Need A College Student Credit Card – Read On

How to Get A College Student Credit Card – Learn How to Use Credit Cards

Get a college student credit cardPinAll too often, as most teens enter college, they are bombarded with offers for a college student credit card. More often than not, they haven’t received any type of guidance on how to use credit cards, and for some, the temptation can be overwhelming.

This is especially true for those college students that attend a college or university away from their home town. For many, this is their first experience at “leaving the nest”, and besides being homesick, they realize that they are on their own and must begin to make decisions that parents used to make for them.

One of the first items on the agenda, is to open a checking account if that wasn’t done prior to leaving home. Many experts in the financial field recommend that a checking account be established in the student’s junior or senior year of high school so that you’ll have some time to guide them in proper handling.

Proper use of a college student credit card is one matter where the student must be trained, and under the watchful eye of the parent. To do that, it may be a good idea to give the student a card in his/her senior year of high school, and in that way, you’ll be available to offer advice and other assistance.

Teaching the student how to use credit cards is not a one time lesson or lecture. There is a learning curve that comes from experience and they need to understand how to use the card responsibly.

They need to be shown what high interest rate credit cards can do to a budget. Explain to them how individuals get into serious financial problems with credit cards by purchasing unnecessary items without sufficient income to repay the debt.

If possible, show the student what happens when only the interest, or some small minimum payment only is paid each month. I call this an evergreen account because the principal balance never changes.

One way to train a student how to use credit cards is to set them up with a secured card for a few hundred dollars. In that way, they can use the card, but the liability is fixed at the amount of the cash securing the card. This may also teach the student how to establish credit in their own name in the future.

Using the secured card while they are in high school will give the parent an opportunity to observe their behavior and ability to handle the card. If the results are satisfactory, then the parent can move the student up to a regular card with a little higher limit. Also encourage the student to repay the entire balance each month to avoid wasting money on interest charges that are not tax deductible.

There are many different types of offers that students will be tempted with, and one gimmick that appliance and furniture dealers push are “same as cash” purchases. They allow the credit card holder to purchase appliances or furniture interest free as long as the entire balance is paid off in 6 months. Many financial planners advise against these types of purchases as they can backfire when a card holder purchases more than they can repay. Then the day of reckoning comes and new problems begin.

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9 responses to “Need A College Student Credit Card – Read On”

  1. Avatar of Hanna Hanna says:

    My son will be a sophomore in HS this year, and I am thinking about setting up a checking account for him. He is very responsible, and this would be great practice for college, as you said in the post.

  2. Avatar of Valerie Krzmenski Valerie Krzmenski says:

    It’s a shame how our college students are targeted by credit card companies. I understand that’s part of the real world, but the temptation couldn’t be issued at a worse time than college!

  3. Avatar of Janelle Janelle says:

    I’ll be a senior this year. I’m so glad I can point my parents to this post. Hopefully they’ll see it’s in my best interest to give me a credit card lol! 😉

  4. Avatar of Donald Quixote Donald Quixote says:

    Money management as a college student is probably one of the most important things, understanding a credit card is a good first step.

  5. Avatar of Donald Quixote Donald Quixote says:

    Credit cards are very important when it comes to building your credit, they are an amazing tool. The cards can also be a huge problem causing debt beyond handling. The hardest part is looking at your kid and deciding if they are responsible enough to handle it.

  6. Avatar of Jason Harrison Jason Harrison says:

    Hi Gust,
    the information in this article is very important, in both a teenagers and a parents life. Preparing your child for the real world is definitely the most important part of growing up. If I could add one thing, it would be teaching your kid how to apply for a loan. This is a very important thing that teenagers and young adults will use, some more often than others.
    Best regards,
    Jason Harrison

    • Avatar of Gust Lenglet Gust Lenglet says:

      Thanks for the input Jason. I agree, applying for any type of loan is very important. This will be done in a future post.

  7. Avatar of Denice Denice says:

    Thanks for this wise advice. In a family, when someone is heading off to college, it’s time for them to manage their own financial obligations. But It’s always important for parents to still give them proper financial guidance before trusting them with credit cards, because misguiding them might develop bad money habits in college — and end up paying a big price for years to come. It’s important that they develop solid credit card habits until they graduate, because this will teach them how to handle money wisely when they have their own family.

  8. Avatar of Spencer Spencer says:

    So many people will go to college and end up really screwing up financially because they’ve had no experience whatsoever with spending their own money. They are so used to having their parents telling them what they can and can’t buy, and when they get to college they end up screwing themselves over. Thanks for posting this.

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