The College Kids And Credit Cards Tandem
Credit cards are ideal for college kids. It is a way of checking all the expenses made by them; this is since it is not advisable for them to have cash when they are living with other people. Most of the time, college kids are not that responsible yet. And this sometimes makes it not the right time to give them a credit card. And so, how can you balance the credit card account of your college kid?
Students who are not managing their financial accounts will lead often times to student debt. For that reason, most of the university students with credit cards have usually lower limits. Most of the college students, who don’t pay attention to their debt responsibly, will lead to bankruptcy after graduation. This article will give you 3 tips to manage with your college kids’ credit card.
Firstly, discuss to your child the responsibility of having a credit card. He should know that if he will spend too much, you will not pay for his credit card. He will be the one to find ways of how he can pay his debt-by selling his beloved things or by having summer job.
Secondly, explain to your child that if he wants to apply for other credit cards, he must consult you first. This is actually important, for the reason that most credit card companies provide presentations at different universities. Freebies for the student are offered once they signed up with high-interest rates. Since your child is fond of the freebies, he will not be aware for the other charges such as annual fees and other hidden charges of the credit card. He will also think that using his credit card will not be brought to your attention. If so, your child will have many credit cards with outstanding balances as well.
Thirdly, you should allocate a monthly spending limit to your child. Around $200 is a good limit including his food. You need to give him an account book, probably a small one, so he can list all his expenses. And last, reiterate to him that the remaining balance he has should always be seen in his account.
College is the right time to learn our mistakes, and I hope that credit card issue is not one of them. Always be strict if your child will use his credit card, otherwise they will be the one who will lose.
Jeff Deutsch studies and writes about personal finance matters and contributes to this website. To learn more important facts about New Jersey jumbo mortgage and jumbo mortgage rates NJ please click the preceding links.