Getting Credit Cards For Students – Parents, Be Involved!
Being parents is already a hard enough job in itself – raising kids, making sure that there is always food on the table and in the refrigerator, making sure they get good grades, saving money for college, and all of that. Aside from these tedious tasks, as a parent, you also need to be involved in your child’s financial growth and stability. Your kid, even if he is already at the university, will always be your responsibility whether you like it or not.
This is the reason why there are more and more parents looking into the possibility of getting their sons and/or daughters credit cards. Carrying and using credit cards seem to be a safer and more convenient way of spending, without the risk of losing money to pickpockets- or unwise spending. Also, this means that the children are more aware of what to spend on since everything that they buy will reflect on the card and will be seen by the parents.
As a parent, you can choose which card your children should get or you can subtly suggest which they should apply for
1. The debit or prepaid cards, although two separate types of cards, have some things in common. These two cards are usually used for allowances if the child is still getting money from your pockets. You can also have your children less than 18 years of age into this program, requesting that they be issued with an extension card from your own. The good thing about these two cards is they are not debts, since they pull out the money from a savings or checking account, or you have the card reloaded with some amount in particular. There is risk in getting these cards though, when you do not do enough research into it. Some of these cards have negligible charges associated with transfer of money into the cards or the savings or checking account. Meanwhile, some credit card companies that do not specialize in these types of cards will definitely charge exorbitant fees.
2. The secured credit cards have somewhat the same features as the previous two types of credit cards described. However, these types of cards will help your child establish his own credit standing. This is because the providers of the cards report the status of repayment to the credit bureaus. Secured credit cards require you to deposit the amount of credit limit into the bank or the issuer and then they charge you interest for using the card. It is not one of the brighter ideas of the finance industry, but if you are a parent who wants to make sure that your child stays within a certain budget while building his credit history, this card could be suitable. Alternatively, you can get a prepaid or debit card and a secured credit card. Just do not make your child use the secured credit card. Use it once for it to get reported to the credit bureau, then lock it away.
With your kids, you will always have to be careful to tell guide them on how to handle finances. When they are truly ready to manage their own money, they will be very appreciative of what you have taught.
Tags: Student credit card