California Injury Attorney Blog

In what could be some of the most significant set of changes in the history of U.S. credit cards, aspects of President Barack Obama's Credit Card Accountability, Responsibility and Disclosure Act of 2009 that most affect college-aged students are set to kick in on Monday February 22, 2010.

"With this new law, consumers will have the strong and reliable protections they deserve," Obama said on May 22, 2009, the day he signed the bill into law. "We will continue to press for reform that is built on transparency, accountability, and mutual responsibility - values fundamental to the new foundation we seek to build for our economy."

Starting Monday February 22, 2010,, credit card companies will no longer be able to market to people on college campuses with free offers, food and merchandise, or through direct mail campaigns, says California Business lawyer Steven C. Peck. Credit card companies will also have to publicly disclose any marketing agreements with colleges and universities.

"(Credit card companies) try to offer students credit cards (saying) it's good for them," Peck says. "But they end up spending too much on it."

Among the most significant changes, people under the age of 21 will no longer be able to take out credit cards under their own names unless they have co-signers, such as their parents. Another provision calls for setting monthly due dates at the same day each month. As of now, credit balance due dates are set from 14 to 21 days after a previous payment has been made.

"It's hard to keep track of the payment day," Peck indicates. "It's a great idea (so) new credit card holders never miss the date."

Currently, anyone over the age of 18 may apply for a credit card, and each credit card company determines verifying a cardholder's ability to pay back the credit.

Under the new guidelines, anyone younger than 21 must get written permission from a parent, guardian or spouse to increase the credit line of an existing account, or to get a new account. They will also need a co-signer to assume the liability on the card if they are unable to pay the bill, unless they can prove their financial ability to pay back the card balance on their own states California Business Lawyer Steven C. Peck.

A growing source of revenue for banks - fees - will be reduced, according to the law. The new law will limit up-front fees to 25 percent of the cardholder's credit limit during his or her first year on the new account. Card companies will also be limited in when they can increase interest rates on existing balances. If cardholders pay their bills on time and do not exceed the credit limit, they may get their interest rates reduced after six months.

"It's a new day in credit cards - both for consumers as well as banks and credit card issuers," Peck says.