If your son or daughter is in college or planning to attend college in the near future, it might be a good idea to sit and talk about student credit cards before they leave. This talk may be one of the most beneficial and useful talks that you can have with them as they become young adults.
The main topic of this talk should be centered on the high degree of probability that your child will receive numerous offerings for credit cards while they are at school. Credit card issuers have long known that college campuses are fertile ground for picking up new accounts.
Parents have long known that when children get to college age they want to exhibit some form of independence. This desire to be independent, coupled with these numerous offers for credit cards is where the trouble can begin.
The best way to keep your child from becoming loaded with credit card debt is to teach him or her about money and about credit before they get into trouble. It is important that you tell them about the way lenders can act sometimes, and that receiving numerous offers for credit cards does not mean they have to apply for each one. Some college students end up with a dozen cards and then the temptation to use those cards kicks in. Within a very short time, many of students have maxed out their cards and are faced with incredibly high payments at the end of each month.
The truth is many students have to drop out of school in order to go to work full time in order to make these payments. That is certainly not what most parents anticipate for their college bound children.
When you talk with your child make sure you go into the some practices that are being used by credit card marketers. It is not uncommon for these people to use offers of free merchandise or other promotional offers to entice students to fill out credit card applications. Some students are asked to fill out the cards and told that they can simply cancel the card later. This may be true but they rarely tell the student that canceling cards can be a negative entry on their credit score.
In the past, many credit card issuers would set up tables in dining halls or other places where students gather. This made the temptation to fill out an application form even more intense. Some schools have since curtailed the number of places that these tables can be set up, but do not assume that the college your child will be attending has done this. Let your child know that they are under no obligation to sign up for a credit card from anyone. Ensure that they know that just because their friends are doing it does not mean they have to do it as well.
Many parents have found it safer to get the student a credit card before he or she leaves for school with the caveat that the card is to be used for certain things and not to be used for other things. When you explain to your child that one credit card is enough to handle most circumstances, they often understand the reasoning behind your not wanting them to get more cards.
Lastly, one good way to show your child how a credit card works is to show them one of your current statements. Explain to them that a credit card is just that credit. This money has to be paid back and often it has to be paid back with interest. Explain to them what a credit report is and what a credit score is and how important it is that they not get into credit trouble this early in their life. Your talk can save them years of financial turmoil.
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