Reprinted Articles

It was enough when they learned to drive at sixteen. Now they’re going off to college. Most parents aren’t really worried about their children getting a credit card although plastic is preferred by students. The question is, do they really need a credit card?

It never fails. If you advice your child against something, they will want to do it even more. That goes for credit cards, too.

College students are the newest untapped market. While they aren’t children any more, they’re not adults either. Since they can qualify for loans for school and financial aid, they actually represent millions if buying dollars.

Applications are often given out at a college in exchange for putting the college logo or name on the card. It’s a shame that there aren’t instruction pamphlets given at the same time or a course on how to manage money. College students seldom remember that they have no income to repay those loans with their high credit limits and rates.

The question shouldn’t be if the college student should have a credit card but who should give them one. Most times they will get one even if the parents don’t want them to. To avoid some of problems, the parent can supply the student with a card.

You can add your college student to your own credit card account. You can have a card issued to them in their name but where you can see what they purchase on the account. Set some ground rules and see what becomes of the situation. If good money management has been a part of their life up until then, the student will have a fighting chance of resisting the temptations of plastic.

Go over the statements once a month with them. This can be done over the phone if they attend school far away, or in person if they can make it home for a weekend. Keeping in touch and setting up payments adds accountability to the equation. With a credit card, they will need that from you.

Another option is to open a bank account and get a debit card. Your college student can use the debit card like a Visa or MasterCard. By adding a certain amount of money to the account each month, you are setting a “credit limit” for them. If they can manage the money in this account over a period of time, they could prove themselves ready for a credit card.

College students probably don’t even know what a credit score is but it’s certain that their parents do. Ease them into the world of plastic by letting them prove themselves and keeping their credit sound.

Last 5 posts by William Blake

• How To Reduce Your Credit Card Debt Without Debt Reduction Services - August 19th, 2008
• Bankruptcy Doesn't Have to Be the End - August 15th, 2008
• Being Frugal Now Can Mean Future Security - August 15th, 2008
• The Hidden Dangers Of Debit Cards - August 14th, 2008
• Credit Unions Versus Banks - August 14th, 2008

Tags: Finance