BOSTON (CBS) – Sweeping reforms in the banking industry have made it much tougher for college students to get their own credit cards, but experts say teens are finding ways to get around the new laws and it could be putting them and potentially their parents at risk.

Molly Heilny is frustrated. The 20 year old college sophomore can’t get a credit card. “I don’t really have anyone that could co-sign, so I could apply for a million credit cards and they’re never going to give me one,” Heilny said.

That’s because when the federal credit “CARD Act” went into effect it restricted anyone under 21 from getting a credit card – unless they have someone over the age of 21 co-sign for it or they can prove they have a source of income.

WBZ-TV’s Paula Ebben reports.

“The hypothesis behind that provision of the CARD Act was to make sure that consumers who are under 21 who are generally in school, do not have high paying jobs, did not get into an excessive amount of credit card debt,” said John Ulzheimer of

But experts say some college students are finding loopholes and creative ways to get around the law.

“One of the ways that we’ve seen college kids do this, and it’s actually quite clever, is they’re actually finding classmates who are in fact over 21 and do qualify under the CARD Act rules to cosign for them,” Ulzheimer said.

One web advice column even fielded a question from an over-21 student asking if he should start charging students to co-sign, thinking he’d make money doing it.

Experts say paying to piggyback off someone’s good credit is common and could really take off on college campuses.

“It’s very possible that a whole industry could spring around consumers willing to sell or rent out their good credit to younger students who are having trouble establishing credit for the first time,” said Gerry Detweiler, author of The Ultimate Credit Handbook.

Another option is business credit cards which have no age restriction. Anyone can apply and you don’t even need to prove you have a business.

“It is a gaping loophole in the CARD Act and the credit card community is definitely taking advantage of it,” Ulzheimer said.

Business credit cards don’t have the same consumer protections as regular credit cards, but that’s not stopping some determined college students.

“Kids will find a way to get it if their parents do not cosign for it so I am sure there are ways around it,” said student Nikko Lara.

If you are considering co-signing for someone under 21, you need to remember there’s no such thing as safe co-signing.” When you co-sign you are taking on legal liability for that debt, so if the person you cosign for can’t or doesn’t pay, guess what? You’re going to be the one getting the calls from the debt collectors,” said Detweiler.

It’s important to remember when you co-sign for anyone, that debt appears on your credit report for years to come, which can also impact your credit score if you ever apply for a mortgage or a loan.

Paula Ebben

Comments (6)
  1. Cynic says:

    When the student Graduates and moves back to Oshkosh why should they be concerned with paying their Credit Cards… You’re the co-signer,You’re stuck with it. Why in the world would anyone co-sign for anyone? They would have to have king sized rocks in their head.Most students I know have a credit card with Daddy’s name on it anyway. They never see the the bill.

  2. Cynic says:

    Why does the Government ALWAYS leave a “GAPING LOOPHOLE” in everything?

  3. msw says:

    Anyone stupid enough to co-sign deserves to get their credit ruined – that’ll be a good life lesson and they won’t do it again.

  4. emom says:

    This is how the government SUCKERS you into a false belief,, AHHH the smell of stupidity in the wind,, it just gets better every time… Foolish folks need not try and be smart,, oh wait hahahahah,,and they have degree’s yup priceless

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