Under the Credit Card Accountability, Responsibility and Disclosure Act , which took effect yesterday, no one under the age of 21 will be approved for a credit card offer unless a parent, guardian or spouse is willing to co-sign, or the young adult shows proof of sufficient income to cover the credit obligation.

The new law also requires credit card companies to significantly cut back on their marketing efforts to college students.  

According to a recent study by Sallie Mae, a site which helps students plan their financial future, the average amount of debt carried by college cardholders is $3,173. The average number of cards per student is 4.6.

“The law should benefit most under 21 students by restricting access to credit at a time before most have achieved financial literacy or can afford to manage the potential debt load,” Ben Woolsey, director of marketing and consumer research for CreditCards.com, said.

Woolsey said restricting students’ access to credit will prevent large amounts of student debt.

“Teens typically don’t understand all the potential pitfalls and responsibilities associated with credit cards and rarely have the income required to pay off balances in full, which often results in growing and expensive card debt that can spiral out of control,” he said.

According to Woolsey, a damaged credit history can have a drastic impact on one’s future.

“Many employers consider job applicants’ credit scores when making hiring decisions so it can have far reaching implications to misuse credit while in college,” he said.  “Late or non-payment of balance can seriously harm their credit history and impair their ability to obtain credit in the future at affordable rates when it comes time to buy a car, rent an apartment, buy a house, etc.”

Woosley, however, said there was a negative element to the legislation. 

“The potential harm is that there will inevitably be a segment of those in that age bracket that could have handled credit responsibly and will now have to deal with greater restrictions in obtaining it,” he said. 

Marc Metry, a freshman in biological science, said he doesn’t like the rule because it penalizes those who are irresponsible at the expense of those who are financial responsible.

“I don’t think I should be penalized because of someone who doesn’t know how to handle their finances,” he said. ”It’s absolutely ridiculous.” 

Evan Mahoney, a freshman in computer science, said he thought the regulation is problematic for those wanting to build up their credit for future car or housing loans. 

“People won’t be able to build up their credit as easily before the end of college,” he said. 

The law will also affect credit card companies. 

“The new law will reduce card issuers’ revenue to some extent since college-aged customers are more likely to carry balances and pay higher finance charges and fees than older adults,” Woolsey said.  “College students tend to keep their first card for quite a while which further enhances the profitability of the relationship for the credit card company.”

Ryan Harris, a freshman in business administration, said he believes the regulation is in the best interest of students. 

“I don’t think a lot of college students have the maturity to handle the financial responsibility.  At this age, if you don’t have any income, you definitely shouldn’t have a credit line of $2,000.” 

Harris said there are too many students carrying debt they shouldn’t have. 

“Credit cards are a good idea if you have the means to support it, but if you don’t have the means, you have no business having a credit card.”