Student credit cards are a wonderful tool for parents to use to teach responsible financial habits. Many credit card companies offer student cards as a way for parents to incorporate them into their efforts either before or as their kids are preparing for college.
Editor’s Choice[card id=”768289″]
Finding the right student credit card that offers parents the necessary options to instill those good habits should encompass an analysis of fee structures and online monitoring, along with APR rates and any expiration dates associated with intro rates and offers. Using this criteria, along with other considerations like parental controls, our editor’s choice was selected.
4 More Student Credit Card Choices[card id=”985478″] [card id=”768543″] [card id=”999468″] [card id=”768532″]
Due to new laws, specifically the 2009 CARD Act, high school or college students now have a harder time gaining access to a credit card without either a co-signer or solid proof they can repay the debt. This is partly because so many students would see tables set up on their college campuses, with credit card companies eager and willing to sign them up. They used free tee shirts and other promotional items to lure them in. Unfortunately, many had no idea what they were getting into.
Many college students found themselves struggling with credit card debt long before graduating college and certainly before securing their dream jobs (and a way to pay for those credit cards). The lure of swiping a credit card was too much for many to resist and it wasn’t until APR rates came into focus when they opened their monthly statements that these students realized the impact of unmanageable debt. These realities served as the ideal springboard for new regulations. The results, almost three years into the new laws, have proven successful.
Benefits of the Right Student Credit Card
Student credit cards were designed to serve as a bridge, in some ways, that link young consumers to the responsibilities of proper credit management. Today, these students and their families have many choices, including:
- Rewards programs
- Low or no intro APR rates
- Cash back bonuses
- Online account management
- Around the clock customer service
- Zero fraud liability
- Discount shopping
The same protections found on the parents’ credit cards are found on most student cards. Needless to say, there are many student credit card offers available.
Another way these credit cards are becoming useful is the versatility. Many parents are simply adding their teens or young adults to their accounts, complete with their own credit card. This allows a streamlined management effort that allows parents to remain focused on just one account. Others are stand alone credit card accounts that parents are willing to co-sign for. Many parents like the idea of having access to online activity checks via the card’s website.
Possible Downsides to Student Credit Cards
Anytime teens and money are combined, there exists the possibility of poor money choices. These credit cards aren’t designed to be the cure-all; rather, they’re intended to be used as a tool. Also, no matter how much “real time” tracking a parent might maintain on his young adult or high school student, he doesn’t learn of a purchase until, well, after that purchase is made. Whether it’s a ten second or ten minute delay, an alert can’t go out unless the card has been used. This could introduce an inability to speak with a student away at college before he decides to buy the $600 surf board. Setting definitive guidelines beforehand can eliminate those surprise purchases.
Also, for those that require cosigners, many parents are unable to do so because of past credit problems of their own or because they are already too extended in their own financial obligations. This could prevent some young people under the age of 21 to get access to their own card accounts.
Student credit cards have emerged as a popular way for young people to better manage credit during their college years – and even some high school years. With proper management, a no nonsense approach to taking responsibility for their choices and ways to make their monthly payments, these can be a springboard into adulthood, where mortgages, more credit cards and automobile loans await. Parents who take a proactive approach to educating their children are only ensuring better habits and secure financial futures.
Have you had any personal experience with Student Credit Card?