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NEWARK
– The Division of Consumer Affairs
has mailed letters to all public and private
college and university administrators in
New Jersey, reminding them that a new state
law requires credit card issuers to register
with their institution before offering credit
cards on campus to students.
The
state’s Credit Card Solicitation Act,
which took effect this May, also requires
credit card issuers to provide an on-campus
education program. The program must include
an explanation of when any introductory
interest rate expires and higher rates begin,
how interest on unpaid balances is computed
and how long it will take to pay off balances
if only minimum monthly payments are made,
among other information.
Gifts
and other promotional incentives designed
to entice students to apply for a credit
card are prohibited, under this law.
“Easy
credit may sound good to cash-strapped students
but the downside can be a deep spiral into
a whirlpool of debt, with no easy way out,”
said Thomas R. Calcagni, Acting Director
of the Division of Consumer Affairs. “This
law will help students better understand
what they are agreeing to before they sign
on the dotted line.”
The
Credit Card Solicitation Act also prohibits
credit card issuers from taking any debt
collection action against the parent or
guardian of the student unless he/she has
agreed in writing to be liable for the debts
of the student.
Credit
card issuers who violate provisions of this
law are liable for civil penalties between
$5,000 and $10,000 for each offense.
Consumers
can report any suspected violations of the
law to the Division of Consumer Affairs
by filing an online complaint at www.nj.gov/oag/ca/ocp/ocpform.htm
or by calling 1-800-242-5846
(toll-free within N.J.) or 973-504-6200.
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