Should I Give My College Kid a Credit Card?


It seems like only yesterday that you put your child on the bus for kindergarten, and now they’re headed off to college.

In the midst of the sentiment that you are surely feeling during this time, there’s a lot to think about to prepare your college student for the next four years. One of the things you are probably thinking about is whether or not you should get them a credit card.

On one hand, giving your child a credit card seems like a good idea. It will offer both them – and you – peace of mind knowing that there are means available to pay for their needs. On the other hand, you realize that there is the potential for a financial disaster, as some college kids may not fully understand the plights that can come along with that piece of plastic.

If you’re having trouble deciding whether or not you should supply your college student with a credit card, read on for some helpful advice.

Talk About Credit

Your child probably already knows the value of working hard to get good grades. They likely understand the value of a dollar and even a thing or two about saving money. However, your child may not fully grasp the concept of credit. Before handing over a credit card, make sure you sit down and have a very open and real conversation about how credit works. Fully explain that when a credit card is swiped, the money that was charged to that account needs to be paid back. Talk about the pros (building credit) and cons (debt) of using a credit card. You might also want to share any blunders that you may have encountered when you got your first credit card, so they don’t make the same mistakes you did.

Credit Card Alternatives

One thing to keep in mind is that if your child is under 21 and they do not have proof of employment, parents are responsible for co-signing on a credit card. If a child defaults on their credit card, that means that parents are left to pay the bill. Instead of a traditional credit card, it is highly recommended to opt for a pre-paid credit card or debit card. They work just like a traditional credit card, but without the interest and late fees that can cause a financial disaster that may be difficult to recover from.

Both debit and pre-paid cards are still an excellent way to teach your child about budgeting and to reinforce healthy spending habits. If your ultimate decision is to give your child a credit card, you should research all of the options and choose one that is right for your college student. There are some credit cards out there that have benefits that are designed specifically for college students. Look for a credit card with a low credit limit, no annual fees as well as cash-back rewards. Some cards even give incentives for good grades.

Encourage Good Spending Habits

While you might not be able to protect your child from every financial mistake, you can certainly encourage them to make good decisions. Discuss how important it is to really consider whether or not a purchase is necessary before swiping any card whether it be a debit card or traditional charge card. If you do decide to give your child a conventional credit card, talk about how paying the balance in full and making payments on time will help not only their credit score but also high-interest charges and late fees.

If they’re doing a good job managing their credit card habits, make sure to congratulate them. Mistakes happen if your child slips up and forgets to make a payment or their balance gets too high, be direct and patient with them. Ask them how the mistake happened, what they learned from it, and if there is any way that you can help (create a budget together, or set up auto payments, for example.)

Supporting your college student’s first experience with credit will make their experience a positive one, and help further set them up for financial success.

For more tips on credit cards for college students, get in touch with Tayne Law Group, P.C. Our debt relief lawyers can help better prepare you and your child for a brighter financial future.

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