Credit CARD Act deemed a helpful regulation

Legislators have put forward a number of new laws in the past few years, which have provided consumers additional protections from predatory lending practices.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009, which went into partial effect in February of last year, provided a number of protections for college students to help them avoid overwhelming debt.

Prior to the legislation, credit card companies could use marketing tactics, such as giving out free pizza or clothing items on campus, as a way of attracting new customers, Investopedia reports. Many college students signed up for credit cards, taking the free merchandise that accompanied the plastic, and ended up falling into overwhelming debt that ultimately caused them to endure black marks on their credit reports.

However, the Credit CARD Act instituted new rules mandating that individuals under 21 who want a credit card must have an adult co-signer or proof of financial independence. This protection helped limit the amount of credit cards on campus, and in turn, prevented some students from taking on unnecessary debt.

While the rule has helped many young adults practice more responsible financial management, even students who pay their bills every month may still face credit issues. This is because merchants and creditors may provide the credit bureaus with erred information, such as marking an on-time payment as late or missed.

Consumers may be able to dispute a questionable mark on their credit report to help them improve their credit. In some cases, individuals will contact a credit repair attorney who has experience working with the credit bureaus to help in the dispute process.