<p>D has been authorized signatory on my credit card for the past few years. But D rec'd her first credit card solicitation and I'm think that, even if we don't take advantage of that offer, she ought to have her own account.</p>
<p>One poster noted that Visa was not accepted for any on-campus purchases at her child's college. Any cards not accepted at Smith? Any on-campus benefit to having any particualr card?</p>
<p>My daughter has used her Visa card for the past three years at Smith without incident.
It is her account and she has used it wisely. She has established an excellent credit history by paying it off entirely every month.</p>
<p>Visa or master card works well. Having a credit card is handy for those emergency big purchases that come up and it's worth it to learn to use it wisely (that took me most of sophomore year, but I got there). Visa or MasterCard will do fine, but I would avoid Discover or American express. Most of the stores in northampton are independent and like most small stores they only take Visa/MC.</p>
<p>i got my first credit card junior year (a mastercard) and only wish i'd done it sooner--it's so convenient, it gives me (a tiny amount, but some) cash back on my purchases, and paying it off each month has helped me build up good credit--comes in handy when renting apartments, taking out grad school loans, etc. so as long as you can trust your daughter to be responsible with it, a credit card in her name would be a great idea.</p>
<p>I would suggest getting Visa just because if she happens to travel outside the country she could still use it. I know for a fact that when I go to Europe I have to put away my Discover and bring along my Visa instead. (Even though I use discover more often in the states) But what do I know, I'm just a 17 year old girl who likes shopping a little too much. :D</p>
<p>Moodle: n.b., but paying the balance off in full every month does not build the best credit rating. Buy something substantial, take 3-6 months to pay it off, then do it again upon occasion. E.g., an airline ticket.</p>
<p>Paying off the balance in full is the most prudent way to use your credit card. That's how we manage our money and that is how my D uses manages her credit card as well. Banks who issue the cards of course want you to carry a balance. That's how they make their money.</p>
<p>Yes, carrying a balance is how the banks make money and I'm not suggesting carrying large balance routinely. But paying off in full every month does nothing to build a credit rating; check with a credit advisor.</p>
<p>Hm, that's interesting. I only say so because I have a credit card (Visa, BofA) and I pay it off every month, and I've had my credit limit raised twice in the year I've had it, which I took to be a reward for being so good about my money. Maybe not though. </p>
<p>I thought of something else as a tip for you parents out there. If you can get a credit card for your daughter at the place where you bank, you might get a better rate than if she just gets one on her own. Most student credit cards have 18-20% APR, but I know at BofA you get a lower APR if your parents also bank there. APR's don't matter so much if you're going to repay it every month, but just as an FYI</p>
<p>S&P, there's a distinction between a card issuer raising your credit limit and what your credit score (FICO) is. </p>
<p>But a bingo to what you said about shopping for APR. D's bank has a pretty reasonable APR for a student card but it's tied to her a) opening a savings account when she applied for the card and b) having regular monthly automatic deductions from checking to savings. Since this is a good habit to get into, it was not a problem as a condition.</p>
<p>TheDad, that is very interesting. My financial advisor was the one who suggested my daughter have her own credit card account several years ago. At that time she recommended the card be used regularly and paid off in full every month.
I don't know which plan is best, but ours worked for us. My daughter has an established credit history with a very strong score.</p>
<p>Same here. I've had a clothes credit card that was paid off in full every month since I was 14 or so and I too have a very strong score at a very young age. I don't know the nuances of everything but when I looked at my credit report, it just said whether I paid the minimum every month or not, not whether I carried balances or anything.</p>
<p>Hmmm, TD, I've <em>always</em> paid off my credit card balance in full every month, and I've always had good credit. In fact, when you apply for the large ticket items later in life (car, mortgage), they want to know whether you pay off the balance every month. </p>
<p>A credit card creates credit history, and if you're not too much in debt (either paying off every month or doing as TD suggests), you get good credit, as long as you meet that monthly minimum and then some. The substance of a credit report, however, comes when you buy a car or house, and THEN pay on time every month. That's when you have lenders falling over themselves to take out loans and to give you better rates.</p>
<p>We're starting to stray from the original question, but on the subject of the FICO score and what affects it, here are 3 links that provide some helpful information:</p>
<p>Good links but note: there is a difference between paying balances off "on time" and paying balances off "in full." </p>
<p>A client's credit rating has a significant impact in my business (real estate) and the offices where I've worked have had a number of presentations over the years about repairing and/or building credit ratings. Paying off a balance over a short period of time (or a longer one, if necessary...car payments are a good example of the latter) beats paying off in full. Or at least that has been a consistent element of what we've been told.</p>
<p>One other nugget about FICO scores: you do well if you don't have a balance of over 35 percent or so of any given credit line.</p>