Teach Your Children How To Handle Credit Cards

Taking credit card help without planning and knowledge can be a two-edged sword. If you are planning to apply for credit card help, you need to know what it's all about before you set out on your voyage. It's important because there are a lot of instances where people have become victims of credit card debts after they got credit cards. Have you ever thought why this is so?

Credit cards generally carry very high interest rates. If you have a number of credit cards and you use them frequently but never pay your bills, you might be in trouble. The worst thing with credit cards is that they always lure a person for impulsive buying. "Use our credit cards, and get 25% discount on the popular apparel brands" is now a common offer from all the companies. But do you know about the real catch? If not, ask someone before you apply for credit card help. 

If your kids apply for credit card help at one of the countless campus table promotions, they would not only take home a free T-shirt or coffee mug, but a credit line they may not be able to afford, and may not know how to manage. So, it's up to you to provide them the real mantra of how to use a credit card. Tell them frankly about the negative points of using a credit card. Of course, it's may be a real hard thing for your kids to swallow, but sometimes harsh realities can do a favor than getting buried into a huge debt. 

But you can't neglect the benefits of getting credit card help straightaway. If you or your kids use a credit card wisely, it would allow you people to build a credit history. Once college is over, entering the real world without a credit profile can make life extremely difficult. The potential downside, of course, is that if used irresponsibly, a student may accumulate large amounts of credit card debt. In addition, failure to make payments in a timely manner would damage the student's fledgling credit profile.

Evaluate the pros and cons of credit card help and choose the credit card according to your child's needs and his or her ability to manage personal finances. However, be aware that credit cards are very easy for college students to obtain, even without parental approval. Credit card issuers see college campuses as lucrative environments to find new customers, thousands of students who constantly need to spend money on books, supplies, and food, yet who are always short of cash. 

Talk with your child about the responsible use of credit, and if you decide that credit card help is appropriate, encourage him or her to start slowly--get one credit card with a low credit limit. One or two low-limit credit cards would be more than enough to establish a credit history. Do not forget to teach your child about the benefits and pitfalls of taking credit card help. Explain how to accurately compare credit card offers, how to read the fine print, and how to act responsibly when it comes to debt management. 

If credit card help is on your mind, decide whether you or your child would be responsible for making the monthly payments, and make sure he or she understands it. If you would cover some credit card expenditures and the child would cover others, make sure he or she is aware of who would pay for what. In addition, explain to your child which expenditures are acceptable for the credit card and which are not. For example, you would allow your child to use the credit card for tuition and books but not for ordering pizza and coke, make sure this is clear.

In fine, if the child is seeking credit card help, parents need to tell him or her that credit card rates are generally much higher than student loan rates. So, if your child is not planning to pay off the balance right away, taking out a student loan is probably a better idea.