September 3, 2014

Scrolling Headlines:

New SGA leaders spend summer preparing for fall semester -

Wednesday, September 3, 2014

Devin O’Neill looks to start new chapter in UMass men’s soccer -

Wednesday, September 3, 2014

‘The Giver’ is a torturous, misguided bore -

Wednesday, September 3, 2014

Our plugged in world -

Wednesday, September 3, 2014

Mullins Center renovations aimed at improving fan experience -

Wednesday, September 3, 2014

Antonio’s Pizza by the Slice a favorite among students -

Wednesday, September 3, 2014

J.T. Blyden is earning the respect and trust of his teammates -

Wednesday, September 3, 2014

The vilification of police in America -

Wednesday, September 3, 2014

No. 10 Minutewomen swept in the “Conference Cup” to open the season -

Wednesday, September 3, 2014

UMass tuition and fees frozen for second consecutive year -

Wednesday, September 3, 2014

Too good for the charts -

Wednesday, September 3, 2014

Final Fantasy XIV turns one this month: a look back on a realm reborn -

Wednesday, September 3, 2014

Ferguson may demilitarize local police -

Wednesday, September 3, 2014

UMass falls to Utah Valley season opener -

Wednesday, September 3, 2014

UMass holds world’s largest clambake -

Tuesday, September 2, 2014

Pair of UMass seniors set to increase leadership after Koch’s passing -

Tuesday, September 2, 2014

Remembering Robin Williams -

Tuesday, September 2, 2014

Racism after dark: Violence in the ‘sundown town’ of Ferguson -

Tuesday, September 2, 2014

Integrative Learning Center opens for fall semester -

Tuesday, September 2, 2014

UMass looks to repeat success despite daunting schedule -

Tuesday, September 2, 2014

How new credit card rules will impact students

A series of new restrictions for credit card companies, which went info effect last week after being passed Congress a year ago, will impact anyone who has a credit card, but it will especially affect college students.

Credit card companies have long used questionable marketing practices in order to get America’s youth to sign up for a credit card. The companies often see young adults as being inexperienced with managing finances and therefore much more likely to misuse credit cards and therefore pay more in penalties.

“In spring of 2008, only 15 percent of freshmen had a zero balance, down dramatically from 69 percent in the fall of 2004. The median debt freshmen carried was $939, nearly triple the $373 in 2004,” according to Sallie Mae’s “How Undergraduate Students Use Credit Cards,” published April 2009.

Generally, credit card companies use methods such as switching payment dates and raising credit limits so that cardholders incur debt.  This extra debt means a number of new fees and increased interest rates, which is how these companies make their money.

With the new legislation kicking in, these practices have been at least regulated, if not banned.  The following restrictions in the “Credit Card Accountability Responsibility and Disclosure Act” (Credit CARD Act) passed on March 19, 2009, will directly affect students:

  • New laws will require a co-signer for student applicants under 21, unless they can prove they have a steady source of income.
  • No more freebies: companies are no longer allowed to offer students token gifts such as free pizza or t-shirts, etc. just for applying.
  • Fewer prescreened offers, meaning companies such as Equifax or Experian can not send credit card companies your information in order for them to send out “pre-approved offers.”
  • More transparency about college affinity card programs, meaning that credit card companies will have to disclose their marketing deals with colleges to the Federal Reserve Board.  Schools must also disclose how much they make off these deals.
  • Colleges are urged to limit, or restrict, credit card marketing on their campus.

While these new regulations will limit the credit card companies’ ability to use their old tricks, it certainly does not prevent them from implementing new ones.

“Of the 10 practices that have been outlawed, the credit card companies have already found eight new devices for getting around them,” said Elizabeth Warren, Chair of the Congressional Oversight Panel, in a recent television interview.

Even with all their traps, credit card companies cannot take advantage of consumers if the cardholder borrows responsibly and takes the time to read the fine print on their statements. Just keep one thing in mind: caveat emptor, these companies are after their pound of flesh.

Matt Bouteillier can be reached at mbouteil@student.umass.edu.

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