<p>I'm interested in knowing the opinions of others regarding a) whether it's a good idea to get your S/D an 'emergency' credit card when they go off to college and b) which credit cards are the best for such purposes. I'm sure there are companies that cater to college kids. Thanks in advance for all the wisdom that will be shared!</p>
<p>when your child opens a checking/debit card account for college (like BofAmeica) the will offer a low maximum credit card as part of the package .I believe you could pick 250,500 etc as the starting credit limit.Its a good idea for a kid to learn how to handle some credit,and have a card just for certain times when they shouldnt debit..for example,S recently rented a storage unit for the summer near his University.He used credit rather than debit as a protective means.
Since he is about 900 miles from home,we have also linked S to our American Express (card in his own name on our account) only for major emergencies like an emergency airline ticket,emergency room expenses,etc.We did the same for D when she was an undergrad and was 3,000 miles away.</p>
<p>It's a great idea to get a student credit card. The ones affiliated with the student's checking account usually have no annual fees. Both my kids got BofAmerica Student credit cards 1 year before going off to college, so that they could get used to the drill of online bills, paying on time etc. before being on heir own.
Their cards have no annual fees, and have a $700 limit. They also use them for gas, movies etc., and with online Bill-pay it's soooo easy to transfer money in a flash from your BoA account to your BoA credit card account.</p>
<p>You need to know your kid. There are legions of stories regarding college students and mounting debt because of some of those free offers, tho a low credit limit could preclude major problems. I'm cheap enough that I would resent even a hundred dollars worth of pizza and movie rentals. My kids do get one for overseas trips in case of emergency, with me as co signer, so in case of loss, I can deal with the details. </p>
<p>But debit cards, on their checking accounts are another story, as they need to subtract amounts from a balance just as writing a check, so it keeps the brain engaged with spending. Access to a credit card number seems a necessity when living far from home.</p>
<p>Well, I guess that could be a concern if the student has not yet mastered allocation of resources, and that a credit card is not a free lunch. Also, if parents are the ones paying off the C.card bill, or replenishing the checking account, the kid could have a field day. My kids use their own hard-earned money to pay off the CC bill, so they are not so free spending.</p>
<p>Our D has had a credit card tied to one of our accounts since she turned 17, the age the company allowed it. She is allowed to use it for gas without letting us know. All other charges need to be pre approved by us. This is also how she will start the first year of college. Make sure you children are aware of the credit card companies that will be on campus the first week. They have freebies to entice kids to sign for a card. A few months later the reality of interest charges and minimum payments rear their ugly heads.</p>
<p>D, a senior at boarding sch, has had a credit card tied to my acct for several years. Despite concers re: her running up a bill, I felt it was essential for emergencies. </p>
<p>To my surprise, the real danger has been D charging for friends who don't fully repay her for their purchases. Friends have reported that this is increasingly a problem in college, where the kid /w the credit card frequently gets stuck w/ the bar bill.</p>
<p>Clark Howard's website is a great source for consumer info about credit cards, credit vs debit cards, etc.</p>
<p>When our D went to college at 17, we had a couple of goals for her re: money management. We wanted her to learn to use credit responsibly, begin to develop her own credit history, have ready access to cash so that she did need to carry any large amounts of cash, and have access to large amounts of cash in case of a catastrophic emergency (she is our oldest, and could conceiveably be responsible for her younger brother for a time during an emergency). A single typical student credit card won't cut it, particularly since her school is very rural, and she needs to buy things online, and had no winter clothes.</p>
<p>We sent her off with a debit card on her bank account to use for cash, a co-user on a credit card that we had had for many years, but didn't use, a no fee card with a $30,000 limit, and as soon as she turned 18, got her a carefully chosen student card with a $500 limit.
She uses the debit card for day to day expenses. We monitor the big credit card, because the only activity is hers, and she knows that it is only for online purchases and airline tickets. As soon as she got the student card, we encouraged her to use it for pizza and online purchases, and pay it off to build her credit. She is very frugal, and prefers to get small amounts of cash with the debit card and buy her pizza and other local purchases with cash.</p>
<p>D has the B of A credit card attached to HER checking acct. She uses it only if needed and pays it off each month. She also has a small checking and savings acct back home (Wells Fargo) that is attached to our accounts. If she has an emergency, and it is something we should pay for, I can easily transfer money into her Wells checking acct and she can write herself a check to either pay or pay her B of A credit card bill. She also left me deposit slips for B of A just in case. After one year at college, this has worked very easily and she has been fairly cautious and frugal.</p>
<p>One other thing. Since we agreed to pay for books, she uses her card for books and then sends me the amount. We reimburse her. </p>
<p>Just decided to get a Amex Jet Blue card and have her use that for books and airfare to and from Boston. That way, she earns points for travel too. She is not to use this card for anything else and knows it. We got ourselves Jet Blue cards under HER name (how about that for a switch), so if we have a big purchase to make, she will get the points and earn the flights. She already gets a voucher for her flight back to school in August.</p>
<p>S did not have a credit card and it was fine for him. He lived in a dorm, ate in the cafeteria, and didn't have a car so he just needed a little cash for extra snacks, entertainment, etc. I do think it is a good idea for students to establish their own credit history, and I did consider getting him a card, but decided against it for now. I think it would be a temptation for him to spend more. I do charge his tuition/room&board/books on MY card, and that's enough points for his plane ticket.</p>
<p>Both of our kids have B of A student accounts tied to their bank accounts, and it is very convenient for them.</p>
<p>DD has a Bof A credit card..the $500 limit is like some training wheels. She has always paid the bill on time (online) and has not had any real trouble. I wanted her to have the ability to buy (charge) an airline ticket to home in the event that something happened to me and I couldn't do that for her.</p>
<p>D has one with a low limit that is tied to her checking as overdraft protection. She also uses it to buy books and for unexpected expenses. It's paid off every month when we send her money.</p>
<p>The on-line banking allows a lot of "safety nets". The bill can be paid automatically on a set date; any deduction from the account over certain amount (that you set) can generate a notification e-mail, etc.</p>
<p>My parents got me a card freshman year with a $200 limit on it. I was allowed to charge my phone bill to it, which was to be paid off in full immediately. Even though it was only ever $40/month, paying it off like that every month over 4 years, I was able to build some strong credit for myself.</p>
<p>Good for you AdOfficer. nngmm.......those automatics don't teach kids to pay attention to due dates and balances. Overdraft protection is good to have and never have to use!</p>
<p>I have a HS sophomore who travels quite a bit. She has a credit card that is just an extra card on our account. She has always been very responsible with the card. I think giving it to them early helps teach them that it's not play money. I also question each and every purchase that she makes, just so she has to justify the purchase.</p>