Should College Students Have 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 fastest growing untapped market.  They are not fully adults but not children either.  They represent millions of dollars in buying power.  They qualify for loans to attend college and other financial aid. 

Credit card companies often make deals with colleges to distribute applications to their students in exchange for credit cards that carry the college logo or school name.  It’s too bad that those applications are not accompanied by some literature or a course in money management.  When the college students qualify for those high credit limits, they don’t account for the fact that they don’t have the income to repay their purchases.

The question is not whether college students should have credit cards but instead, who should give them one.  They will acquire one whether parents want them to or not.  To head off disaster, parents can be the one to supply the credit card for their college student.

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. 

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