Should College Students Have Credit Cards?
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 fastest growing untapped market. They’re not fully adults but not kids either. They represent millions of dollars in buying power. They qualify for loans to attend college and other financial aid.
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’ve 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.
A college student can be added to your own credit card. The card is issued to them with their own name but you keep track of what purchases are made. Start by setting some ground rules and see where it goes from there. If the student has been able to manage money before acquiring the card, they may be able to resist the temptation of using plastic.
Make sure you review the statements with them monthly. You can do this in person if they come home on weekends or maybe over the phone if they’re away attending school. Setting up payments helps to keep them accountable and they will need this guidance 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’re setting a “credit limit” for them. If they have the ability to 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.
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