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.


  1. This comment has been removed by the author.

  2. Why not just avoid credit cards all together to alleviate any potential problems with getting into debt and owing the rest of your life to Chase, Bank of America, etc?

    Wouldn't it be so much easier to teach a college student how NOT to use plastic so they are responsible with their money and not rely on that plastic crutch for the rest of their lives?

    How great would it be for that college grad to come out with no student loan debt and no credit card debt? Imagine what your child would be capable of doing with their life and money!

  3. I know what you mean, and many people would be much better off without credit card debt. And I love the idea of finishing college without owing student loans!

    For many of us, though, credit cards are a nice convenience and they can play a positive role in family finances. Like many adult things in life, the key to success is to use something responsibly. And, for most of us, we learn to use things responsibly by using them responsibly. I routinely use credit cards to buy groceries, airline or concert tickets, and sale products on the Internet. I pay them off each month, and they make my life and recordkeeping easier. Just because some people have trouble with debt doesn't mean that everyone has a problem with debt. (Can you hear me Dave Ramsay?)

    Seriously, I'm okay if you suggest that people (including students) forgo credit cards. Many, maybe most, people are going to use them anyway, and I'd rather they learned some good habits along the way. That's why a parent should be involved. But, I'll concede you make some good points and encourage you to keep making them.


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