Limits on Credit Cards for Minors and College Students
- No credit cards for minors under 18 unless they have been emancipated or are authorized users on a parent or guardian's account.
- No credit cards for college students who do not have verifiable income or already has an account with the credit issuer. A college student's total available credit should not be more than 30% of his annual gross income for the previous year.
- Parents must approve credit limit increases for college students with whom they have joint accounts.
Limited Fees for Subprime Credit Cards
- Limits on fees for subprime or "fee harvester" credit cards. During the first year of a credit card, banks cannot charge fees that exceed 50% of the credit limit. Only 25% of the fees can be charged when the account is first opened. Any additional fees must be spread over at least five billing cycles.
More Detailed Disclosures
- Credit card issuers are required to simplify credit card disclosures. The use of tables and bold text will be used to emphasize key information on credit card disclosures. Credit card issuers will be required to disclose the duration of penalty interest rates, simplify information about variable interest rates, and detail when grace periods do and do not apply.
- Billing statements must include the effects of making minimum only payments. The statement must include a sentence stating that paying on the minimum increases interest paid and balance pay off time.
- Billing statements should include detailed pay off information. At least quarterly, your statement should include:
- the number of months it will take to pay off your balance making minimum-only payments.
- the total cost of making minimum-only payments.
- the monthly payment necessary to pay off the balance in 1, 2, or 3 years.
- a toll-free number to call for credit counseling and debt management. - Credit card solicitations should include information about the effects of too many credit report inquiries. Several credit inquiries can lower your credit score.
These rules will take effect on February 22, 2010.
Learn about changes to interest rate increases, finance charge calculations, payment processing, and more. Read the proposed changes to the credit card rules.