updated 9/22/2009 5:56:43 PM ET 2009-09-22T21:56:43

When Andrew Merki was a freshman at Indiana University, a credit card marketer approached him and said he could get free pizza just for showing up at a local Papa John's.

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"I thought, 'Free pizza? Good deal,'" he says. But when he got to the Papa John's, he met an obstacle. He had to fill out a credit card application on one of four computers set up for that purpose before he could get his free slice. "They didn't actually let you know that until you got there," he says. Merki typed in some fake information and got his free food. He's now a junior and does not have a credit card — and he says that's fine with him.

Merki, who's chairman of student consumer advocacy organization the Indiana Public Interest Research Group, managed to beat the system. But many other students have followed through with such marketing lures to become new credit card holders.

Come February 22, 2010, college students won't be tempted with free pizza and other goodies to sign up for credit cards. That's when new marketing restrictions and other rules will take effect, and the end result should be fewer plastic-driven shopping sprees for consumers below the age of 21.

The average college senior was saddled with credit card debt of $4,100 in 2008, up from $2,900 in 2004, according to a Sallie Mae survey. Credit card companies expect young consumers to stay loyal to the first credit card brands that make it into their wallets. The card issuers sometimes get information on students directly from colleges, for a fee.

Students can end up with cards with very high interest rates or big fees that can make it easy to accumulate a mountain of debt. The average college student is already awash in credit. Most have four or more cards, and only 17 percent said they always pay off their full balances every month, according to Sallie Mae.

Of course, many college students use credit cards responsibly. Merki notes that some of his classmates use cards for necessary items like textbooks. But consumer advocates say the new credit card rules will protect young consumers by cutting down on unfair or pushy practices.

Under the new rules, credit card companies will no longer be able to give out free gifts in exchange for filled-out credit card applications. "This is going to make it somewhat less likely that students that are not ready for credit will be tempted into it by easy access or freebies," says Gail Hillebrand, senior attorney for the nonprofit advocacy group Consumers Union, publisher of Consumer Reports magazine. In addition, card issuers will be required to disclose any marketing contracts they have with colleges.

Under 21? Get a co-signer
A second big change could prove trickier. Americans under the age of 21 will be required to prove they have a source of income to pay off any charges, or will need to get a co-signer before they can get a card.

The new rule gives parents a chance to say "no" and teach kids a valuable lesson about money, spending and personal responsibility, says Susan Beacham, chief executive of Money Savvy Generation, which educates parents on how to talk to their kids about money.

A co-signer — whether it's a parent or an older friend — is "agreeing to take personal responsibility for the debt the child incurs," notes Beacham.

That means the co-signer's credit score can get dinged if the cardholder does not pay his or her bills on time. "We don't need to do that to ourselves or give our children that ability," she says.

Hillebrand, the attorney with the Consumers Union, says she's concerned that students will simply ask older friends or romantic partners to co-sign for them. "Even for adults, it's hard to understand that a single mistake can stay on your credit for seven years," she says, noting that a low credit score can make it more expensive — or impossible — to get a loan. "They could sign away their futures."

As an alternative, parents can set up checking accounts for their kids, or get them a debit card that is tied to a pre-funded account. Once the young adult has demonstrated that he or she can be responsible with money, credit card talks can begin.

Then there is the argument that an 18-year-old needs a credit card to build up his or her credit history, in order to qualify for loans in the future. Consumer advocates say it's fine to wait until the consumer is 21, because it takes just six months to a year of credit card usage to build up enough history to develop a score. "There is plenty of time to do that," says Hillebrand. "It's better to have a thin credit record than a crushing debt load."


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