Does Your High School / College Student Need A Credit Card?
In an age where everything is enticing us to buy, whether we can afford it or not, do we really want teenage students sporting credit cards? No doubt that spending is out of control, and more people than ever before have access to credit, but is it needed and/or deserved is the question. Just like everyone having cell phones there are positives and negatives, but with a little thinking ahead, Credit Cards have a place. If your college student is heading out of town, it certainly seems that a credit card is handy for emergency situations. This is where the importance of talking about when it is appropriate to swipe the card, or pass it by if something is not in the budget. There is a Huge difference between wants and needs, and if your student can identify the difference, the less likely you will have problems with overspending. One of the nice features, is that you can sit down with the teen and discuss the monthly statements, and be able to see where the spending is coming from.
Maybe you set up a budget that allows for Gas / Car Maintenance / School Expenses, etc… If these are the only expenditures on the statement, then the teen is probably to be trusted to make smart spending decisions. If not, then it may be time to rethink the credit card issue with you student. Like everything, some get it from the start, some catch on eventually, and some just never learn. That is a case by case assessment. Another Great Feature to look for when applying for a Student Credit Card, is to see what reward programs are available.
Some offer: points for every dollar spent / A percentage back for popular purchases – in some cases up to 5% / Free and/or discounted tickets for certain entertainment venues / No Annual fees / 0$ fraud liability… And the list goes on. Doing some homework here can really payoff, and it’s a great way to help your child begin to positively build their credit score. In Conclusion: You will want to sit down together and set boundaries and budgets for the proper use of credit cards in all situations. Some can handle the responsibility, some cannot, and you will have to treat each child accordingly.
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