@college67 and @Parent1337 - I was just looking at the Capital One Journey card the other night. I noticed that on the application it asks for the student’s income. If you don’t mind my asking, how did you (or your kids) answer this? Did they have part time income that they reported or did you fill in an amount that you support them with?
My son has summer job income and a small investment account.
Between our 3 kids, they’ve had credit cards from 2 different banks and all have been allowed to use scholarship money as income to qualify for their card. We have their cards set up to Autopay each cycle from their own checking accounts, and we monitor what they purchase to make sure they’re being responsible. No issues at all so far. :-bd
Virtually any credit card deal offered to students through the mail, as well as virtually any that might be offered during O week at college, are bad deals. Any credit card that has a low limit is also likely to be very costly when the student runs up charges or makes cash withdrawals beyond that limit. My daughter found that a 30 cent overdraft could cost $20 in penalty fees; the company should have blocked the transaction in the first place but did not because penalties were so good for the company.
The best approach by far is for the student to get a credit card from the parents’ bank or credit card company, before departing for college. After a couple of weeks of bad experience with the bank at school, our daughter obtained one from our credit union. This had the added virtue of making it very easy for us to transfer funds to her other accounts as well as the Visa account.
It’s not the credit card’s fault that the user goes over the limit. The card company is obviously going to have penalties that are greater than normal and limits lower than normal for a card they give to a college student. That’s just good business sense. It’s up to the student to use it responsibly. I would still highly recommend the Journey card for 18 year olds trying to build their own credit. My other child will be applying on their 18th birthday.
@Otterma my son has a part time job so we put that down for income.
@Parent1337 I agree the Journey card is great. Same here. As soon as my daughter turns 18 she will get one also. Great way to build credit.
@parent1337 It’s very difficult to monitor the limits imposed in real time. The penalties are often excessive and come without warning. My advice is based on my experience and very responsible kids. It was much better for them to take a credit card from my bank (credit union) than anything offered at the college.
On reason to pay before the due date is to keep the credit used to below 30% If the credit limit is $1000, once you charge $300 you should make a payment if you want to keep the ratio below 30%. You never know what date the credit reports are issued, so you want to always be below that 30% ratio on any one card, and all cards together.
@calmom was this 1st Financial? They seem to purchase lists of graduating seniors. There’s a thread about them here from 2005 that has recent posts. They charge $9 to pay online! The fees add up quickly. I’m getting my son a USAA card.
Our college student has his own cc through our bank, along with a checking and savings accounts, limit is $1200 and they won’t increase it. So a few months ago he also got his own Discover card, and they’ve already increased the limit to around $2k. Both paid in full by him monthly, a day or 2 before due. According to the discover statement, he has a very good FICO score already.
@OspreyCV22 - yes, 1st Financial.
I don’t mind the concept of credit cards for college students. Both of my sons are aware that they should be paid off every month. I mind that the company in questions attempted to make 30.15 percent interest sound reasonable and affordable.