Harder for the Young to Gain Credit

Those under the age of 21 are about to face tough restrictions for obtaining a credit card.

The second phase of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 has taken effect. The law was passed last year to curb credit card abuses perpetrated by the issuers.

In addition to limiting the credit card companies from raising interest rates and imposing fees, the law also limits the ease in which anyone younger than 21 can open a credit card.

If you're under the age of 21 you will need a co-signer over the age of 21 to obtain a card and they have to have a good credit score for you to qualify.

Credit card companies can no longer target school sponsored events, a place they traditionally obtained their newest, youngest, consumers.

Also, you will need sufficient income to maintain the card. The Act doesn't specify exactly what qualifies as sufficient income, and rules are likely to vary by issuer.

These restrictions are a positive step in protecting a young persons credit score, but it can mean many things. No credit history is not always a good thing - many times in background screens, those without credit history receive warnings or alerts and further investigation is often necessary to completing the pre-employment check. There are way around the alert, however, it is a consideration. It is a good idea to try to obtain some type of identifying information, such as opening a rental agreement or placing your name on utility bills to obtain financial history information.