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As I 've said, D1 was able to get her own apartment and get her own credit card after graduation without us co-signing for anything. What you are saying doesn’t hold true.</p>
<p>What we did for D1 was to have her open up an acct at our bank, and tie it to our accout(s). Because we were premier acct at our bank, D1 also enjoyed the same benefit as us - no fees for anything. If you have a “premier acct” due to high balance or other relationships with a bank, it would be worth it to have your kids bank at the same place so they could enjoy the same benefit. When your kid starts to get their own credit, they could also benefit from your good credit. It is better than to open another acct with a local no name bank around the college. We found it was the case with D1.</p>
<p>Both. The credit card is especially important to establish credit history. Debit cards are good because you can direct deposit and such.</p>
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<p>There are some contradictory statements above. From what you said above…your D1 actually DID have a credit card…albeit tied to your account. That’s the only real way to establish a credit history with banks/financial institutions good enough to not only get her own credit card right out of college…but one with a HIGHER LIMIT than yours. </p>
<p>In short, your D1’s situation…in the eyes of the banks/credit rating agencies…is the same as if she had a credit card for most/all of her undergrad years. Plus, she benefited from piggybacking off of your/your husband’s presumably excellent credit ratings…something not all parents have…especially in the recent recessionary climate. </p>
<p>I’m talking situations where the undergrad concerned had no credit cards under his/her name…and thus…no credit history after graduating from college. Such as the younger recent graduate friend who never had a credit card in his life…even when his bank and mother kept encouraging him to get one. </p>
<p>Also, keep in mind that many American kids don’t have parents with the excellent credit to piggyback off of…or have enough money to maintain a minimum balance to have a premiere account at most major banks.</p>
<p>Cobrat - No, D1 didn’t have a credit card in her name. We gave her an extra card for free. We were able to monitor her spend. Without a job, D1 wasn’t going to get her own credit card.</p>
<p>To keep in mind…(following cobrat’s style)…one doesn’t necessary need high balance to have a premier acct, a bank would consider ALL accts (mortgage, student loans, 401K, business loans) to grand premier status. It is all about how much fees they are generating from you.</p>
<p>I was fortunate enough to be placed on my mother’s credit card account several years ago when I was in my last year of high school. I ended up building enough credit via her account and my own I got a few years later through Navy Fed that I had a nearly 800 score across the board at a young age.</p>
<p>Credit card trumps, in my opinion, debit. It offers fraud protection, sometimes extended insurance depending on the card and item purchased, and, if treated like a debit, quite easy to manage a budget on. It also can have the benefit of a good rewards program at no additional cost depending on the bank or credit union (I have gotten several gas cards and Amazon gift cards over the years from my personal card). Some do charge, though, and those are not worth it.</p>
<p>In 2008, before the Amazon student free year, I signed up for the one month trial. Mixed up my days and canceled it a couple days late winding up with the $80 charge. Thankfully Amazon refunded the amount in full (they have a wonderful policy about this that is easy to deal with) and I had no worry about overdraft fees like another user mentioned their child faced because mine was tied to a credit card (and my minimum on my personal card was quite high besides the fact I purposefully kept the balance low for emergencies). It has also been very helpful at hotels as I have plenty of leeway for them to hold an amount. Friends who secure their rooms with debit often have found they do not have enough money for the weekend (poor planning that they did not realize the hold would happen).</p>
<p>Debit cards are great for those places that don’t take credit, though. While credit is always my go to (even groceries despite the lecture my mom and I have received from strangers for doing so… apparently we’re making unwise choices despite the fact she and I have never carried a balance month to month on our cards, we always pay in full), I use debit when I have to either because credit is not taken or I need cash.</p>
<p>My answer is: both. But the credit card must be treated like a debit as well. Only purchases that can be paid for right then with money in the bank can be made. There is nothing negative about building a good credit history and, although there are those who have experienced differently, it can only be beneficial or, at worst, neutral in the long run.</p>
<p>CC has fraud protection. We have joint accounts with our son and discuss payments and who covers what. He’s more of a sknflint than I am so it all works out fine. We’ve never carried a balance on any of our cards, and have taught our kids the same.</p>
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<p>That may be a problem for college students/parents who are unable/unwilling to take out such types/sufficient amount of loans for the bank to feel they’re benefiting from fees generated by them. </p>
<p>My parents weren’t in a financial position to take out such loans when I was a HS/college student and the only loan I’ve taken out at that point was in the three figures to cover a small portion of what wasn’t covered by my near-full ride scholarship because I wanted to free up some time for job searches and to enjoy my last year in college. </p>
<p>The younger friend is from a lower-middle class family who got enough FA/scholarships/family savings that he never needed to take out a loan to attend a local public university…especially considering he commuted from home. </p>
<p>In any event…in situations like ours…having a credit card is critical in building a good credit history sufficient to rent apartments/take out loans without having to rely on a co-signer…or resort to devices which IME…tends to send older well-off sheltered suburban relatives on edge.</p>
<p>It depends on the kids. Mine has an independent credit card that should be helpful when college starts in the fall, I hope. Own card, own money, own responsibility. And so far so good.</p>
<p>Mine have both. CC for purchases through our local credit union so that I can monitor and make deposits easily if necessary. Debit with one of the too-big-to-fail banks for cash from the machine because they’re both far from home so we need a bank with lots of locations. </p>
<p>I started both of them using CCs and debit as soon as our credit union allowed, 16 I think. That way I could teach them how everything worked while they were home under my supervision.</p>
<p>The parents here must be extra savvy, my kids tell me that most of their friends don’t have CCs and only use debit.</p>
<p>Like others have said you need a checkings account and a credit card if good for building credit. </p>
<p>Although some of you appear to be “over managing.” No way I’d ever let my parents look at my online bank statements. Ever since I got my first job in high school, that hasnt been any of their business. Although, being nosy, as all parents are, I’m sure they’d love to have access. lol.</p>
<p>But then again I’ve always been responsible with money (for the most part) and my parents don’t help me out with college expenses. </p>
<p>If a student blows a whole year’s worth of $$$ in 3 months, I guarantee you it’s not a “accident” and that student knows exactly what (s)he is doing. We’re smarter than you think.</p>
<p>Anyone who uses a debit card heavily should be ultra-aware of the ways in which they can be hacked. I’m seeing more and more stories about skimmers (fake card slots attached to ATMs, which can read off your card number) showing up, even on bank ATMs. Gas stations and third party ATMs (the type that you might find in a small convenience store) are notorious for this. Add in a small survellience camera and/or someone “shoulder surfing”, and then the crook has both your PIN and the ability to clone your debit card. Make sure your kids know to shield the keypad, and to give the card reader a good hard yank before putting in their card to make sure the reader’s firmly attached and the genuine article.</p>
<p>D1 has a debit card for cash, and a credit card tied to one of my accounts. We got her the CC a few years back when she was travelling alone, in the event of an emergency. There are so many transactions that take place online that it’s much simpler for her to have the card and then reimburse me.</p>
<p>I really don’t like debit cards – don’t feel at all secure to me, hate how a gas station or restaurant can put a huge hold on the account…for DAYS. We don’t use them, and didn’t want d to have to deal.</p>
<p>What she uses: 1. small checking account w/ATM (no debit) at the credit union in her school’s city. She receives a monthly “allowance,” anything leftover she’s been putting into the savings account at the same credit union. She’s written a few checks this year.
2. Paypal student card – this is a card that we load, can monitor online, and works like a credit card, except that if it’s not on the card, can’t be spent. No fees.<br>
3. A credit card on my account. We keep a small balance on #2, the credit card is for emergency car repairs, etc. and also to help her build credit. </p>
<p>She does a great job of keeping receipts, balancing her checkbook, letting us know when (and for what) she was using her cards, so there are no surprises when the bill arrives. </p>
<p>These systems work for us. The allowance money is hers (and I’ve been impressed by how much she chose to save!), the Paypal card was helpful for student health, the occasional online purchase, and the credit card is peace of mind for both of us.</p>
<p>Debit cards are more hassle when fraud strikes, since your money is missing from your account (possibly causing your checks to bounce), rather than the bank’s money being missing and showing up as additional lines on your credit card statement.</p>
<p>DS carries a CC on one of my accounts and he is the only one that uses that account. I even transferred the billing to his address so he gets and pays the statements. I am hoping that this gives him experience using a credit card even though it does not build credit history. He did apply for several MC/V cards in his own name at age 18-19 and was repeatedly turned down. He recently got a Discover card solicitation for a “student card” which he filled out and was turned down for “insufficient credit history” even though his credit score was >720. I’m surprised others on this thread had better success with their kids getting a card in their own name.</p>
<p>I also gave my kid a large sum of money to budget rather than transferring monthly amounts. My financial adviser encouraged that and says of the many parents he has counseled who have done that, only one kid blew through his money way too fast. Used books vs. new, super saver flights vs. last minute tickets, the choices are his knowing he can keep whatever he saves. I’m hoping this fosters some financial education.</p>
<p>Yale, I’ve had a credit card since I was 16. Got one at Cap One. It wasn’t hard to get one at the time (5 years ago, they’ve cracked down considerably since then). Now I’ve never been turned down for anything. At 21, I have four credit cards, an apartment, and a car loan solely in my name. Know that wouldn’t have happened if I hadn’t had a mom that pushed me to establish credit very young instead of waiting til the crackdown.</p>
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<p>I agree with oldfort. My kids both have a credit card which is basically just an extra card of my everyday credit card. They can use that for books and things of that nature that I’m paying for anyway, no questions asked. Then, they each have a debit card (though they only use it as a cash withdrawal card) that links to a small checking account where I automatically deposit their monthly allowance. They can pull cash out to have on hand for small, everyday miscellaneous spending (pizza with friends, a book of stamps, etc.). If they needed / wanted to buy something “larger,” they could always use the credit card and then just pay us back, but really I don’t even envision that happening, because our goal is to pay for pretty much everything except those small, everyday walking-around-money types of expenses that the allowance should cover.</p>
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<p>My main disagreement with oldfort and you here is based on the experiences of my similar aged friends and myself who either waited to junior/senior year of college or in my case…never applied for a credit card until after graduation. It did make things like finding apartments much more difficult…especially if one doesn’t have a co-signer because landlords want to make sure there is someone with an established credit history upon whom they hold legally liable in case the tenant with no credit history or worse…bad credit history…or their roommates* is late on rent payments. </p>
<p>I’m also wondering if oldfort and you are universalizing an experience that is really only available to families with excellent credit…something which makes this only applicable to a minority of American families. Especially considering most American families tend to have mediocre-abysmal credit scores due to the recent recessionary climate, medical emergencies even with insurance, and sometimes spendthrift spending habits. </p>
<p>Consequently, landlords and financial institutions are extremely gunshy about this because of the recent recessionary climate and the rash of defaults/rent arrears.</p>
<p>Without having the need/inclination/ability to take out loans or any other means to build a good credit history, a credit card in one’s own name is the best means to do so if one doesn’t have parents who have “premiere accounts” and credit card accounts allowing for piggybacked credit cards on parents account/excellent credit ratings or parents with excellent credit ratings to act as co-signers. </p>
<p>Moreover…if the card associated with a parent’s account is in the child’s name…the credit rating of the parents’/credit history of that card itself would be treated the same as if that card was held outright in the child’s name for the same period. </p>
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<li>Amusing turn of the phrase “Jointly and separately liable for the entire amount”…</li>
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<p>This summarizes the reason why my kids have CC. (but pay in full).</p>
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<p>Well, I can’t speak for oldfort, but I don’t particularly care what families with poor credit histories have to do, or what their kids have to do. I feel quite confident that I have good enough relationships with banks that if / when my kids want their own credit cards, they’ll get them, and I don’t have to go through having them have some $500 credit limit and paying it off each month for that to happen. And the idea of debit cards just makes me shudder - I see no need for my kids ever to have a debit card (aside from using it as a cash-withdrawal card). If you can’t put it on a credit card and pay it off in full at the end of the month, you shouldn’t be buying it in the first place.</p>