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SmartCredit.com President of Consumer Education John Ulzheimer on the new restrictions on students getting credit cards, and how many are getting arou...
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Well it used to be getting a credit card at a college campus was as easy as grabbing a beer on a Friday night.
The with new safeguards put in place by the card act the days of easy access to plastic for students are gone.
The result parents now say they have more in in the credit they have more say that is in the credit card choices -- kids make here to fill us in on all the options John Alzheimer.
President consumer education for smart critic dot com John welcome to the show.
Do you really think that the card act is helping parents here.
I you know I think that the theory or the hypothesis is pretty solvents keep credit cards out of the hands of college kids about some of our sites we keep them out of debt.
The probably Jerry is that.
The execution was was pretty mumbled so the college kids are really not having.
Much problem still getting their hands on credit cards they're just going about it now.
Kind of a dangerous way including have been other students cosigned for a ban and while actually claiming that student loans are in common so they -- the income sniff test.
Required product -- so.
Unfortunate are still getting it done but not the right -- We I don't hear more about that so they're having.
-- would guardians or parents are what are they dealing.
One other one of the I loopholes Andy card act under 21 provision is year have a co signer or you having -- com.
And if you get -- a lot of money -- paid to you not to the school so we're considering -- -- -- com on an application and banks are accepting it the second alternative is.
They're just having their classmates who are over 21 cosigned for them so they passed the co -- a requirement of -- carnac.
Therefore there still able to get around in the looked it isn't just this isn't just anecdotal there's a lost a law school professor at the University of Houston.
They just finished a study on this very topic and 76%.
Of the students in his survey acknowledge that they are having no problems getting credit cards obviously not was not.
The -- and I.
Don't have answers I'm not I don't know where we are now I don't want that while and I brought my Rotblat.
I wanna get a number one -- kids not to get -- -- -- cider or declare their ones that pink down.
But beyond that okay what are we gonna tell parents to do here if that let's say they actually do wanna give it hits a credit card of some sort what is the best com about.
I think I've authorized user relationship is the best at night each is a credit card to parent uses -- credit card that's got a long and solid credit history.
And a high credit limit and a low balance hopefully they've got one of those.
And they -- add their -- what's referred to as an authorized user it's kind of like a credit card its training wheels.
They get a car with their name on it they can music but they have no rights they can't change the address of the -- they can't increase the credit limit.
And if the parent -- abuse of that -- Making -- take their kid off -- it.
Well I guess that makes some sense.
Have a co signing for -- should mom and -- I'll -- I really really don't like that idea Jerry and here's why when you cosigned for a hard.
You are equally as -- as the other person to sign which means that if the parent gets into some sort of financial trouble loses their job or whatever or just becomes irresponsible.
And Max about the car starts missing payments guess what the blow back is gonna go on the students credit report.
Not good because -- they cannot get off the car because they had equal liability by about paying upfront for -- Yeah that the third alternative as kind of in the metal which is the prepaid secured -- -- credit car where you put a deposited a bank can have a party should but the equal credit limit.
To the deposit not a bad idea because she can control the amount of available credit at the student has.
It does help them to build a credit history if the card is reported to the credit bureaus.
Not about alternative.
Those kids are so sneaky we really have to do you think I picked up a path to god thank you -- I don't for that Friday that that unbelievable thank you -- out -- you bet.
