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Elevations Credit Union provides information, in a program called Foolproof, to help students understand financial responsibilities. To check out Foolproof and other financial tips from Elevations, visit elevationscu.com and click on Foolproof.

If you're under the age of 21, you have a few weeks before new federal laws make it more difficult to obtain a credit card.

The laws, which take effect Feb. 22, require credit card applicants under 21 to meet certain requirements before getting approval like proof of "sufficient income" or adding a co-signer.

"Sufficient income" is defined not by the government but by the credit card companies.

At Elevations Credit Union on the University of Colorado campus, that means students' overall monthly bills could actually be higher than their monthly incomes.

"We are trying to accommodate students as much as possible," said Dennis Paul, assistant vice president for Elevations. "As long as their minimum monthly payment doesn't exceed their monthly income that's considered sufficient enough for us."

Starting next month, Paul said, students will no longer automatically receive a credit card upon opening an account. Rather, they'll receive credit cards after a more stringent review of their applications.


According to Elevations guidelines, students will be pre-approved for a credit card if their monthly income is at least as high as their minimum monthly payment. For example, if a student earns $50 per month, his or her minimum monthly payment cannot exceed $50.

Bryan Olson, a 19-year-old CU sophomore, said after having his own credit card for more than a year, he has been able to maintain zero debt by paying off his balance every month. While Olson concedes credit card debt can be dangerous for some students who do not budget well, he feels the laws are unfair to others.

"This legislation is going to do nothing more than ... make daily and emergency purchases an inconvenience for responsible people," Olson said, "while failing to do anything to deter future irresponsible people (from overspending)."

Danny Chaimovitz, also a 19-year-old CU sophomore, admits that many youngsters aren't ready to handle their own financial responsibilities.

"Too many kids out there turn 18, get a card, go buy some car or expensive snowboard or TV or whatever widget they want, thinking it's free money," Chaimovitz said, "then they got socked with a massive bill.

"Making it more difficult to get a card will make college students realize it is a huge responsibility -- one they must treat with the utmost respect."

The toxic combination of students and credit cards is old news to Philip Bienvenu, lawyer for Student Legal Services at CU. Bienvenu said he has often helped students deal with legal issues surrounding their immense debt, including filing for bankruptcy.

Bienvenu advises students to consider interest rates when applying for credit cards. The interest can cost students in the long run and there are often better options for students with lower interest rates, he said.

President Barack Obama signed the Credit Card Accountability Responsibility and Disclosure Act in May to protect consumers from unfair rate hikes and hidden fees, according to a White House news release. Along with protection from rate hikes, the act also attempts to "clean up credit card practices for young people at universities."

To help students avoid falling into the black hole of debt, finance professor Michael Stutzer suggests that students simply live a frugal life of brown rice and cheap beer.

"Students should minimize their credit card balances, period," Stutzer said. "No ifs, ands, or buts."