Not long ago, college students at freshmen orientation were inundated with offers for intro credit cards. But times have changed. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act) put significant restrictions on credit cards for people under the age of 21. As a result, in 2013 the percentage of consumers ages 18-20 with a credit card dropped by more than 50% as compared to 2007.
If you’re under 21 and seeking a credit card, there are still ways to get one. In order to do so, the CARD Act requires that you meet one of two tests:
Get a Co-Signer. You can qualify for a credit card if a parent, guardian or other person over the age of 21 with sufficient means to pay the credit card bills joins the account as a co-signer. Keep in mind that you and your co-signer will be jointly responsible for the account, and any missed payments will affect both of your credit scores.
Show Proof of Income. The CARD Act allows consumers under the age of 21 to obtain credit cards in cases with the consumer has an independent ability to pay the credit card bills. This means proof of income. If you have a part-time job or work in the summer, you may be able to qualify.
If you meet either test, many banks will be willing to issue you a credit card. When used responsibly, a credit card can be a great convenience, a source of valuable rewards and a tool to build a strong credit score. And using a credit card in college can give you a jump start on these benefits. While it’s harder to qualify today than in the past, it’s certainly not impossible–especially if you understand the rules!