Credit Cards for College Kids?

Looking for a credit card for your college student? Look beyond student credit card offers on campus, they may not be the best available for your student. There are important factors to consider when establishing a credit line. Be sure you know what you are signing them up for before you truly sign the dotted line.

Just about every college student establishes a credit line of some kind or another. Usually they use the cards to cover expenses that are left over after the loans and grants have been disbursed. In many cases this can be a welcome reprieve from needing to work more hours at a part-time or full-time job. 

There are other situations, though, where college students are establishing many different lines of credit through several student credit card offers from companies that come to their campus and running up their debts without really understanding the depth of what they are doing. Those cards give them a sense of freedom to go out and buy things without the feeling the reality of handing over cash for those luxuries. They wind up getting out of college with a mountain of student loans, and then personal credit card debts that they do not even remember building throughout school.

This can be avoided by the involvement of parents in their student’s finances. A single card for emergencies, car rentals, ticket purchases or books may be a necessary thing. Yet having the parents teach their student the concept of buying on credit is vital to avoiding disaster.

If it is put in those terms, students can begin to understand that the value they place on an item may not, in fact, be as high it will end up costing them. They may be charging the item on their card for the price they see on the shelf, but when it comes time to pay the credit card bill they will be paying up to 29% more for the item. This would mean that the meal they bought themselves and their girlfriend will cost them $20 in cash, or $25.80 on their credit card. The gas they fill their automobile with may cost them $2.99 at the pump if they pay in cash, but it will cost them $3.86 if they use their credit card. 

Compare several regular expenses with your student in a similar manner. Help them to see that there is a huge benefit to not accepting most student credit card offers. If they question needing to establish their credit rating, let them know there will be plenty of time to make that happen and plenty of needed items that will be put on a credit card to take care of that.