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PROVO -- A new federal law prohibits credit card companies from selling their wares to college students under the age of 21. The federal government wants to prevent students from running up high bills when they don't have any money.
But BYU finance professor Ned Hill says it also has an unintended consequence.
"It prevents them from establishing a credit history. So, students have to be more energetic in getting a job so they could qualify to get a credit card on their own, or they could go on their parent's credit card," he says.
While it may not sound like a good idea to put a freshman as a partner on a parent's credit card, Hill says, "parents can monitor if (students) are spending wisely and using credit wisely."
He says it's a bad idea to co-sign on a credit card. Hill says "if anything were to happen then the parents would be liable for it."
Hill says building up or ruining credit history at a young age could affect future purchases like a home and could prevent or help in hiring since employers now look at FICO scores.
He says it could also play a part in bigger moments.
Hill says students could hear on a date, "'Honey, you look beautiful, but what's our FICO score?' That could prevent some really good things happening there."
E-mail: cwall@ksl.com
