Our Kansas City Bankruptcy Attorneys Discuss Debt Relief
Just a few years ago, college students were easy targets for credit card companies. Representatives from these companies often appeared on college campuses, encouraging students to sign up for credit cards. This advertising was effective, and many students signed up without understanding concepts such as annual percentage rate (APR). This resulted in many students dealing with excess debt even before they left college, forcing them to explore debt solution options like bankruptcy.
In response to this and other credit card company practices, the U.S. Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act). This bill offered a number of protections to credit card holders – especially those of college age.
How Does the Credit CARD Act Affect College Students?
The Credit CARD Act added provisions that limit sudden interest rate hikes, curb unfair or excessive late fees, make costs clearer and provide other measures to protect consumers. In addition, the act offered a number of protections specifically for college students:
- Financial institutions may not offer gifts such as T-shirts or pizza in exchange for submitting credit card applications
- Applicants under the age of 21 must either have a cosigner or prove that they can repay the debt (by providing proof of income, for example)
- Those issuing credit cards must submit annual reports to the federal consumer agency that detail the terms and conditions of any cards intended for college students
- Credit card issuers must reveal any agreements they have with schools
The act intends to cut back dramatically on credit card companies marketing to college students to prevent future students from unnecessary debt.
Did the Credit CARD Act Work?
The Credit CARD Act is largely a success years after its implementation. A recent report by the Consumer Financial Protection Bureau reports that the relationship between universities, their students and credit card companies is waning. Marketing agreements between financial institutions and colleges are becoming more uncommon, and total payments made by card companies to universities have significantly decreased. Additionally, the total number of credit card accounts opened by college students declined rapidly since the act was introduced.
Still, the act cannot altogether prevent new students from falling victim to debt, and these measures do not assist those already stricken with debt from college credit cards. However, the Credit CARD Act should minimize some of the potential financial hazards college students face.
How Can I Get Out of Credit Card Debt?
If you face seemingly insurmountable debt and need a solution, the Kansas City bankruptcy lawyers at The Sader Law Firm can help you find a way out. We can work with you to decide if you should file for Chapter 7, Chapter 13 or can seek alternatives to bankruptcy if you are eligible. To speak with our Kansas City bankruptcy attorneys, call our office today for a free consultation.