Money Fix: Changes coming for credit card users

Just about everyone will be impacted next Monday when the U.S. Credit Card Act becomes law -- college students included.

The big change for people younger than 21: To get a credit card they'll have to demonstrate they have the income to pay the bills or get a co-signer, in many cases a parent.

Not to worry if you're younger than 21 and already have a credit card, says Gerri Detweiler, personal finance adviser for Credit.com. You won't be asked to jump through those hoops.

The law will affect those without cards. Indeed, she expects card issuers to focus their marketing efforts on older students, for whom there'll be fewer barriers.

That's not so bad when it comes to non-necessities but it will be problematic for those needing credit as a backup for educational costs such as textbooks, school supplies and tuition, she says.

So here's what a consumer should know?

Co-signer. Even if you pay bills on time, the co-signer's credit score will be affected if you carry a large amount of debt. Your debt becomes part of the co-signer's debt, and that has a negative impact on the co-signer's debt ratio -- one of the factors in figuring out the score.  Another danger: If you fall behind on payments, it will  reflect poorly on the co-signer's score.

Debit cards. Students can turn to debit cards, but Detweiler warns against incurring overdraft fees -- so always keep track of how much you have in the account. Prepaid cards can be a good idea, but they often carry fees, she says.

LEARN MORE
Fordham University is holding a public forum Wednesday from 12:30 to 2 p.m. in Room 109 at 155 W. 60th St., Manhattan.

The title. "The U.S. Card Act: Coping with Students' Financial Stress." There's no registration, and all are welcome.