick-knacks intended to draw the younger students. Now, such "inducements" are prohibited.

Because of the new law, the Credit Card Accountability, Responsibility and Disclosure (or CARD) Act, either a cosigner or a provable source of income is necessary to be approved for a credit card. Such safeguards are designed to stop freshman, newly freed for their parents' care, from accumulating debt early on in their lives.

The point is not to simply make it harder for students to get credit cards; it's to make sure that those who do either have a way to pay them off or have a parent or other adult to bail them out if need be.

According to a study done by financial group Sallie Mae, 30 percent of college students paid for tuition with their credit card in 2009. In the same year, students charged an average of $2,200 on credit cards, up from the 2004 average of $942.

The law isn't in place in order to scare students away from credit or to add more hoops to jump through; the point is to ensure that the spending is being done responsibly.

Speaking of responsibly spending, it might be a good idea to celebrate a 21st birthday with only one of the newfound privileges; spending the day charging your new credit card on infomercials while sipping a bottle of Jack probably isn't the best idea.