New Credit Card Laws
Affect Students
Mengjie Zhang and Tiffany Roche, Staff and Contributing Writers
New provisions of the Cred
it Card Accountability, Responsibil
ity, and Disclosure (CARD) Act, a
federal law signed into law by Presi
dent Obama on May 22, 2009, have
the potential to alter the spending
habits of thousands of students
across the country. Credit card is
suers around the country notified
their customers in January and
Februaiy changes to their credit
card agreements due to the CARD
Act, which took effect February 22,
2010. The interest rates and fees on
current accounts are not affected,
but other modifications to card-
member agreements include;
Payments greater than the.
minimum amount due will be ap- ~
plied to higher interest rate bal
ances first. This helps you pay dovm
your debt faster.
Customers must be notified
about interest rate changes at least
45 days in advance and card issuers
cannot raise interest rates on exist
ing account balances.
No more overlimit fees. Cus
tomers have to give permission
before authorizing any transactions
that may place the account over the
limit,
Subprime cards, low-limit,
high-interest rate cards, will no
longer be allowed to charge exces
sive fees.
All commu
nications from
the card issuer
have to be in plain
language.
No more
late-fee traps such
as weekend due
dates and chang
ing due dates.
Grace periods (the
period after
purchases but
before finance
changes are
applied to the ac
count) must be 21
calendar days.
College
students were
targeted in some
of the provi
sions. Consumers
under twenty-one can no longer
acquire a credit card without a
co-signer and credit card issuer
promotion efforts are limited on
college campuses. These provi
sions are designed to prevent
students from accumulating debt,
but many students use credit cards
to finance their educations—an
expense that is difficult to avoid.
According to a study conducted
in 2009 by Sallie Mae Corp., the
largest student loan lender in the
U.S., nearly 30% of students use
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credit cards to pay tuition and 92%
charge other education expenses.
Sarah Hauth, a Meredith College
junior, believes that the CARD Act
might keep some students from
going into debt but may hurt oth- •
ers who have no other way to pay.
“What about the students who need
credit cards to pay for basic school
costs?” she asked. Hauth had to use
a credit card to pay for her books
one semester. She said “I had no
other way to pay $5001 didn’t have
in cash. Not everybody has a parent
willing or able to co-sign.” Graduat
ing senior Eulie Agudelo thinks “it is
unfair to require individuals under
the age of 21 to have a co-signer
in order to be eligible for a credit
card.” Agudelo says she was able to
establish credit by “[appl3dng] for a
credit card through my credit union.
I understand that many individuals
under the age of 21 tend to not be as
‘responsible as people over the age
of 21 are expected to be, but that
is not necessarily the case. I per
sonally don’t want to hold anyone
responsible for my debt, and I think
individuals should be granted a
small amount of credit and see how
they handle that.”
In general, the CARD Act
aims to protect consumers from
deceptive credit card practices
and exorbitant fees, but banks still
UNCG to Offer
Three Year
Program
Meghan Grady, Staff Writer
The University of North Carolina at
Greensboro plans to offer an accelerated
degree program to incoming students
coined “UNCG in 3.” The program will
provide an option to complete an under
graduate education in just three years.
UNCG’s Chancellor Linda P. Brady
stated, “UNCG in 3 is perfect for students
who are eager to earn a degree and get
on with other life goals. They can pursue
a graduate degree, get a jump start on a
career or even use what they saved for tu
ition to launch their own business.” This
option wall be available to students who
have completed at least 12 hours of Ad
vanced Placement courses. Just a few of
the degree programs that the three year
program will be offered in are accounting,
business administration, communication
studies, psychology, and African-Ameri
can studies. The program will begin in fall
2010 and will plan to save participants
j around $8000 in tuition.
have other ways to make customers pay. As
reported in a January 11, 2010 FoxBusiness.
com article by Connie Prater, “credit cards
may be more [transparent] and easier-to-
understand... but at a higher upfront cost.”
Banks had eight months from the signing of
the CARD Act to its implementation to ad
just cardmember agreements. Some banks
increased interest rates, reinstated annual
fees, and reduced or discontinued reward
cards.
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