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New Bill Gives Kids No Credit

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Bill goes after credit card companies that prey on college students.

girls shopping using credit card

They set up shop on college campuses across America ... credit card companies eager to sign up the young, and usually broke, with their first-ever credit card. To most college kids, the thrill of getting access to easy credit is rarely dampened by consideration of maintaining a solid credit history -- or filing for bankruptcy.

A new bill seeks to change this financial downward spiral. Called the Credit Card Accountability Responsibility and Disclosure Act of 2009, it would require parents to co-sign on a credit card application for anyone under 21 years of age -- unless they are financially independent or complete a financial education class.

New York Sen. Charles Schumer is in favor of the bill, according to Newsday: "Credit cards should be a leg up for college students, not a leg trap that snares them in unbearable debt," he told the publication.

Danielle Hoston, a business and finance expert, thinks the only thing a credit card is good for is establishing credit and demonstrating financial responsibility. She advises to at least keep your kids' cards down to just one.

Here are Danielle's tips for responsible credit card use:

Cash is king
Advise your children that buying on credit is STILL like buying with cash, except that you are paying MORE due to interest and credit card fees.

It pays to pay on time
The most important thing to remember about managing your credit is to NEVER PAY LATE. Late pays can lead to higher interest rates and negative reportings on your credit report that can have long-lasting and very EXPENSIVE repercussions.

Leave home without it
Stay out of trouble by leaving your credit card at HOME and NOT using it. If you can't pay with cash, you probably can't afford it. Any outstanding balances should be paid in full at the end of the billing cycle before the interest accrues.

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