The New Credit Card protections outlined in the September, 2009 The Legal Report have now gone into effect (see our blog at www.Ajalatlaw.com).
In addition to the new regulations on existing credit card accounts (e.g., limitations on fees, interest rate increases, and payment processing), there are important limitations on minors and young adults looking to obtain credit cards.
The main protection is that banks are now prohibited from issuing credit cards to anyone under age 21 unless the applicant has an adult co-signer on the account or can show written proof that they have sufficient income to repay the debt. Similarly, written co-signer approval will be required for increases in credit lines on any existing account.
Limitations on marketing to young adults and college students are also imposed. "Pre-approval" offers made to anyone under 21 are now prohibited. In addition, banks must now stay at least 1,000 feet away from college campuses or college-sponsored events if they are offering "freebies" (pizzas, hats, tee-shirts, etc.) or other gifts to entice students or young adults to apply for credit cards.