Some Advantages Of College Students Having Credit Cards

It was scary enough to think of them driving a car at sixteen. Now they are heading off to college. Most parents are not worried about their teenagers getting their hands on a credit card the plastic of choice for college students. But should they have credit cards in the first place?

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 may not realize the importance of a good credit score, but their parents do. In an attempt to keep their credit good, help them ease into the world of plastic by providing a proving ground of your own making to test their mettle.