I agree with thumper1 about not to get a credit card until you have a job and to have a part time job while in college. Aside from earning some spending money, it is also a great resume builder when looking for internship/real job later. Many hiring managers prefer applicants with some sort of work experience.
One of the reasons both my kids had credit cards around the age of 20 is that even when you reach the “magic” age of 21 which allows renting a car and getting a hotel room, you nearly always need a charge card. There are a multitude of reasons for a 21 year old to have a charge card, including emergency airfare, medical attention while on vacation, etc. If you start with a limit of $500 at 20 years of age, you should be able to get that doubled at 21. I’d be pretty unhappy with my kids if they couldn’t handle the responsibility of a charge card by the time they were 20. And, fwiw, both my kids starting working at least 30-40 hours week in the summers from age 14.
How did it go, OP?
This OP’s kid had $2000 (or more) in his own savings…but elected to use his parent credit card for discretionary expenses. THAT would be the thing that would make me take that credit card away.
Rental cars and hotel rooms? Those would be discretionary spending at MY house.
In the 14 years since my oldest kid graduated from HS (2003), no one has ever needed an emergency plane ticket…ever. And when both kids traveled abroad, we made sure that they would have emergency coverage and medivac insurance.
Actually…as a grown adult, I have never needed an emergency airline ticket!
I think the point was that even if you have cash to cover a hotel room, most hotels will want a credit card. So it’s not as simple as saying they should use their own cash for it.
If my kids used my CC to treat their friends to dinner, I’d take it away. But both of our kids have cards linked to our account. While in school they primarily use it to buy books. I’ve told them that they can always use it to Uber if they need to. Don’t think either has.
It’s a convenient way for us to pay for things we agree to pay for. They’ve never abused it. If they did, we’d figure out another approach.
My son has both a debit card and a credit card. He has had a debit card since he is 14 years old. Providing the debit card was part of my financial education plan for him. At 14, my son would have $50 a month on his card. Each year the amount was raised. He currently gets $200/month on his debit card.
The debit card prevents any major damage. You can’t hand over a debit or credit card to a kid without financial education. Kids should learn to review bills they receive for accuracy and pay those bills in full and on time. When my son was given his debit card, he was told the $50 was his to spend and that like an adult can’t go to their employer to get their paycheck early, he too needed to figure out how to make that $50 last the entire month. The debit card worked for us as a real life budgeting tool for a young teen.
Believe me, my son would not have a credit card with anything more than a $500 credit limit to get through an emergency situation if he had not demonstrated a 4 year track record of financial responsibility. Even though I was confident in him, it was a new financial tool for him so I did check the statement every two weeks for the first 6 weeks. A charge for $9. He said he prefers the debit card and is spending $100 - $150 a month.He does have a meal plan and there are multiple dining options he can use that meal plan on (starbucks,etc) which obviously helps considerably.
We can’t budget for our kids into adulthood or these will be adults who end up in financial disaster. Even though it will be their money, having financial issues will effect them in many ways and no parent wants there kids to squander away money regardless of whose name is on the bank account. Depending on what career they are pursuing, a credit check will be run that could prevent them from getting a job they are hoping to get. Credit scores are used to determine if they get a better rate on a mortgage and insurance premiums. Kids need to realize this now.
My son has a debt card. You can’t spend what you don’t have.
My kids have had to pay for hotel room when stranded at airport a few times.
My kids had credit cards since high school. I didn’t need years of giving them a ( much less protected) debit card to know that they were rule followers. I had 14 years of experience with them as people. If I told them not to spend more than X I knew that based on their personal behavior they never would.
I also taught them about what I believed are best credit card practices in today’s world:
Online monitoring of the account daily which makes it easy to see if there’s any mistake.
When it became available, Text alerts for charges which makes it even easier
Understanding that a credit card is a convenience tool and that only desperate and foolish people don’t pay off on full.
Paying off weekly, not monthly to better get a handle on lending. ( to be reassessed if there’s a real raise in interest rates in savings accounts…but in today’s world there’s no real value lost)
Spending based on a budget and thought about what is reasonable.
My kids had credit cards in their own names & were responsible for paying them on their own. If there were expenses that were “parental” in nature (for example, cost of airfare to come home) – I reimbursed the kid. But I didn’t have access to their statements & didn’t monitor.
Our situation is like maya54, kids had credit and debit cards starting in high school, they are responsible people. And some kids really need them earlier than others.
OPs kid went wild his first time with a credit card, not a crisis, just have to wind it in with a reality check with him. The earlier they know the dangers of credit cards gone wild, the better.
Sometimes I feel like I live on a different planet than many of the posters on CC.
- My kid's savings were the first money spent on her college. What more important expense could she be saving for? To appreciate something, you should be invested in it.
- If he's traveling most weekends with friends, when is he doing his homework? Attending study groups? Preparing for tests? Are you paying for him to get an education or live like a playboy?
- I'd look at his first semester grades. If he's not doing well, bring him home, cut his access to money, and send him to work. There is no point in paying tens of thousands of dollars to give someone an opportunity they squander and don't appreciate. There is nothing quite like a year of working at a difficult, boring, unskilled job...to make you appreciate getting an education, learn the value of a dollar, and GROW UP a little.
This kid has spent an average of $1000 a month on discretionary spending…already…does anyone here think that a kid should be spending $9000 a year on discretionary spending…which is what it will be if the spending continues at this rate? And on his parent credit card?
My mortgage payment is less than $1000 a month.
I think this kid should also take a personal finance class. Many colleges offer this as an elective.
Alot of kids go off to college with mom’s credit card which frankly suprises me with the countless options available today. From a young age my kids got jobs and a bank account. If my eldest needs something I transfer funds to her account. She mostly pays for everything but situations arise for medical and what have you. She does have a credit card but she got that with her credit. Sending a freshman off to college with a credit card honestly teaches no financial management. I would cancel the card and transfer his budgeted allowance monthly. Its a painful lesson but when its your money you tend to be much more responsible. I would not have him transfer to Portland State over this unless his grades are in the toilet as you can easily prevent this from happening in the future. I would also find out if he is eating the food on the meal plan as I did not back in the day being a picky eater.
The OP stated that the S had savings but they started him out with $150 at the beginning of the semester.
And gave him a CC to use I assume for emergencies, I am not sure if he took his car to school or not.
She has already cancelled the CC and planning to have him pay back the money.
Most of the purchases being take-out food and computer games, it sounds like he and his friends are staying in all weekend playing games. I would worry about the time (not) spent on academics, and other productive activities.
I do hope that OP can have a good talk with her S, and find out why he is acting the way he is.
@tuscangal: please come back to update us after you talked with your son.
Sometimes, the spending orgy subsides once the student is called on it. My sons both have cards linked to my account, and I check activity daily. They know that I will question charges as matter of basic security, to be sure they are legit. The elder son still struggles with money management (as I did well into adulthood). The younger has already built a credit rating, with several accounts in his own name. If the OP feels that she and her son have resolved the issue, she probably does not need to pursue a nuclear option immediately. She should monitor activity on the account, so that her son knows she sees the trips to Portland, the Uber and GrubHub bills, the questionable transactions, et al.
Testing limits is a normal, healthy part of maturing; imagine if nobody in our species’ history ever attempted it.
It was a running joke with my parents, in a bygone era without today’s communication technology, that they knew I was alive and well when they received monthly bills.
I knew my current freshman was a spender – I set the expectation over the summer that she WAS saving for school year spending money (she plays D2 LAX so realistically could have a hard time working in a job expecially at first). I used one of my own accounts (attached to hers) to help her ‘save’ money each pay. And now I give her some money at the first of each month (its hers but I help her to control it). I have an older one that doesn’t require that but this one does so I hope it teaches her to be a tad more controlled.
DS has a debit card on his small checking account, with me on it to be able to add money. No credit cards, as far as I know. He should have had more than enough money for the semester, but he was burning through money, mostly supplemental meals (he has a lower meal plan) and a few trips to visit his GF. I now restrict when I deposit to his account to make sure he doesn’t have “extra” cash. (I know – mean. 
) We will see how second semester goes.
I added money for winter gear and will add more for meals as the account balance drops. I told him I am glad to finance savory off-campus food and his necessities but I’m not paying for GF visits in lieu of studying. He gets a small direct scholarship paid to him each semester and he gets to keep that. No work as a freshman. He can work this summer, etc. I figure, as a sophomore next year, he will have a handle on achieving good grades and financing his own properly timed GF visits.
Unrestrained spending? Boys will be boys–some more than others. No remorse? Er…
Reduce to a $100/month debit card as so many others have said. Maybe increase to $150 or $200 if, in the future, if you feel like he’s spending it responsibly and is taking school very seriously. A variation on the theme–instead of the unconditional $100/mo debit card, how about matching his earnings from a 10 hr a week job up to $100/month (like a matching 401(k))
My sophomore is a serious student (mom’s genes) and is treading water (3.3) at a brutally rigorous college. He has money from summer jobs and work he takes on during breaks that he is expected to use toward discretionary spending.
I pay for his books, airfare to and from school, basic dorm room furnishing expenses (table lamp), incidental basic necessities (like pharmacy co-pays), and piano lessons. He had a 10 hr/wk job during school last year but I’m letting it slide this year because he spends 40-50 hrs a week in classes and studying and I worry about him burning out (he’s my first and I’m a softie).