Checking and credit card logistics

[ParentOfIvyHope]

<p>

I really don’t anticipate co-signing on loans, and child number one will graduate without debt. My point was in response to having a credit history to buy something after graduation. If I need to co-sign for the first car becaseu DD didn’t have a credit card in college, I will.

</p>

<p>I just don’t get this thinking. We send our children to the colleges to get education but we don’t want to teach them practical financial knowledge. Having and managing credit cards are big part of modern life. </p>

<p>I only see benefit of responsible uses of CC during colleges. I don’t see any down side to it while co-signing on children cars/apartment and other have all the pit falls possible.</p>

[ParentOfIvyHope]

<p>

Some of those kids have credit cards that their parents don’t know about. Those kids may have good credit (minimum payments at 23% interest), but they are graduating with large credit card bills on top of their student loans. I didn’t want D1 to get into that habit (why have credit before having a real job), so we insisted on her not having any credit card before graduation.

</p>

<p>Most of the credit cards that children get during colleges have lower limit. The task is to teach them practical finance. Isn’t it more wise to teach with lower limit CC as a student when they have limited means to pay back. They will learn it fast when the CC balance doesn’t go down with time.</p>

<p>Anyone who is prone to abuse CC during college will do it after college too. Having a card not necessarily mean abusing its use to.</p>

<p>I would prefer DD to buy a dress for a formal during the semester and earn it over the summer if she can manage her CC minimum payment because that is what she will be doing when buying her first car, her first house etc. That is what CC is for.</p>

[oldfort]

<p>I feel there is a big maturity factor between age 18 vs 21 or 22. D1 is a woman now, instead of a girl when she entered college 4 years ago. I know a lot of parents are dealing with their kids’ reckless spending and drinking.</p>

<p>A young man I know, who has always been very responsible, just blew 1500 one night over the winter break in NYC. He told his mother that the only way of getting into a bar was to get bottle service, and that’s what his friends in college wanted to do. His mother asked me if that was the case, and if she would be hindering her son’s college experience if she were to take his credit card away. I am wondering if this young man, at age 22 on his own, would be so quick in spending 1500 in one night. </p>

<p>D1 has a lot of friends o FA, who have more gadgets than she does, or go on annual spring break vacations, and many of them do it by charging it on their credit cards. </p>

<p>I do agree that college is a good time to teach them about finance. The way I am teaching my kids is - don’t get credit until there is a source of income. D1 is going on her first spring vacation as a senior. She is paying it out of her summer internship money. She had big plan of going back to Australia and Singapore after graduation, but the airfare alone would be 5k. Even though she is getting a sign on bonus, she needs it for rental deposit and furnishing for her apartment. She made a decision to wait on the trip instead of putting it on a credit card. I am not sure if D1 would have made the same decision 4 years ago under the same situation.</p>

[nngmm]

<p>Oldfort,
If your daughter got a credit card as a student, she would have a $300 credit limit on it ( maybe $500 if she was lucky). So a $5,000 “mistake” would not be an option…</p>

[oldfort]

<p>D1 wouldn’t have put 5k on a credit card, but she could have put her apartment furnishing on credit if she had used up her sign on bonus on a big trip. She preferred to have cash on hand to buy what’s necessary for her new place.</p>

[mathmom]

<p>The biggest problem with the student credit cards is that with such a low limit they can’t always make some of the purchases they need to. My son had an internship in CA last summer and buying the tickets, renting an apartment, getting internet access and renting furniture was impossible to do on his card even though he had plenty of money in the bank.</p>

[vicariousparent]

<p>The length of credit history, and the duration that the oldest credit account has been open, are factors that go into determining your credit score. </p>

<p>An 18 year old who opens a credit card account (and keeps it in good standing) will have a better score and be in a better position to buy a car or a house at age 28, than if he/she first got a card at age 21.</p>

[ParentOfIvyHope]

<p>

A young man I know, who has always been very responsible, just blew 1500 one night over the winter break in NYC. He told his mother that the only way of getting into a bar was to get bottle service, and that’s what his friends in college wanted to do. His mother asked me if that was the case, and if she would be hindering her son’s college experience if she were to take his credit card away. I am wondering if this young man, at age 22 on his own, would be so quick in spending 1500 in one night.

</p>

<p>I think he learned a lesson here, he might be wise with all expenditure in future.
Why the Mom even care about it. If the CC is on the student name, mom should not even look at the statement. You need to let them handle this unless they come to you in case of a problem.</p>

<p>I see the college as a real life learning experience and always wanted DD to live in a dorm during the college so that she can learn about real life finances.
I don’t have access to her CC account and don’t even ask to see her statements. She has a decent limit as a student but still it’s for her to manage.</p>

[ParentOfIvyHope]

<p>

She had big plan of going back to Australia and Singapore after graduation, but the airfare alone would be 5k.

</p>

<p>On a side note, she can use Quantas for advance booking (more than 3 weeks) and can get the tickets as low as $1500 (covering both Singapore and Australia) from USA.</p>