Spring Break
'Credit Card Act' will have little effect on college students
Akela Yarn
Issue date: 5/27/09 Section: News
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President Obama signed the act into law Friday fulfilling his promise to make it a law by Memorial Day. The act will not take affect for nine months.
The White House released a statement detailing the effects the credit card industry has had on consumers and the economy. "Every year, Americans pay around $15 billion in penalty fees. Nearly 80 percent of American families have a credit card, and 44 percent of families carry a balance on their credit cards."
"Larger and out-of-state banks are what causes this to happen because of greed. If they treated customers like they should then legislation would not have happened," said Mimi Van Nortwick, vice president of marketing and operations for East Carolina Bank.
"Most credit card banks are based out of Delaware because they are so liberal (on their policies) about rates and fees," she said.
In an effort to protect consumers, rebuild the economy, and encourage personal responsibility the Credit CARD act of 2009 was drafted. The act will make it more difficult for credit card companies to raise interest rates. The bylaws of the act make clear what credit card companies can and cannot do to consumers with existing accounts and consumers who will get accounts in the future.
In his weekly address titled Credit Card Reform, the President pin-pointed four long-term issues that he wants the reform to do. "First, there have to be strong and reliable protections for consumers.
Second, all the forms and statements that credit card companies send out have to have plain language that is in plain sight.
Third, we have to make sure that people can shop for a credit card that meets their needs without fear of being taken advantage of. Finally, we need more accountability in the system, so that we can hold those responsible who do engage in deceptive practices that hurt families and consumers."
The White House statement is enforcing new protections for college students and young adults. One of these requirements is for "card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students."
For many students and young adults this will result in less mail solicitation and no more on-campus bribes to sign up for a credit card.
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