The Reality of Getting a Student Credit Card

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As controversy continues to build since the CARD Act was implemented, it now seems that the focus is that of student credit cards. While it appears that it would be harder to get plastic if you are a student, it looks like that is not quite the case. That is because of a small loophole that has been revealed that could have those that would generally be protected from accruing card debt at an early age getting plastic without having the appropriate funds or a co-signer.

 

According to an article entitled "The Real New Student Credit Card Rules", a simple lapse in judgment whether accidental or intentional has created a loophole which allows some that would not qualify to get plastic to apply and be approved.  That lapse deals directly with both evaluating the amount of income needed to be extended credit as well as the verification of such income. As it stands now issuers are allowed to include other sources of incomes besides wages earned such as scholarships, grants and parental contributions when deciding if one qualifies to get a card without having a co-signer. When it comes to verifying that such income exist it is solely based on the issuer to take the applicant’s word on the application at face value or follow up to see if the stated income truly exist.

 

With any regulations set forth on an industry especially in such a short period of time there will always be things that get overlooked. In this case it could very well be the one thing that would keep some cardholders who are not qualified from receiving cards without the income to support potential purchases. Even with such loopholes regulating the credit card industry, on many accounts is up to the student on whether or not they are willing to use their plastic wisely. When used correctly, especially at a younger age, credit cards can be a powerful tool when it comes to building a strong credit foundation. Hopefully before applying for plastic the student will do their homework as it is something that could a major impact on their financial future both positively and negatively.