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A Parent’s Guide to Student Credit Cards

Author: Julie Myhre-Nunes / Source: nextadvisor.com

When it comes to personal finance, everyone has an opinion, so it’s no surprise that most parents have preconceived notions about student credit cards. Whether you think your student isn’t ready for a credit card or they shouldn’t have one until they have a full-time job, the fact of the matter is that college is the best time for a young adult to start using credit. Don’t believe us? Keep reading our guide to student credit cards to learn why now may be the perfect time for your college student to start building their credit history.

Why your student should get a credit card

1. Credit is essential for post-college life. Credit impacts nearly every part of an adult’s life, including a recent college graduate. From applying for an apartment to getting their first cell phone plan, credit will help determine whether they will be approved for something or how much they pay for a service. Since that’s the case, it makes sense to help your college student start their post-grad life off on the right foot by encouraging them to get a credit card now, especially since a number of college students are afraid of credit. In addition to encouraging them to open a card, you’ll also want to explain to your student how they should use the credit card responsibly — after all, there’s no point in them getting a credit card in college if they only use it to destroy their credit.

2. Student credit cards are designed for students. Although you may be hesitant to encourage your student to apply for a credit card because you worry they will either receive a credit limit that’s too high for them to manage or they’ll be unapproved for the card, you don’t have to stress as much with a student credit card. That’s because student credit cards are designed for students, which means these cards not only have more manageable credit limits, but they also are available to those with fair, limited or no credit history. In fact, many credit card issuers see college students as a better credit risk than a young adult not in college, so oftentimes student credit cards have more favorable terms and better perks than credit cards available to someone with fair or limited credit.

3. Your student will be covered in an emergency. Probably one of your worries as a parent is that your child will find themselves in a financial emergency and not be able to fund the emergency. While you might be thinking that you’ll send your student money if they ever need it, it’s not rational to think that you will be able to do this for every type of financial emergency. For example, if your student is driving home at 1 a.m. and they get a flat tire, they may not be able to reach you and, as a result, find themselves stranded. One of the easiest ways to make sure your student has an emergency plan is to encourage them to get a student credit card. Keep in mind, that just encouraging them to get a card isn’t enough, as it will do them no good in an emergency if the card is maxed out. Instead, once they get a credit card, help them learn how to use it responsibly by monitoring their use (do it with your child via phone or in person so it doesn’t look like you’re trying to spy on them) and making sure they understand that money spend on a credit card must be repaid. You may also want to provide them with real-life examples (if you have any) of how credit used irresponsibly can land them in debt.

4. Credit cards offer more fraud protection. Many people aren’t aware, but a credit card offers more fraud protection to a user than a debit card does. In fact, if your debit card is used for fraudulent transactions, you may be on…

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