In the Sunday Oregonian the article Credit Cards: Know your rights, know your rates (http://blog.oregonlive.com/finance/2010/02/credit_cards_know_your_rights.html)
highlighted some of the laws going into effect with the new Credit CARD Act which goes into effect this month. While I do agree with many of the parts of the new law, I also feel that much of this would be unnecessary if we only properly educated our youth on how to manage their finances. I really am against predatory lending practices, but also feel that consumers need to bear responsibility for their actions.

Here are a couple parts of the new law that I question:

Co-signer required under age 21. Those under the age of 21 will be required to have a co-signer unless they can provide proof of a job.

Shouldn’t this be the case for everyone? If someone cannot provide proof of income then how are they going to be able to pay the monthly bill? The credit card companies are taking a big risk offering financing to individuals that cannot provide proof of income. Thinking about it, those under 21 are probably more likely to pay the bill without an income stream because many are still relying on Mom and Dad to pay their bills. Still, a 50 year old with no income, per the legislation, can still go and get a credit card.

Marketing on college campuses. Credit card companies are no longer allowed to market on college campuses and are not allowed within 1,000 feet of an event linked to a higher education institution.

So here is where I may get the gasps…I don’t agree with this. Only half of the population gets even some college education and we’re saying they’re not qualified to decide if they should get a credit card? If we don’t think our top educated can handle it then what about the rest of the population. Colleges actually make money on allowing credit card companies to market to college students so we are taking an income stream from colleges during a time they really need the funds. How do you think the colleges will make up for the lost income? Plus students will miss out on the free gear they get from applying for the credit card. Okay, that one was a joke.

What should we do?
It seems to me we trying to protect young adults from their own poor decisions and likely just delaying the poor decisions. We really need to address the root of the problem which is a lack of financial literacy.