Credit card companies have been abusing their cardholders for years, encouraging them in bad credit habits and recouping tons of money in fees. In an attempt to curb these practices, President Obama recently passed the Credit Card Accountability, Responsibility, and Disclosure Act (also called the Credit CARD Act, because legislators can be clever too).

The credit card companies aren’t the only ones to blame, though. They got away with their tricky little ways for years largely because the general public didn’t know enough about the way their credit cards worked to keep those abuses from happening. So we’re going to go through the major components of the Credit CARD Act for you, to sort out what exactly is going on with your credit cards right now.

College Students Aren’t Pressured

Well, that’s not true. They’re still pressured to do lots of things, like stay up drinking all night instead of reading Kierkegaard. But when it comes to those ever-so-tempting credit cards with no limit and 0% APR for the first six months, just when they were wishing they had the cash to buy that gorgeous dress they saw on sale . . . yeah, that’s going to be a lot more difficult than it once was.

Credit used to be like smoking: hook ‘em early, have a loyal customer for life. In both instances, the industry relied on the addiction factor. Once you’re in, you’re in. If you rack up $20,000 worth of credit card debt by the time you finish college, odds are you’ll never stop paying it off, and you’ll never develop good credit habits. That’s a high price to pay for having once been 18 and a little too eager to believe in free money.

The new Credit CARD Act now requires credit companies to only allow credit card holders who have one of two things: an adequate income, or a co-signer.

An adequate income is hard to come by as a college student, so most college age kids will be looking to Mom or Dad for help getting a credit card, which eliminates a lot of what made credit cards so appealing in the first place – the ability to spend money on things without parental approval. Since Mom and Dad’s credit is now at stake, they’ll probably be monitoring the spending pretty darn closely, which means that huge credit debts before you’ve managed to get out of freshman English are pretty unlikely.

We think the income restriction is a smart one, too. Some college age students are pretty independent and mature. If they’re working their own way through college and making a good income, a little credit can come in very handy, so long as they use it responsibly. The sort of kid who decides to hold down a full-time job and go to school is a lot less likely to be the sort of kid who doesn’t understand the repercussions of the real world. That kid already lives in the real world. Good for him. Give him an AmEx and he’ll pay off the balance every month.

He’ll probably be ruling the world in a few years, too, but hey. He earned it.

Credit habits are learned early. 82% of college students carry a balance every month, and the average balance was $3,173 – that’s a big chunk of change for a demographic that often doesn’t earn an income beyond a shift at a coffeeshop. These new restrictions will probably put the kibosh on a lot of the bad spending habits college kids learn with credit early on.

Hopefully, their parents have better habits. As co-signers, it would be nice to see them take an interest in what kinds of credit choices their kids are making and helping them build good credit habits for the future. It’d be sweet, really. We’re betting Hallmark has a card for that.

“Just a note to say . . . I’m proud of the way you negotiated a lower APR.”

Awwwwwww.