Credit Report Articles

CARD Act Aims To Protect Young Adults' Credit

Federal credit card reforms protect students under 21 from certain marketing tactics.

People of all ages have a strong interest in protecting their credit score, but this can be especially important for young consumers given the effect that bad credit can have on their job prospects and ability to make major purchases.

Members of Congress took this into account when they passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act last year. Among the provisions in the bill are requirements that people under age 21 must have a co-signer or be able to demonstrate their ability to pay back a debt.

The federal law will also ban unsolicited credit card offers to people under 21, while also strongly limiting the ability of card companies to engage in marketing activities - like giving away free gifts in exchange for applying for cards - near college campuses.

Renee McGruder of Money Management International noted that many college students "would be excited about free merchandise and not have a clue about the long-term implications of applying for and using credit."

With that in mind, the organization advises young people to take lessons or classes in personal finances, and to take advantage of their ability to get a free copy of their credit report each year. After all, mistakes like late payments can damage one's credit score for as long as seven years.