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You may recall that before I wrote about the new credit card regulations that go into effect on the 22^nd of this month. In this post I would like to highlight the changes in teen credit. The changes are going to affect how young adults can obtain credit and establish credit. In the past college students were a big target of credit card companies and credit was easily obtained if you were 18 or older. Listed below are some of the positive and negative aspects of  the new changes.

Having a job or co-signer: According to the new laws, young adults will not be able to apply for a credit card until they turn 21.  They can still apply for a credit card if parents or other adult above 21 co-sign or if they have a job with enough income to qualify for the card.

 Good/Bad for Parents: The negative aspect of these changes for parents is that in the past if their kids racked up a ton of credit card debt while away at school they were not legally responsible for repaying. Now parents will have to co-sign if they don’t have enough income, so if they get into trouble then it could also be your credit on the line. But the positive aspect is that you can now have more control over your kids spending. You can get them a card with a good interest rate and a reasonable credit limit knowing that they are not accumulation thousands in debt without your knowledge. Now would be the best time to start teaching them about responsibility and good spending habits helping them early on to establish good credit.

 Good/Bad for Teens: There are a lot of positive aspects to the changes for teens. It is going to be much less likely that you will accrue a ton of debt at such an early age and avoid possibly ruining your credit at the start of your adult life. But the negative aspect is that if your parents already have bad credit then you could potentially have to wait till you are 21 to get a card and start establishing credit - unless you have sufficient income. Establishing good credit early on is very important because it plays a huge part in getting a good job, apartment, or buying your first home.

 There is no way to avoid these changes so now is the time get educated about credit and budgeting skills to set the tone for a successful future! Check out www.cesidebtsolutions.org/financial_education/for some great free online courses to help you get started.

 Source: http://genxfinance.com/2010/01/13/new-law-makes-it-harder-for-teens-to-get-a-credit-card-starting-february-22/