<p>As I prepare for my kids to go away ...
Our intent is to give them $x in spending money a month, to be used towards the usual incidentals, pizza with friends, etc. (I'm not interested in a discussion of the merits of an allowance or how much. This part is a done deal.) Each of their colleges has an ATM for a major bank at the student center, so presumably I would start an account there and deposit $x each month, that they can get cash from as desired. I'd probably add in some cushion in case of emergency. </p>
<p>But we also plan on paying for books, apart from spending money. And I'd like them to establish their own credit. Plus i think its good to have a cc for emergencies or times when you don't want to deplete your cash. So ... Do they apply for credit cards, cosigned with me, and then I pay the bill but they establish the credit? Would the limits they could get be sufficient for book purchases? (How much can I expect books to cost a year?)</p>
<p>What other ways have you all gone about this? Thanks.</p>
<p>You can give him an additional card under your own account (usually free, and has his name on it), to be used for books and other things for which you will be paying. He should also apply for a card on his own, not cosigned, to establish his own credit. Make him fully understand the ramifications of carrying balances and paying on time. He should use this card very sparingly. For cash, open a joint account at the bank on campus. Make online transfers from your own account into the campus account. Son can access by ATM or debit card (or check if you want).</p>
<p>Our Freshman son continues to use his debit card established in high school. We push funds as needed (monthly allowance, books, other per request). This keeps us in the loop about what is going on 2000 miles away. For example, we happily “pushed”/transferred and extra $15 into his debit account when he had opportunity to see the Boston Symphony (an Honor student outing).</p>
<p>I recognize there will be a need for establishing credit before he graduates. We are considering a JetBlue credit card since we’ve found his best flights on JB. I’d be interested to hear other recommendations for a good student credit card.</p>
<p>With all of the new credit card laws that recently went into effect - I’m not sure that a teenager - who is a full-time student - can get a credit card on their own anymore without a co-signor. In any case, I went to a company where I have a credit card and got a second card for my son - it is under my account. I like this because I see what he is spending and I pay the bill. </p>
<p>Many colleges also have a debit card which parents can load money onto electronically which is good on campus - bookstore, etc. This card typically is used to get into the dorm, swiped for meals and vending machines, etc. - so it handles many purposes. Between this debit card and the shared credit card - he has done just fine.</p>
<ul>
<li>Establish a bank account in the kid’s own name. They probably already have this. You’re probably a co-signer.</li>
<li>Get at least a debit card for the account.</li>
<li>Try to get a CC at the same bank or credit union (we use the latter - way better than a traditional bank). You’ll likely have to be a co-signer as well but it depends on the CC.</li>
<li>Make sure the campus has an ATM that allows withdrawals on that network for free or at least an acceptable fee. Credit unions typically don’t have an ATM fee at other credit union ATMs that are part of the network.</li>
<li>The kid can use the CC to buy books, college travel, restaurants, or anything else. Have the kid inform you of the purchases and for the ones you’ve decided to reimburse (hopefully according to criteria you both established beforehand), you can just deposit that amount into the account. It’s convenient if the CU/bank is local for you - probably more so than convenient at the college other than the ATM since it’s likely you who’ll be doing most of the interaction with it - transferring money to the account, etc.</li>
<li>Make sure the kid understands how important it is to pay the entire balance every month (which they can do online) so as not to incur any charges. It’s a good learning tool to be responsible with money - especially if they get burned once or twice by paying only the minimum payment or forgetting to make any payment and having to pay extra for the priviledge.</li>
<li>You’ll need to kep a good eye on the charges to make sure you’re not paying for more than you agreed to so you’ll need to establish a way for the kid to inform you of the specific charges in a timely manner.</li>
<li>On the checking - if the kid’s living on-campus they probably don’t need a checking account. They might only need one once they move off-campus to pay for rent. Most bills can be paid online.</li>
<li>Be prepared for severe sticker shock on books - even used ones!</li>
</ul>
<p>PG, a lot will depend on the policy of the bank where the accounts are opened. Some will issue “student” credit cards when you open a checking and savings and do all online banking…but the credit limit is usually low $500 is what both of my kids had. As noted by others, banking regulations have changed a lot particularly in terms of giving credit cards to folks without incomes to support them. </p>
<p>I would suggest you contact the banks where you are considering opening the accounts and inquire.</p>
<p>I would NOT allow my kid to do all purchasing with a debit card, particularly for expensive items. The reality is the protections for debit card purchases just are not there as they are for credit cards. We recently had an instance of credit card fraud with one of our kids…if the purchases racked up had been with a debit card, she would have been out HUNDREDS of dollars…poof just taken out of her account. We were able to cancel the credit card and file a billing dispute form for the charges she didn’t make. Getting money back from a fraud debit transaction is very difficult to do.</p>
<p>Yes…our kids have debit/ATM cards but they do not use them like credit cards.</p>
<p>D1 has an account at our bank, and it is linked to our account. We have premier account, which then allow D1 to have the same status. When she traveled overseas she got a lot of benefits because of her premier account- free ATM usage, fee waiver. Nowadays everything is done electronically, D1’s pay from work is directly deposited to her account. We have a fancy credit card which could get us into most airline lounges for free, so we gave her a free card. It helps to have access to the lounge when there is a delay.</p>
<p>Just a not - D1 always asks before she puts anything on our card. Our deal with her was no credit card for her until she has a job.</p>
<p>S2 has the same debit card he used in h.s. (Wells Fargo). We have overdrawal protection on it which is very handy if they happen to overdraw by a few dollars. </p>
<p>He also has a credit card that is connected to our acct. It’s really our credit card with his name on it…therefore he is not building any kind of credit rating for himself by using it but he’s got time for that. He uses this credit card to pay for his books, buy gas for trips home and any emergency needs that the balance on his debit card won’t cover. For instance when he needed a new pair of shoes recently, I didn’t expect him to cover it out of his grocery money. I told him to buy the shoes and put it on the credit card.
He knows using it for pizza or any other entertainment kind of thing is strictly prohibited. </p>
<p>We have our online acct. set up to automatically transfer his grocery/gas (lives off campus) money to him on a regular schedule. So he always knows what to expect and we don’t have to worry about remembering if his money has been sent or not.</p>
<p>Absolutely don’t want a debit card for them – don’t like the lack of protection if stolen. I see no need and dislike the whole concept. </p>
<p>And I don’t want to get them an extra card on my account – they don’t need that kind of access to a credit limit and again would be a major hassle if lost / stolen.</p>
<p>Any recos for credit cards for college students? Couldn’t care less what the interest rate is, since it will be paid in full each month.</p>
<p>Hi pg! bankrate.com gives great info on good credit card deals for students, and your kids can get cards that pay THEM a small percent on their purchases [Student</a> Cards by Bankrate](<a href=“Credit Cards: Find the Right Offer For You & Apply Online - Bankrate”>Credit Cards: Find the Right Offer For You & Apply Online - Bankrate). I think the bank policies have changed a little bit re: credit for 18 yr olds b/c so many were racking up debt they couldnt pay. My s’s were able to get cards in their own name with their own credit, as I’d given them gas station credit cards in their jr yr of HS so they could get credit established in their name and pay for gas to/from school. They also had credit history with some earned income. I also gave them a card in their names on my account issued by upromise, which credits $$ back towards their college expenses. They use that card for books, transportation to/from school, etc. And since I dont use that card for much of anything else, if they screwed up and lost it (thank heavens hasn’t happened yet) I could close that account with minimal hassle to me.</p>
<p>As for banks, we have linked checking and savings accounts so I can transfer money to their accounts monthly and they can use as necessary. The checking acct one goes instantly (Wells Fargo/Wachovia) but the savings one takes a few days (ING Direct). If they need immediate $$ I can send through Wells Fargo/Wachovia, but I prefer, if not an emergency, (their monthly allowance, etc) to send through our linked ING accounts, as that goes into savings and earns a little bit of interest. They then pull it out as they need it, and the rest goes towards savings. We also have USAA accounts for them, and the ATM card from USAA has no fees attached to it, which helps since ther is no Wells Fargo/wachovia where younger s goes to college, so he gets hit with ATM fees if he uses the Wells Fargo ATM card to get cash. So there is a bit of “moving money from one bank to another” , but its a lot easier than it sounds. I move $ to ING, he moves to his USAA as needed. Would use Wells Fargo for emergency transfer if necessary. Thank heavens, so far not necessary. </p>
<p>Older s had Wachovia in his college town so we transferred bank to bank, and then he moved money to his ING savings. Hope this isnt too confusing. It all works-- pretty easily and effectively.</p>
<p>If you want to electronically transfer money to another bank, someone here on CC suggested to me last year to use PayPal. If bank accounts (rather than credit cards) are linked on both ends, there is no fee to use PayPal to transfer money. My bank would have charged me money to do an electronic transfer to a different bank. </p>
<p>I’ve been using PayPal to transfer money monthly during the fall semester, and it has worked fine.</p>
<p>My son has an account with B of A and uses debit card. B of A is everywhere, so I think this is a good choice. B of A also has automatic fraud protection (customer only loses at most $50 (?)). I would not worry about establishing credit. They will have plenty of credit. I receive several soliciting mails for my son from credit card companies and keep throwing into trash can.</p>
<p>“Absolutely don’t want a debit card for them – don’t like the lack of protection if stolen. I see no need and dislike the whole concept.” - That’s a valid concern. But the risk is limited t the amount of $ in the debit account, generally fairly low for a student. My kids keep the majority of their funds in Savings, just doing online transfer to to debit account as needed. </p>
<p>I have not hear cases of debit cards being stolen, but no doubt it happens. I have heard numerous stories about students misusing credit cards… consider keeping the max charge limit fairly low at first.</p>
<p>I’m not worried about the abuse of credit cards. My bigger question is actually – how much should I expect books to cost? (can they get a credit limit large enough to cover books, since I’m paying?)</p>
It’ll depend on the major and courses but my D (CS major) just said said books have cost > $500 in one purchase. That may have included physics though which I know was over $200 just for it! She did buy used whenever she could but it was still very expensive.</p>
<p>We did also use the college’s own debit/ID card (called the ‘Bruin Card’ at UCLA) which I could load up with money online from a CC and she could spend on campus at the bookstore, on-campus restaurants (Jamba Juice, Rubios, etc.), and even some places off but near the campus.</p>
<p>A lot of the books can be bought used and from on line booksellers. Some booksellers are even doing electronic textbooks, or book “rentals”. And the prices are quite reasonable. Try to avoid buying new if you can, and if you have to, your kids can buy them at the college store if necessary (espensive!!) and put them on their school account. Used boooks are also often available through the school stores, but my kids got the best deals on line or from students on campus reselling.</p>