A line in a news story about credit card debt caught my eye last week:

“Come February 22, 2010, college students won't be tempted with free pizza and other goodies to sign up for credit cards.”

If you don’t have college-age kids, you may not know of the aggressive marketing the card companies use on campus. Bank marketers routinely approach college students with offers of free stuff, such as pizza. The kids are easy marks.

Expensive Pizza

When students go to the pizza place, they are asked to fill out an application. To many students, free food and a credit card of their own is an irresistible combination, so they’re happy to go along. For some, this will become very expensive pizza, as their credit card debts mount.

The card companies know not all the students will become long-term customers, but they also know many will. They are pleased to keep the good customers.

I doubt they have much concern for the young people they start on a downward spiral of high card balances and never-ending payments.

Build Credit, Don’t Destroy It

Used right, credit cards can help young adults establish a good credit history that will help them get loans later for houses and cars. Consumer advocates say the new rules will help protect young consumers by cutting way down on the pizza pushers.

As of February 22, 2010, the free handouts from card companies in exchange for completed card applications will no longer be legal – and card issuers will have to disclose any marketing contracts they have with colleges and universities. (That’s right; a lot of this has gone on with the participation of the colleges.)

Cosigner Required for Under Age 21 Applicants

As an added precaution, people under age 21 who apply for a credit card will have to prove they have an income and can make card payments, or they will need to have a cosigner.

Cosigners (including parents) beware! Your credit rating could be affected by the actions of the person you cosign for.  Done right, this will enable parents to guide their young adults to responsible use of credit.

Is This the Real Price of a College Education?

A study by Sallie Mae shows college seniors now graduate with an average of $4,100 in credit card debt, up from $2,900 five years ago. Considering many of them also carry tens of thousands of dollars of debt in student loans, some are surely on their way to an unrecoverable situation.

The new law can’t take effect fast enough. Tell any college students you know to be on the lookout for a heavy marketing blitz by the credit card companies between now and then.