Senate Rejects Credit Card Limits on Youths

The Senate voted down two efforts by Democrats to restrict credit cards for minors as legislation to make it harder for people to erase debts in Bankruptcy Court drew closer to passage. Senators voted, 55-42, against a proposal that would have imposed a $2,500 limit on credit cards issued to people younger than 21 unless a parent co-signed the account or the minor could demonstrate sufficient income for a higher credit limit. Several hours later, the Senate rejected, 58-41, a provision that would have required a minor seeking a credit card either to obtain a parent’s co-signature, show adequate income or agree to take a credit counseling course. The amendments, proposed respectively by Sens. Dianne Feinstein (D-Calif.) and Christopher Dodd (D-Conn.), responded to growing unease about widespread marketing of credit cards to young people, especially college students, who often have no income or credit record. Sen. Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee, argued that the proposed restrictions would deprive minors, who are legally able to drive and to sign contracts, of another important right. A Senate vote is expected today to choke off debate and set a final vote on the measure, the most sweeping overhaul of bankruptcy laws in 20 years.