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That free T-shirt featuring your school logo in exchange for an effortless credit card application is about to become a thing of the past. The major provisions of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act take effect in February, and the new rules include protections for college students and limit the way credit card companies market on campuses.

“Providing college students and young adults with easy access to credit can, in some circumstances, be a recipe for financial disaster in the future,” says Brent A. Neiser, a Certified Financial Planner (CFP®) and director with the National Endowment for Financial Education® (NEFE®).

A recent survey conducted by Sallie Mae finds 84 percent of undergraduates have at least one credit card and half of all college students have four or more credit cards. This access to credit is resulting in record-high balances among college students. Sallie Mae says seniors are graduating with credit card debt averaging $4,100, up from $2,900 when the survey was last completed in 2004.¹ Soon, however, credit will be tougher to access.

When the CARD Act legislation goes into effect February 22, 2010, lenders will be prohibited from issuing credit cards to individuals under the age of 21 unless they can demonstrate the ability to make payments on their own or have a parent or guardian co-sign the application.

So how else will credit card companies’ access to college students and young adults be impacted by the new legislation in February?

• No more T-shirts. The CARD Act will prohibit offering giveaways at application sites on or near college campuses.
• Fewer "preapproved" offers. Under the new law, credit reporting agencies such as Experian, Equifax and TransUnion cannot provide credit card lenders with details about any individual under the age of 21, unless that person has granted access for his or her information to be shared.
• Less space on college campuses. The legislation will urge colleges and universities to restrict credit card marketing on their campuses, including requiring advance notice of when lenders will be on campus and limiting the locations of marketing activities. The law also encourages colleges to require credit and debt management sessions as a routine part of new student orientation programs.

For more information on the Credit Card Accountability, Responsibility and Disclosure (CARD) Act that President Barack Obama signed in May, visit http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

To read more about the University of Arizona APLUS study, visit www.nefe.org/aplus.

How Undergraduate Students Use Credit Cards: Sallie Mae's National Study of Usage Rates and Trends, April 2009, http://www.salliemae.com/