Requirement of a Cosigner

• An applicant younger than 21 must have a cosigner unless the applicant shows means to pay the debt without a cosigner or completes a certified course in financial literacy or education. The cosigner may be a parent, guardian, spouse or other person who is at least age 21 and can repay debts. A cosigner becomes obligated along with the applicant to repay debts that the applicant incurs before reaching age 21. A creditor may sue a cosigner for the entire amount owed if the cardholder defaults. The Office of the Minnesota Attorney General warns that creditors may treat guaranteed debts as obligations of cosigners, potentially preventing the cosigner from obtaining other credit.
  
  

Cosigners and Increased Credit Limits

• A cosigner must agree in writing to an increased credit limit, or the maximum amount that an applicant can borrow through a credit card. By agreeing to the higher limit, the cosigner agrees to be responsible for the payment of higher amounts of debt that a consumer incurs.
  
  

Tangible Inducements Prohibited

• Credit card companies may not induce college students with coffee mugs.Jupiterimages/liquidlibrary/Getty Images
  
  Credit card companies may not use clothes, hats, mugs and other physical items to induce students to apply for, open or use credit cards. These restrictions apply when the company markets to students on or near a college campus or at a college-sponsored event. The United States Office of Special Counsel does not treat as a violation the offer of tangible items without regard to whether the recipient applies for credit.
  
  

Pre-Approved Offers

• The CARD Act significantly curtails the use of pre-approved, or pre-screened, offers. Credit card companies pre-approve potential customers by obtaining from a credit reporting agency a list of persons meeting criteria such as a credit score. The CARD Act prohibits these agencies from furnishing credit reports showing that a person is younger than 21 years old unless the person consents to having the report furnished.