The new Credit Card Accountability, Responsibility and Disclosure Act, or Credit CARD Act, takes full effect Monday, with regulations aimed at helping consumers — and more specifically, young adults — understand and manage their credit.

The biggest change for students is that the new law requires consumers under the age of 21 to either prove their financial responsibility or have a co-signer in order to open a credit card account, according to a fact sheet distributed by the Iowa Attorney General’s Office.

Doug Borkowski, director of the Iowa State Financial Counseling Clinic, said he’s asked students in his HD FS 283 class about the change, and expected to hear complaints that the law doesn’t treat them like adults — but that most students seemed OK with the change.

“If there were dissenting views, nobody voiced them,” Borkowski said.

In addition, companies cannot offer free items to get students to sign up for a credit card.

Borkowski said such freebies are common today — one time he recalled seeing Post-it notes spread throughout campus offering a free sandwich at a local restaurant for anyone who filled out a credit card application.

“I pulled off over 200 and didn’t make a dent in the number that had been taped around campus,” he said. Borkowski said he once worked with a student who had signed up for a card in order to get a freebie, and then threw away the bills since he had never used the card.

“Well, the fine print on it was it had an annual fee that they charged up front,” Borkowski said.

By the time the student realized, he’d had several late fees and interest fees added to an annual fee for a card he didn’t really want in the first place.

Such annual fees may become more common, too. The new law restricts how companies can raise interest rates — for example, the interest rate on a new card cannot be raised in the first 12 months the account is open, according to the Iowa Attorney General’s fact sheet.

But with less revenue from interest, credit card companies have been exploring annual fees.

“So now they’re saying, ‘Well, how do I get revenue, how do I generate revenue from those who use credit wisely?’” Borkowski said.

Borkowski said one major company has tested an annual fee with 15 percent of its consumer base.

“I think they’re still trying to assess it. The discussion out there is that others will probably follow.” Borkowski said. “It’s going to be very interesting to see how it plays out.”

While new consumer protections can help, nothing replaces using your card responsibly.

Borkowski said he worked with a senior that had $57,000 of debt spread over five credit cards. That’s an extreme example, but illustrates a serious point.

“I’ve seen a fair number of students over the past five years that are over $10,000, certainly.”

To avoid that, stick to the basics — which haven’t changed.

“Pay your full balance on time,” Borkowski said.

According to a consumer advisory from the Iowa Attorney General’s Office, the biggest changes to expect from the new law include:

Consumers under the age of 21 must have a co-signer or must be able to prove financial responsibility in order to open an account.

Companies cannot offer free items for filling out an application.

Monthly statements must be sent 21 days before their due date and must include information on how much a customer needs to pay every month in order to pay down debt in three years.

Companies are restricted in how they can raise interest rates and must give 45 days notice of changes to your account.

Borkowski said that if students have questions, they should call the Financial Counseling Clinic for more information.