New York Attorney General Andrew Cuomo wrote letters this week to colleges and universities across the state, requesting that they submit any information they have on contracts with credit card issuers. The Credit Card Accountability, Responsibility and Disclosure Act that went into full effect on August 22 now prohibits young adults under the age of 21 from applying for credit without an adult co-signer or the financial means to repay the debt.
Bloomberg reports that Cuomo’s efforts are directed toward ridding campuses of credit card companies, which have solicited students into applying for credit in the past. Issuers have received heavy criticism for offering freebies to young adults, such as water bottles and T-shirts, if they agreed to sign up for cards.
“Today’s students are facing a growing mountain of debt that can burden them long after graduation,” Cuomo told Bloomberg. “As the new school year begins, we want to make sure that colleges and universities are doing all that they can to help students avoid financial dangers.”
While it is important for young adults to build a payment history, debt can result in credit score damage. This can result in difficulty for consumers looking to borrow in the future.