People below the age of 21 years are going to find it rather difficult to get a credit card since the introduction of the CARD Act which has been forward in 2009. The CARD Act stands for Credit Card Accountability, Responsibility and Disclosure.
From the beginning of the year 2010, individuals below the age of 21 years will not be permitted the issue for a credit card unless they provide with proof or evidence to suggest that they will cash out their loans and leave no unclear debts.
Several blogs have started protesting against this Act already because in a way people below the age of 21 years are being singled out and treated unfairly from the rest as legally they do qualify as adults.
The records of credits in the banking system prevail to be one of the biggest factors that would determine the amounts of loan as well as the rate of interest at which it is given out at and this is despite what politicians decide.
However as it is now more difficult for individuals below the age of 21 years to get credit cards, it is natural that they will have a lack of time to work on their credit records and thus will be on the losing end in any sphere where a credit check is required. And mind you, a credit check would be required for thing as basic as wanting to rent an apartment.
I feel introduction of this law will create a pattern of consumers who fall in the younger group to move towards preferring secured credit cards. The concept of secured credit cards is much like that of regular credit cards. Just that in this case, the secured credit cards need a security deposit which is sync with the limit of the card.
In this case if the consumer fails to clear his debts, then the company simply withdraws his card and takes the deposit that has already been made in payment. Hence the consumer does not have to put in an extra effort to gather proof as this security proof already serves the purpose of designating the ability of the consumer to clear the debts issued on his credit card.
In addition to that, since the secured credit card functions just like a regular credit card, by using it, the individual can build up a advantageous credit record as well.
Regular credit cards require a person to get a lot of paperwork done which he can easily choose to avoid by using a secured credit card instead. They will not require a witness to acknowledge their ability to repay their loans or need proof of income to establish the same.
They can use their secured credit card depending on the amount they choose to deposit. Also one can use this card wherever a VISA or MasterCard can be used, users of the secured credit card will be able to buy things online or in other places that compel the using of a credit card.
