Posts Tagged ‘good credit’

Should College-Age Kids Have Their Own Credit Card?

Should college-age kids have their own credit card? That’s a difficult question to answer and a lot depends on the maturity level of the kid. One 18 year old may be vastly more mature and financially savvy than another, so making the blanket statement that no college-aged child can manage his or her own credit card isn’t quite correct.

There is no doubt that giving a credit card to someone who doesn’t yet have a stable income is risky, but, if your college-aged child is otherwise responsible, then allowing them to begin to build that all-too important credit history early may be a good choice.

Regardless of whether your child is a spendthrift or a miser, be sure to comparison shop for the best card for him or her, and along the way,  provide a little financial education as well. It is too bad that high schools don’t offer money management classes and sadder still, colleges are all too willing to lend money to their students without educating them on the interest they are accruing and the repayment terms. In this, you, as the parent, need to take the lead on this.

The CARD act of 2009 has some special provisions regarding the issuing of credit cards to those under the age of 21. Among these is the requirement no credit card may be issued to someone under 21 unless they a.) have a cosigner, or b.) they can demonstrate the ability to repay the credit card balance. In addition, no “prescreened” credit card offers may be sent to those under the age of 21.

Having good credit is of vital importance these days, and young people need to be taught sound money management practices early so that they can avoid credit troubles down the line. Having a credit card and using it wisely is a good way to start learning these principles.

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