Is your child headed to college? Have they asked you for a credit card? As a parent, it is up to you to assess the situation and decide whether or not to grant this wish. When it comes down to it, it really depends on the level of responsibility your child has exhibited in the past. It's tempting for the student to have the ability to suddenly pay for a variety of items. Many students don't consider the usage of a credit card as the same as paying cash. Somehow the credit card bill just magically gets paid.



Students may have the tendency to show off in front of their friends by buying snacks and drinks for everyone. Or use the credit card to get cash by paying the entire bill for lunch and everyone paying the student cash for their portion.

Should you make the decision to have a credit card issued in their name, the next step is to sit down together and agree on ground rules, making the stipulation that if these rules are not followed they will no longer have the privilege of using the card. In most cases a student with no credit will have to have a co-signer on the account. That co-signer could be you.

As long as your child is responsible, a student credit card will help them to begin building their credit history at an early age. This will be helpful when it comes time for them to buy a car, purchase a home, etc. The chances that they will then need a cosigner will be greatly reduced.

On the other hand, if they have not proved to be responsible up to this point the improper use of a credit card could be detrimental to their financial future.

Many parents have made the decision to have a credit card issued to their child which carries a low credit limit. This way they will have funds available, in case of an emergency, but won't have the ability to go out and purchase things that they don't need… items that they won't be able to pay for. In the worst case scenario where the student maxes out the card there will only be a debt of perhaps $500 to $1000 rather than thousands of dollars on a card with a higher limit.

It is important for parents to instill in their children the fact that once credit is tarnished or destroyed, it is very difficult to re-build. These same children may not be concerned with something that they feel will only affect them a few years down the road. Unfortunately, many young people tend to be more concerned with the here and now.

Credit card companies solicit students through mailings, online and even on campus. It's not nearly as difficult to obtain a credit card if you're a student, even with no credit history.

Should your student have a credit card? Take the time to sit down and discuss both the pros and cons. It's up to you to help them make the right decision.