Author Topic: first credit card for college kid  (Read 1648 times)

kbear

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first credit card for college kid
« on: September 16, 2019, 12:22:00 PM »
 So, we just dropped off our oldest at university last month. Is there a general opinion on credit cards for college kids and if signing up for one is a good idea? If so, any recommendations on which card would be best? For the record, we are talking about a responsible kid. Thanks in advance for any opinions/advice.

FI45RE

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Re: first credit card for college kid
« Reply #1 on: September 16, 2019, 12:32:55 PM »
So, we just dropped off our oldest at university last month. Is there a general opinion on credit cards for college kids and if signing up for one is a good idea? If so, any recommendations on which card would be best? For the record, we are talking about a responsible kid. Thanks in advance for any opinions/advice.

Here are some suggestions. There are several new "student" cards as well, like the Freedom Student and the Citi Rewards+

ETA: You can also make your kid an authorized user on your existing credit card accounts in order to help them build credit. Think about what the goal of the credit card is...do you want it to help them build credit? for emergencies? something else? That might help point you in the direction of the "right" card for them.
« Last Edit: September 16, 2019, 12:35:02 PM by FI45RE »

LifeHappens

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Re: first credit card for college kid
« Reply #2 on: September 16, 2019, 12:37:05 PM »
I went off to college with a checking account and a credit card from my parents' credit union. I used the card to buy books and paid it off immediately. It was a good way to start building credit. In general, I think getting your kid a low limit CC is a good idea.

Zamboni

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Re: first credit card for college kid
« Reply #3 on: September 16, 2019, 12:40:17 PM »
My first card was an American Express card that did not allow carrying a balance from month to month. All Amex cards used to be that way. Since then American Express has changed its model to be more like Mastercard and Visa, which is too bad because knowing I had to pay it in full every month definitely kept my spending in check!

PoutineLover

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Re: first credit card for college kid
« Reply #4 on: September 16, 2019, 12:59:47 PM »
I got a credit card when I turned 18 to start building up my credit score and get rewards. It had a low limit initially and I knew that it had to be paid in full every month. If you think your kid is responsible enough to not go into debt, understand how high credit card interest rates are, and will only put things on the card that they would have bought anyway, and has the money for already, then it's a good idea.

GizmoTX

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Re: first credit card for college kid
« Reply #5 on: September 16, 2019, 01:34:15 PM »
We helped DS open a credit card account when he was 17 & driving; we did not want him using a debit card to purchase gas. This card was with the same bank as his checking account; due to his age, I was also on the account. The credit limit was deliberately low, $500, no annual fee, and earned 1x cash back rewards. (Later on, this was replaced with a higher earning card.) DS was totally responsible for paying his card in full every month. I know parents who paid their student's card but this does not build financial literacy or responsibility. Because I was on the account, I could & did monitor it online, & DS knew that I would.

DS added a second card while in college: the CapitalOne Quicksilver card, which earns 1.5x cash back, no annual fee, & no foreign transaction fees. He is now 25 & his credit score is in the high 700s; he has never missed a payment or carried a balance. He uses the Citibank Double Cash Mastercard for most purchases, earning 2x cash back, no annual fee, but it does charge a foreign transaction fee. Recently he added the Barclays Uber Visa card, which earns 4x cash back for dining, 3x for travel, 2x for online purchases, 1x for all else, no annual fee, no foreign transaction fees.


jeninco

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Re: first credit card for college kid
« Reply #6 on: September 16, 2019, 02:02:25 PM »
Our 18-year old marched into the credit union where we all have our accounts, and asked what the options were. We all agreed that his own, secured card (secured by $ in his own savings account) was a completely reasonable option. His plan is to pay it off fully every month -- and I don't think he's intending to put much on it, other than unexpected emergencies for which I'll probably mostly reimburse him.

Cgbg

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Re: first credit card for college kid
« Reply #7 on: September 16, 2019, 02:39:05 PM »
We use USAA. Each kid got a card their senior year of high school. Itís attached to my account and I pay it each month. They are both responsible with money and ask if itís over $25. They send me $ to cover personal purchases, but mostly itís used for books and airplane tickets. (They both have essentially full rides so our monthly college spending bucket is pretty small).

Kris

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Re: first credit card for college kid
« Reply #8 on: September 16, 2019, 05:57:39 PM »
My suggestion: get yourself a new credit card. Add kid as an authorized user.

Tell kid that card is only to be used in emergencies. To give you a way to take care of said emergencies quickly.

Meantime, start using that card to buy your weekly gas for your car. Pay it off every month in full.

Four years later, kid has a credit record.

minimustache1985

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Re: first credit card for college kid
« Reply #9 on: September 16, 2019, 10:02:43 PM »
We helped DS open a credit card account when he was 17 & driving; we did not want him using a debit card to purchase gas. This card was with the same bank as his checking account; due to his age, I was also on the account. The credit limit was deliberately low, $500, no annual fee, and earned 1x cash back rewards. (Later on, this was replaced with a higher earning card.) DS was totally responsible for paying his card in full every month. I know parents who paid their student's card but this does not build financial literacy or responsibility. Because I was on the account, I could & did monitor it online, & DS knew that I would.
This is very similar to what my parents did- I had a low limit CC as a minor to start building credit, for which I was responsible to pay the balance, but my dad was on the card too and could check my account at any time (and did, since if Iíd been late it would affect his credit).  Highly recommend this methodology for the last few years of high school, and see no reason it couldnít work with a college kid as well.

While I donít have a specific card to recommend you donít want a high limit or a high interest rate just in case so that if they do need to learn about compound interest the hard way that it isnít a crazy expensive lesson.

chemistk

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Re: first credit card for college kid
« Reply #10 on: September 17, 2019, 06:23:14 AM »
My parents were always super duper leery of credit cards, so they never did anything in the way of helping me build credit. They were convinced that because I had utilities in my name during my 3rd and 4th years of college I would build credit passively that way.

I recognized the need to build credit at about the same time, so I opened up a Capital One Journey card on my own, without their input. Started with a $300 credit limit and after converting it to a Quicksilver card it's easily my oldest line of credit.


Cpa Cat

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Re: first credit card for college kid
« Reply #11 on: September 17, 2019, 06:43:01 AM »
My first credit card was a Commerce Bank card. They were on campus with a booth during the first week of school and approved me for a card with a $1000 limit even though I had no credit. No annual fee, which is important. I believe a free T-shirt was involved.

It wasn't a bad deal. I didn't carry a balance and it helped me build credit without a cosigner.

Technically, I still have it. Its rudimentary rewards program isn't competitive with other cards, so it's not in use.

Point being - it doesn't have to be a great credit card. Something basic with no annual fee and a low limit is perfect.

Ynari

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Re: first credit card for college kid
« Reply #12 on: September 17, 2019, 07:40:02 AM »
I had a "secured" card from my credit union (NFCU) when I started college (parents had nothing to do with it, parents are fairly anti-debt). Locked down $500 of my savings, gave me a $500 limit.

Honestly glad for the secured feature, it helped instill a "this isn't *free* money, it's spending the money I already have" mindset. In a few years the savings were unlocked and the limit raised, and I looked into other cards, but the lesson stayed. I helped my sister also set up a secured card when she was in college.

kbear

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Re: first credit card for college kid
« Reply #13 on: September 17, 2019, 10:23:57 AM »
Thank you for all the feed back. Didn't know student credit cards existed. He ended up signing up for the "Discover it" card. It has a low credit line, gives $20 if you maintain GPA over 3.5, but builds credit like a regular credit card.  He'll just be using it for books, scantrons, etc.

GizmoTX

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Re: first credit card for college kid
« Reply #14 on: September 17, 2019, 03:10:22 PM »
Suggest that he sign up at creditkarma.com for free monitoring & inexpensive tax filing. Then he should put a credit freeze into place with all 3 credit reporting agencies. It's now free & can be easily thawed when needed. https://clark.com/credit/credit-freeze-and-thaw-guide/