OT: Parents with kids going to or in college... Credit card?

[RUBubba]

Question for parents with kids either in college or heading off to college...

Does your kid have a credit card or debit in your name? If so, is it for general use or just for "oh sh!t" moments?

Still have a year plus before my kid is off to college, but curious what people do.

 

[rutgersal]

Your kid should get a card in their own name. They’ll get the opportunity when they get on campus. And there will be tables setup with a bank representative signing people up.

As long as the credit card is used responsibly, it’s a good thing. A percentage of kids will misuse the card and wind up in debt, and the credit card companies know this.

Kids generally use it for general use.

Used responsibly, your child will be able to get a loan for a car when they graduate, then ultimately buy a house down the line.

 

[RU205]

My kid has a debit card in her name tied to her bank account.

 

[DJ Spanky]

Question for parents with kids either in college or heading off to college...

Does your kid have a credit card or debit in your name? If so, is it for general use or just for "oh sh!t" moments?

My kid has a debit card in her name tied to her bank account.

Tyler, who is down in VA (going into his senior year), has a bank account and a debit/credit card in his name, and also has a credit card on one of our accounts for urgent situations. He also has a card to my FSA account for medical bills not covered by insurance.

 

[BossNJ]

My daughter has a debit card in her name and a credit card issued in her name but tied to my American Express card.

Guess which one she uses more, lol.

 

[RUInsanity]

My son @RU has both a Credit Card (in his name) and Bank Account (Joint Account with my wife). He's now off campus but has a smaller RU Express meal plan that we can fund directly. Find that he uses Venmo frequently as well.

My son in HS has a Greenlight Debit card that we can fund if/when needed.

 

[dfr1966]

Tyler, who is down in VA (going into his senior year), has a bank account and a debit/credit card in his name, and also has a credit card on one of our accounts for urgent situations. He also has a card to my FSA account for medical bills not covered by insurance.

We did the same approach for both of my daughters.

 

[TDIrish27]

We did the same approach for both of my daughters.

Ditto

 

[RC1991]

Our daughter is an authorized user on one of our credit cards and also has one in her name. She has a checking and savings account as well. She is living in an off campus apartment this coming year and we have the rent payment withdrawn from her checking account to help her build credit. Her use of our credit card was pretty limited.

 

[RUBubba]

Thanks for the replies. Nine responses and not one snarky one!

Kid has a bank account in his name and I plan on hooking up a debit to it, but will probably get a CC for those oh sh!t moments.

 

[BossNJ]

Thanks for the replies. Nine responses and not one snarky one!

Kid has a bank account in his name and I plan on hooking up a debit to it, but will probably get a CC for those oh sh!t moments.

Should definitely have a CC. Just don’t give him/her free reign with it like I (actually my wife) did.

Big mistake..😂

 

[newell138]

my 2 daughters have had bank accounts since birth and debit cards since they were 13 when they started working summer jobs. Makes sense to start generating a good credit score early. They both had no problems getting mortgages this past year.

 

[yesrutgers01]

Get them a credit card but also limit the credit to $500.00
Make sure they also give you full access and ability to speak to the financial institution.

This way- they are never going to rack up a dept that is insurmountable- and if you do need to bail them out, you will know what is due before it IS due, make sure they have the funds to pay it and make sure payments are never missed.

Our kids came out of college with 800 credit scores plus 4+ years of history. Throw in a 2nd card and make it a "gas card" with an even smaller limit and do the same thing. Again- just drives up their credit score.

If your kid is irresponsible with either- easy enough to just pay off and close out and they keep a good rating and it doesn't break your bank.

 

[BuggsyRU]

My kid has a debit card in her name tied to her bank account.

Same here

 

[yesrutgers01]

Same here

my worry with debit cards is that they are so easily hit with fraud and you just cant get the cash back

 

[BuggsyRU]

my worry with debit cards is that they are so easily hit with fraud and you just cant get the cash back

We have our daughter’s debit card set at a maximum daily withdrawal limit of $300 so any fraud attempt over that would be declined, so it’s limited liability. She’s had the card for a few years now with no issues of fraud on her card knock on wood!

Plus, if she has an emergency need for funds, we can instantly Zelle her money from our BOA account to hers.

 

[yesrutgers01]

We have our daughter’s debit card set at a maximum daily withdrawal limit of $300 so any fraud attempt over that would be declined, so it’s limited liability. She’s had the card for a few years now with no issues of fraud on her card knock on wood!

Plus, if she has an emergency need for funds, we can instantly Zelle her money from our BOA account to hers.

Zelle is also a big game changer. My biggest thing is that a low credit credit card and making sure it is always paid - they walk out with at least a 700+ score and a credit history which is huge.

My wife is a mortgage load advisor in 15 states...and the thing we came across when our son got to the NFL with what we would all consider a crazy salary- the reason he had purchasing power was his history.
She would also work with other players- some with 7 figure salaries and they were having problems getting mortgages because of their lack of history. This is why you see many players run into financial issues when they decide to by their own house and one for their mothers- all of a sudden- they figure- I have $20 mil coming and then find out they have to put up huge amounts of cash to finance anything.
If they had only carried a $500 credit limit card for 4 years and made sure it was paid- they could have been saving themselves a lot of trouble and stress.

 

[RUforJERSEY]

Mine will be startting freshman classes next week and although he has a checking and savings account, I suspect he may be hitting me up often. Not in a hurry to get him a credit card though for fear he'd get reckless.

 

[rutgersguy1]

Get them a credit card but also limit the credit to $500.00
Make sure they also give you full access and ability to speak to the financial institution.

This way- they are never going to rack up a dept that is insurmountable- and if you do need to bail them out, you will know what is due before it IS due, make sure they have the funds to pay it and make sure payments are never missed.

Our kids came out of college with 800 credit scores plus 4+ years of history. Throw in a 2nd card and make it a "gas card" with an even smaller limit and do the same thing. Again- just drives up their credit score.

If your kid is irresponsible with either- easy enough to just pay off and close out and they keep a good rating and it doesn't break your bank.

I've had the same idea. Low limit credit card. Even for ourselves, let alone a young adult, not a fan of anything that has a direct line into a banking account. If anything were to go wrong or get stolen or whatever, it's the credit card company that will take care of it.

 

[rutgersal]

Mine will be startting freshman classes next week and although he has a checking and savings account, I suspect he may be hitting me up often. Not in a hurry to get him a credit card though for fear he'd get reckless.

He’ll get one anyway. I spent a Friday signing people up as a fundraiser for my organization, while at Rutgers.

 

[S_Janowski]

Your kid should get a card in their own name. They’ll get the opportunity when they get on campus. And there will be tables setup with a bank representative signing people up.

As long as the credit card is used responsibly, it’s a good thing. A percentage of kids will misuse the card and wind up in debt, and the credit card companies know this.

Kids generally use it for general use.

Used responsibly, your child will be able to get a loan for a car when they graduate, then ultimately buy a house down the line.

Not good advice imo. Not every 18 year old is responsible or mature enough for a credit card in their own name (especially if they don’t have much income). There also shouldn’t be much of a need for a credit card in college.

They are better off having a debit card tied to their own personal bank account and a credit card (with the a parent) in case of emergencies.

There really isn’t a need for a credit card at that young of an age other than emergencies. They will have their whole life to build credit under their own name.

 

[rutgersal]

Not good advice imo. Not every 18 year old is responsible or mature enough for a credit card in their own name (especially if they don’t have much income). There also shouldn’t be much of a need for a credit card in college.

They are better off having a debit card tied to their own personal bank account and a credit card (with the a parent) in case of emergencies.

There really isn’t a need for a credit card at that young of an age other than emergencies. They will have their whole life to build credit under their own name.

Not every 18 year old is going to go to class at Rutgers, but they still get the opportunity to determine their destiny. And parents are shelling out just south of $36K per year for a Rutgers education. So the stakes are much lower for a credit card. It’s never to early to learn to be financially responsible and it’s a great lesson to learn while at Rutgers.

Every Rutgers kid is going to have an opportunity to sign up for a credit card, and their application will be granted as long as they don’t already have an adverse credit history.

Without a positive credit history, how are they going to rent an apartment after Graduation? How are they going to get a loan to buy a car? Sure Mommy and Daddy can co-sign, but it’s better for grads to be financially independent as soon as possible.

 

[BigRnj]

My kids all had an AMEX card tied to my account. I only allowed a $100 spending limit for little emergencies (Uber rides if away from campus and the designated driver imbibed, etc.). I upped the limit at the start of each semester for books/supplies. It was just a few quick clicks to increase/decrease spending limits as needed, and of course I received instant notification of all expenditures. It worked well, my kids didn’t abuse it and it was convenient for me as well.

PS - they each had an account in their name also for discretionary spending and to build a credit history… I covered the things most parents would cover (if they had the means)

 

[S_Janowski]

Not every 18 year old is going to go to class at Rutgers, but they still get the opportunity to determine their destiny. And parents are shelling out just south of $36K per year for a Rutgers education. So the stakes are much lower for a credit card. It’s never to early to learn to be financially responsible and it’s a great lesson to learn while at Rutgers.

Every Rutgers kid is going to have an opportunity to sign up for a credit card, and their application will be granted as long as they don’t already have an adverse credit history.

Without a positive credit history, how are they going to rent an apartment after Graduation? How are they going to get a loan to buy a car? Sure Mommy and Daddy can co-sign, but it’s better for grads to be financially independent as soon as possible.

I can’t think of any reason an 18-22 year old in college would need a credit card unless they don’t have a support system and are scraping buy.

If a kid has 1 or 2 supportive parents they are much better off getting a card under their parent(s) and using it here and there to build credit.

A lot of kids are already signing up for hundreds of thousands of dollars of debt just by going to college for 4 years - what makes you think they won’t be susceptible to racking up thousands of personal debt on food, clothes, video games, traveling or other unnecessary items.

Kids make poor choices and unfortunately making a few poor choices with credit cards can quickly get you into trouble that could take years to recover from.

And finally who cares if every student has the opportunity to sign up for a credit card. I’ve had thousands of opportunities in my life (literally get a few a week in the mail) and have no problem ignoring them.

 

[yesrutgers01]

I can’t think of any reason an 18-22 year old in college would need a credit card unless they don’t have a support system and are scraping buy.

If a kid has 1 or 2 supportive parents they are much better off getting a card under their parent(s) and using it here and there to build credit.

A lot of kids are already signing up for hundreds of thousands of dollars of debt just by going to college for 4 years - what makes you think they won’t be susceptible to racking up thousands of personal debt on food, clothes, video games, traveling or other unnecessary items.

Kids make poor choices and unfortunately making a few poor choices with credit cards can quickly get you into trouble that could take years to recover from.

And finally who cares if every student has the opportunity to sign up for a credit card. I’ve had thousands of opportunities in my life (literally get a few a week in the mail) and have no problem ignoring them.

being on the parent credit card can build up a credit score but they are not building history. Straight up tell your kid that as long as you are paying for their education- you will be monitoring their credit and will get alerts if a credit report is run on them. At 18- they can say no but you can also say no to your support. This way, you know if they try to apply for a card on their own.
Meanwhile- you start them on your card just long enough to get them in their own name with no more than $500 credit- and you make sure they are paying it on time every month.

Tying to a debit card and bank account is scary- even though, we still have to do that anyway. But also make sure that withdrawal limit is low too.

But with out credit "history" - your kid walks out of school with potentially good score but no buying power. And they are then either forced into a very high rate card or denied things like their first car or apartment.

My kids all qualified for an American Express day 1 out of college and after 1 year of that card, qualified for a platinum. They all had tier 1 credit.

 

[mildone]

Thanks for the replies. Nine responses and not one snarky one!

Kid has a bank account in his name and I plan on hooking up a debit to it, but will probably get a CC for those oh sh!t moments.

We sold our kids and used the increase in net worth to increase our credit limits.

 

[RUGiddy777]

Not good advice imo. Not every 18 year old is responsible or mature enough for a credit card in their own name (especially if they don’t have much income). There also shouldn’t be much of a need for a credit card in college.

They are better off having a debit card tied to their own personal bank account and a credit card (with the a parent) in case of emergencies.

There really isn’t a need for a credit card at that young of an age other than emergencies. They will have their whole life to build credit under their own name.

Was going to say the same. Not all kids are the same - and that free money from all of those sign ups could create a mess they’ll have to clean up later. Would be better if they have one and then you can review the credit report with them periodically.

 

[yesrutgers01]

Was going to say the same. Not all kids are the same - and that free money from all of those sign ups could create a mess they’ll have to clean up later. Would be better if they have one and then you can review the credit report with them periodically.

that is why you need access to one of the services that will alert you if they apply for a new card and a credit report is being run. But, you are correct- get them a card in their name with a very low credit limit

 

[scarletrat]

Same as others, got kids CC by adding to my and my wife’s AmEx account.

 

[Scarlet Bri]

We sold our kids and used the increase in net worth to increase our credit limits.

Love how this slipped by without any comments. Gave me a good chuckle

 

[vkj91]

Not sure if this will be considered snarky but how did they get through HS without a credit card? How do they get gas? Or go the movies? Or grab lunch after practice? My kids have had credit cards since freshman year of HS but with like a 250 limit. The limit goes up when they get a license. Went up again when they left for college. They abuse it they lose it.
that being said, tried to get multiple cards in my oldest name and she was never approved.

 

[rutgersal]

I can’t think of any reason an 18-22 year old in college would need a credit card unless they don’t have a support system and are scraping buy.

If a kid has 1 or 2 supportive parents they are much better off getting a card under their parent(s) and using it here and there to build credit.

A lot of kids are already signing up for hundreds of thousands of dollars of debt just by going to college for 4 years - what makes you think they won’t be susceptible to racking up thousands of personal debt on food, clothes, video games, traveling or other unnecessary items.

Kids make poor choices and unfortunately making a few poor choices with credit cards can quickly get you into trouble that could take years to recover from.

And finally who cares if every student has the opportunity to sign up for a credit card. I’ve had thousands of opportunities in my life (literally get a few a week in the mail) and have no problem ignoring them.

You’re generalizing and painting every kid with a broad brush, which is unfair. What about the kids who make good choices, and use credit responsibly? What if a kid needs a good credit history to land a good job out of school? What if a kid needs a car or a loan out of school, or rent an apartment ? It’ll be a lot easier if a kid can do so on their own, without needing a co-signer.

Next month thousands of kids will sign up for credit cards at the Rutgers student centers. The majority of them will use their credit card responsibly. 1 out of 4 will carry a balance.

Parents should educate their kids on the importance of paying off their balances.

 

[S_Janowski]

Not sure if this will be considered snarky but how did they get through HS without a credit card? How do they get gas? Or go the movies? Or grab lunch after practice? My kids have had credit cards since freshman year of HS but with like a 250 limit. The limit goes up when they get a license. Went up again when they left for college. They abuse it they lose it.
that being said, tried to get multiple cards in my oldest name and she was never approved.

Debit cards?

 

[S_Janowski]

being on the parent credit card can build up a credit score but they are not building history. Straight up tell your kid that as long as you are paying for their education- you will be monitoring their credit and will get alerts if a credit report is run on them. At 18- they can say no but you can also say no to your support. This way, you know if they try to apply for a card on their own.
Meanwhile- you start them on your card just long enough to get them in their own name with no more than $500 credit- and you make sure they are paying it on time every month.

Tying to a debit card and bank account is scary- even though, we still have to do that anyway. But also make sure that withdrawal limit is low too.

But with out credit "history" - your kid walks out of school with potentially good score but no buying power. And they are then either forced into a very high rate card or denied things like their first car or apartment.

My kids all qualified for an American Express day 1 out of college and after 1 year of that card, qualified for a platinum. They all had tier 1 credit.

I was under the impression that a kid would build both a credit score and credit history if they are with a parent (unless the lender detects this and exclude it)…but I may be mistaken.

I don’t see anything wrong with having them open up a personal card with a low limit…but kids will be kids and once they have 1 card they may seek out for cards for unnecessary and careless expenses which can quickly dig them into a hole.

I would rather my kid have to worry about how to build credit out of college vs. how to dig themselves out of debt and their potential poor credit history.

 

[S_Janowski]

You’re generalizing and painting every kid with a broad brush, which is unfair. What about the kids who make good choices, and use credit responsibly? What if a kid needs a good credit history to land a good job out of school? What if a kid needs a car or a loan out of school, or rent an apartment ? It’ll be a lot easier if a kid can do so on their own, without needing a co-signer.

Next month thousands of kids will sign up for credit cards at the Rutgers student centers. The majority of them will use their credit card responsibly. 1 out of 4 will carry a balance.

Parents should educate their kids on the importance of paying off their balances.

I’m not painting every kid with a broad brush - I actually think that’s you by encouraging all kids to sign up for credit cards at school fairs or assuming that 1/4 will carry a balance.

I have nothing against a college kid having a personal credit card. Just don’t think it’s necessary and could lead to early bad habits which are hard to recover from or fix.

I know people who dug themselves into massive amounts of personal debt and it started small at early ages. I’m sure you know these people too.

 

[vkj91]

Debit cards?

I’m anti debit card. Dumbest thing ever. Get absolutely no value for using it. Why wouldn’t you use a CC that offers rewards?

 

[m1ipabrams]

Our kids had their own bank accounts since forever and when they started driving we gave them a one of our credit cards to use. We monitored their spending and made them pay for anything that wasn't what we considered a parents we should pay for. Example, we paid for gas and most food, but if they went to the movies, they paid for that. When they turned 18 and started at RU we told them to get credit cards in their name. Anything we wouldn't pay for they should charge on their card, anything we would pay for(groceries, books, etc) they put on our CC.

We expected our kids to make good choices and talked with them about what happens if they didn't. We reviewed their finances with them from time to time to just check in and make suggestions/recommendations about how to handle things to make the most of the money they had available to them from their summer jobs. I still talk with my daughter(25) about her finances, mainly to address questions she has about ways to maximize her returns and plan for the future.

I understand not every RU student will make good choices, but I also believe part of the reason they don't is their parents didn't give the opportunity to learn and set the expectation that they be responsible adults.

 

[kupuna133]

my worry with debit cards is that they are so easily hit with fraud and you just cant get the cash back

Yep had my debit card and credit card stolen in college. Turned out to be my roommates girlfriend. New Brunswick Police and credit card company were slow to move on the case. Many calls to the girls parents and they finally made payment. Worst part is I never used the credit card, so wasn't looking for the bill regularly, she would intercept the bill when it came to the house. Didn't find out she was using the card until it went over the limit and I was in arrears by 3 months. Thats when she moved onto my debit card. Took awhile to have it removed from credit score.

 

[m1ipabrams]

I’m anti debit card. Dumbest thing ever. Get absolutely no value for using it. Why wouldn’t you use a CC that offers rewards?

and protections from fraud.

 

[yesrutgers01]

I was under the impression that a kid would build both a credit score and credit history if they are with a parent (unless the lender detects this and exclude it)…but I may be mistaken.

I don’t see anything wrong with having them open up a personal card with a low limit…but kids will be kids and once they have 1 card they may seek out for cards for unnecessary and careless expenses which can quickly dig them into a hole.

I would rather my kid have to worry about how to build credit out of college vs. how to dig themselves out of debt and their potential poor credit history.

What happens, is that they build a score but let's say they are going to make a significant purchase- it doesn't build history the same way a card in their name does.