Monday, August 24, 2009
New credit card rules help young college students
On Mondays, Dan Danford answers a question in this space from a reader. If you have a question, please ask - we're happy to help!
QUESTION: My 19-year-old daughter is in college, away from home for the first time. I’m sure she’s going to get opportunities to get credit cards. Should I discourage that? Or set some rules about how it should be used? I know she’s an adult, but I am paying for college, so I feel that I should exert some control over her spending habits. What do you advise?
ANSWER: Good news for you. Under the new law governing credit cards, children under 21 can't get one without a co-signer. So some of those now-famous college credit card horror stories won't happen in the future! Or, if they do, you'll be part of the story.
Seriously, it's good for a child to learn credit card protocol with a responsible adult. And they are an unmatched convenience in today's world. My suggestion is to apply for a single card in your joint name. Have statements sent to both of you and monitor spending and monthly payments. Best to pay it off each month, but you can decide if a circumstances calls for a different approach.
Think of this as a teaching opportunity. These are life lessons with important consequences. Good luck.