Serious Question...What do you guys think about credit cards for kids?

Question

I am considering getting a low level credit limit card for my soon to be college boy as a way of establishing credit for him as he continues in his own life.

I need opinions, pros and cons, etc... Any input is welcome.

Sandy :O)

Answer 1

Well, if he's going to college he's not exactly a kid, is he? ;-) But this is something you need to decide based on his current spending habits and level of responsibility. For example, does he complete assignments and other responsibilities on time? Can he be trusted to do things that he commits to? Because he'll need to pay off a credit card each month on time. Does he make smart buying choices or does he just buy indiscriminately? Credit cards aren't tied to an account, so he can purchase a lot without actually have the money for it.

A credit card would be a great way to start establishing credit before he needs to get loans and cars and things. But remember, college can be very tempting for spending.

Also, get the card in his name only. If he's going to make decisions, he's going to need to learn that mom can't bail him out, and you don't want any bad decisions to affect your credit.

Answer 2

I think you got really lucky with some good advice here. Some of these points have been covered but I'd like to put this in my own words and spell it out for you.

When you apply for a card, make sure you put your son on as a co-borrower and NOT an authroized user. Starting in september, authorized users no longer helps their credit.

Next, you need to have an educational discussion with your son that covers some of the following facts. Then the two of you need to make an agreement with each other that is good for as long as this credit card is open and has both of your names on it.

1. Never to apply for another credit card, loan or any other type of debt without discussing with you first.

2. He is expected to pull his credit once a semester and the two of your review it see if he's holding up to his end of the bargain. Legally, he doesn't have to, but as his legal guardian, you should demand this.

3. Show him how credit cards work. Show him how expensive they can be and how it doesn't make sense to buy things you can't payoff immediately.

Now, once the account is open, it's up to him to receive the statements and make the payments. You'll need to go online at least once a week to check on the account to make sure it's in good standing. Your credit can be affected negatively if he makes a mistake. If you see that a payment is due and hasnt' been received yet, it's in your best interest to make the payment, then immediately cancel the card and revoke your sons privelidges. Credit is no joke and is more important than ever.

All parents should have these discussions with their kids because they can ruin their credit early and never recover.

Answer 3

A lot of college kids get in major trouble with a credit card. If it's low limit, and you're willing to pay it off if he runs it up and can't pay, then it could be good.

To a college kid studying at 2 am, getting a pizza delivered can seem like a real necessity.

Answer 4

Laura Rowley recently wrote a pretty good article covering kids and finances. It can be found at the link below. The first link is about credit cards. The second about children and finances in general.

Answer 5

Have you ever seen a credit card that give you 0% financing on cash advances with no transaction fees? I have borrowed over $100,000 in the past two years and have just had to make minimum payments each month. I make sure and pay off the balance when it becomes due, usually in one year.

Answer 6

I think that he doesn't need you to get him a credit card. Believe me there will be people on campus with tee shirts trying to get him to apply.

I think you need to talk with him before he goes. One things that boys do with credit cards is taking girls out for expensive dates and buying girls all kinds of stuff. Then they dump them and they are left with debt they don't want to pay because it was wasted on some girl. I've seen this tons of times.

Encourage him paying it off every month and tell him that people will tell him it is stupid (his friends or girlfriends will tell him that). It is pretty much the norm. There is a huge college trap of getting kids in debt.

You don't need to get him one. He will get one himself. Just let him know that there will be a lot of pressure to get into debt in college and the habits are hard to break afterwords.

Answer 7

Is he mature enough NOT to abuse it?

Will he use it for convenience or for financing?

How will he pay for items purchased?

It can be good. My daughter is 23. Working on her master's degree. She has one of my credit cards for items I am responsible for. She has one in her name that she obtained at age 18 for items she is responsible for.

She has never used the card as anything other than convenience. She has always paid it in full and on time.

I checked her FICO score recently. It is 820. She has established a payment history that reflects that she is responsible with credit.

So, it can be good, if your child is mature enough to understand it. Otherwise, it can be abused and create credit and financial problems.

Answer 8

The con is it is going to become a pay now, undertaking later situation. the apparent professional is a responsible man or woman is development a line of credit for the destiny. however the deal is that's barely for small purchases that must be paid off interior the subsequent assertion.

Answer 9

Isn't there one where you pay in first and can only spend what is in credit|? Might make them more aware.

Answer 10

if your boy is going to college than he can get his own that is a good way to ruin your credit