2008 Woodie Awards
Lawmakers seek to rein in credit card firms targeting students
David Goldstein
Issue date: 8/12/08 Section: News
"Restricting access to this form of credit would result in great financial hardship for most card-holding college students and their families," he said.
However, that's just what two Missouri Democrats - Rep. Emanuel Cleaver and Sen. Claire McCaskill - hope to do. They have each worked in their respective chambers on legislation to tighten the rules.
Under their measures, students without jobs or the written approval of parents or guardians would have to be at least 21 before they could qualify for credit cards.
"You cannot sign up students who have no source of income," Cleaver said. "If you do, parents or some co-signer would have to guarantee that bill would be paid."
According to a recent report from Student Monitor, a national syndicated market-research survey, 41 percent of college students have credit cards. Of them, 65 percent pay their entire bills every month. The average balance for those who don't is $452.
Nick Bennett, a 19-year-old sophomore at Missouri State University, said he owed about $800 on his credit card. He's slowly paying it off by working at a sporting goods store this summer.
Even with the debt, Bennett said the card was a lifesaver.
"I wouldn't be able to pay frat dues or pay for books," he said.
But if students such as Bennett aren't that concerned, some people on Capitol Hill are, especially with the turmoil in the lending industry.
"No one should get a credit card that has not demonstrated creditworthiness," McCaskill said. "The reason these kids are all getting the credit cards is because the credit card companies know that if the kids get into trouble, their parents, in all likelihood, will bail them out."
However, that's just what two Missouri Democrats - Rep. Emanuel Cleaver and Sen. Claire McCaskill - hope to do. They have each worked in their respective chambers on legislation to tighten the rules.
Under their measures, students without jobs or the written approval of parents or guardians would have to be at least 21 before they could qualify for credit cards.
"You cannot sign up students who have no source of income," Cleaver said. "If you do, parents or some co-signer would have to guarantee that bill would be paid."
According to a recent report from Student Monitor, a national syndicated market-research survey, 41 percent of college students have credit cards. Of them, 65 percent pay their entire bills every month. The average balance for those who don't is $452.
Nick Bennett, a 19-year-old sophomore at Missouri State University, said he owed about $800 on his credit card. He's slowly paying it off by working at a sporting goods store this summer.
Even with the debt, Bennett said the card was a lifesaver.
"I wouldn't be able to pay frat dues or pay for books," he said.
But if students such as Bennett aren't that concerned, some people on Capitol Hill are, especially with the turmoil in the lending industry.
"No one should get a credit card that has not demonstrated creditworthiness," McCaskill said. "The reason these kids are all getting the credit cards is because the credit card companies know that if the kids get into trouble, their parents, in all likelihood, will bail them out."
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