College Loans
Don't go getting on your high horse just yet. Your son or daughter just might be responsible enough for a student credit card if you will only give them a chance. They have to learn about finances one day don't they?
Student Credit Cards Might Have a Lasting Impact on Your Child
A College Education is Fantastic - But a Student Credit Card Teaches about Life and Finances
Raising children presents parents with a huge responsibility. We have to take them from childhood to becoming young adults. This is never more true than when we send them off to college.
From Whom and Where Should They Learn Life Lessons and Financial Decision Making?
Unfortunately many people do not take this responsibility very seriously. There are many children that get very little guidance from their parents so they turn to others or rely on themselves. If being ready for the parenting responsibility was a prerequisite to having children I think the world population would be quite small.
Learning Life Skills and How to Handle Money
I know I am not a perfect parent but I have taken the job seriously. I want my children to know many life skills prior to going off on their own. I have taught my two sons and my daughter how to cook, clean, shop and manage money. We have had a great deal of fun in the process.
I have also taught the
children the importance of being a good member of
the community. When my oldest son was a
senior in high school he started receiving
applications for student credit cards.
Considering Student Credit
Cards
Gut Feelings about Credit Cards for Students
My first impulse was to throw away the applications. Then I realized that the student credit cards would be a convenient way to make sure that he had the things he needed and it would also be a great lesson in financial management.
We sat down and looked at the services of the different companies offering student credit cards. We picked the two that had the lowest interest rates as well as a monthly spending limit. He filled out the applications for both and I cosigned them. He was accepted by both companies and received his student credit cards.
The Responsibility of Possessing a Student Credit Card
We talked in length about what the student credit cards could and could not be used for. He had a scholarship that covered tuition and books. He was involved in a part time job on campus that would supply him with some spending money.
How to Use Student Credit Card Money
The credit card was to be used if he needed repairs on his vehicle as well as gas, to pay medical co-pays, and to pay for unexpected bills that may come up. The spending limit per month was five hundred dollars.
Determine What You Will Pay and What Your Student Will Pay
We agreed that his father and I would pay up to two hundred dollars a month on the bill and he would be responsible for the rest. This would amount to the allowance that we would have given him in cash. Anything over that amount he was responsible for and the bill needed to be paid off each month so that he was not paying the interest rates.
An Established Credit Rating with Student Credit Cards
It is nice to know that he can cover the costs of emergencies and so far he has been very responsible in sticking to the guidelines that we established for him. By the time he is out of college he will have an established credit rating and should qualify for lower interest rates of a regular credit card.
So, it's really up to you and you understand how your child is at handling money. Consider these facts carefully before handing over a student credit card to your son or daughter. If you are uncertain, proceed with caution until the trust is developed.
Student
Loan Interest Rates - The Good, The Bad
& The
Ugly -
Getting a school loan may not be much of a problem
for you but pay close attention to the student loan
interest rates so you don't get caught in a bad
financial situation further down the road. You want
to FINISH college, don't you?
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Debt and Finances for College Students