Fewer college students will be able to get credit cards under the new law signed by President Barack Obama last week. The eBillme online payment service has added a new feature called eBillme Teens that enables younger consumers to pay for web purchases through their online bank accounts, or to forward a bill to their parents.
The enhancement builds on the standard eBillme service that allows consumers to pay for online purchases through the Internet bill-payment systems they use to pay utility, mortgage and other bills.
"We strongly support the measures within the Credit Cardholders' Bill of Rights that will limit access to credit for consumers under the age of 21, but recognize that this demographic relies on the Internet for online banking and purchasing,” says Marwan Forzley, president and CEO of eBillme. “These new reforms will prompt many consumers to look for credit card alternatives at the online checkout. We are excited to offer eBillme as a safe, debt-free checkout option for online merchants to provide in response."
The new law prevents credit card companies from issuing a card to students 18-21 unless they can show they have income, or get a parent to co-sign. If the student does have income, his credit card limit is to be no more than 20% of his income or $500, unless there is a co-signer. The bill prohibits extension of credit to anyone under 18, unless the individual is legally emancipated under state law.
The law could significantly impact the way college students pay online. EBillme cites a study by student loan provider Sallie Mae showing that 84% of college students have at least one credit card, and that the average student is carrying $3,173 in credit card debt. And 71% of Internet users aged 18 to 32 make purchases online, eBillme says, citing data from the Pew Internet & American Life Project.
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