New Jersey to colleges: Remember credit card law, restrict sign-up freebies

Just in time for the fall semester, New Jersey has sent colleges and universities within the state a reminder about its new law regulating credit card issuers on campuses -- including a ban on the freebies that used to lure college students to sign up for the cards.

Piggybacking on the 2009 federal law, New Jersey's Credit Card Solicitation Act that went in effect in May requires credit card companies to register with the college or university before soliciting students on campus. The companies also have to provide an on-campus program to teach about interest rates, card balances, minimum monthly payments, among other credit issues. New Jersey's law also bars credit card companies from enlisting debt collectors against the parent or guardian of a college student unless the adult agreed in writing to be liable for the student's debts.

"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," says Thomas R. Calcagni, Division of Consumer Affairs' acting director. "This law will help students better understand what they are agreeing to before they sign on the dotted line."

Before signing up for a credit card, keep in mind some advice from CreditCards.com, including ignoring those credit card representatives. To avoid getting unwanted credit card solicitations, make sure you opt out by putting your name on the federally required credit bureau solicitation list by calling 888-567-8688 (888-5-OPT-OUT). If you decide to get a credit card, pay as much of the balance as you can each month if you can't pay it all off -- make those payments are early as possible to avoid late charges.