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As college students, a lot of people are paying bills for the first time. When planning for the future, the idea of obtaining credit can be hard to understand. Some might have only heard of credit via the catchy FreeCreditReport.com jingles.
Paying rent, bills and credit cards are some of the ways in which college students can establish credit. Now, with the Credit Card Accountability, Responsibility, and Disclosure Act, which became effective on Feb. 22, credit card regulations and restrictions will affect college students’ finances.
Establishing credit is hard to do at the age of the average college student. Now, the regulations are making it a requirement to have a co-signer or demonstrate the ability to pay. If students’ parents co-sign and they end up keeping the credit card for 20 years, the co-signer will continue to be liable for the amount of time the card is kept.
College students are struggling to make it through school in order to become more competitive in the already challenging job market. Even if new graduates find jobs, the lack of individual credit could hinder their abilities to obtain loans for cars or homes.
Young adults should be able to start managing their finances without the help of their parents. Without experience, how are they ever supposed to learn? Hopefully there will be government action in the future that will help college students actually have the ability to establish their own, un-cosigned, credit.
