by Alison Storm | 08/27/10

The new credit card laws could help protect college students. They're being phased in this year and mean that people under the age of 21 can no longer get a credit card on their own. They must have another adult co-sign and prove an independent source of income. The new laws also say that credit card companies can't entice college students with freebies like t-shirts or Frisbees in exchange for signing up.  But for some students these new laws came too late.

The Washington Post interviewed 20-year-old Tamaira Shaw who says Bank of America pre-approved her for a credit card with a $500 limit so Tamaira took that as an open opportunity to spend. "They randomly sent it to me," Shaw recalled this week as she started another semester at UDC. "I was just excited." She bought a cellphone, books and clothes, maxing out her card. Her mom is now helping her to pay off the balance which also includes hundreds of dollars worth of charges and fees.

Ed Mierzwinski, consumer program director of US PIRG, an advocacy group told the Washington Post that young adults have always been a target for credit card companies. "Their goal is to hook you on credit," Mierzwinski told the Washington Post. Statistics from student loan company Sallie Mae show that nearly half of college students have a credit card. In 2008, college students racked up an average of $4,100 in credit card debt while earning their degrees. That was an increase of more than $1,000 compared to data from four years earlier. "If you were a student and you could fog a mirror, you could get a credit card," Adam Levin, co-founder of Credit.com and former director of the New Jersey Division of Consumer Affairs, told the Washington Post.

Lawmakers hope the new rules limit the amount that credit card companies target college campuses. Chase says it stopped using student mailing lists back in 2006 and even halted marketing efforts on campuses and athletic events in 2008. Bank of America says they no longer set up tables on campuses.

Some students have learned their credit card lessons the hard way like AU law student Steve vonBerg. He racked up $7,000 in credit card debt to fund a business start-up post-graduation. He told the Washington Post paying it off took four years and has some advice for today's college students. "Don't take it into bars with you. Realize it's not free money."