President Barack Obama is expected to sign a bill that will prohibit people younger than 21 from getting a credit card unless they can prove they have a way to pay the money back or a parent or guardian co-signs the agreement.
The bill — which the Senate approved Tuesday, 90-5, and the House approved Wednesday, 361-64 — will go into effect in nine months if Obama signs it into law.
According to an Associated Press report, Campus Progress spokesman Pedro de la Torre said, "The hope is that when they spend, they'll spend under better terms and there'll be fewer traps for them." Campus Progress is an organization that tracks issues affecting young people in Washington.
According to the group, aggressive marketing by credit card companies and agreements with universities have presented young people with ample opportunities to borrow money they can't repay. Seniors with credit cards are graduating with an average debt balance of $4,100, a 41 percent increase over the past five years, the group says.
Representatives of the banking industry are less excited about the bill.
"Less credit will be available generally, which means some consumers and small businesses will not be able to obtain credit cards at all, particularly younger people and startup small businesses," said Edward Yingling, president and CEO of the American Bankers Association in the Associated Press report.
Will age restrictions for obtaining credit cards solve credit problems for young people?