Creditworthy? Advice for parents as students hit the road with their first credit cards
As the fall semester draws near at area colleges and universities, the Kansas Credit Union Association offers advice, below, to parents about students and credit cards.
Q: Should we allow our college-aged children to get a credit card?
A: Using a credit card wisely is a good way to build a credit history but stress that all credit cards are not the same. Encourage them to carefully scrutinize any credit card offers they receive.
Q: What’s the best route to take?
A: Have them enroll for only one card, use it sparingly for key expenses and commit to paying the monthly bill in full. Consider applying for a joint credit card with your student – that way, you can monitor the spending activity and step in if things start to get out of hand.
Q: What lessons should we stress?
A: Make sure they stay on top of due dates for their bills. Have them keep receipts and balance their accounts regularly. Help them understand that late or missed payments, along with bounced checks or overdrawn balances, can damage their credit history and make it difficult to get a loan for their first car or home.
Q: What if they get into a bind?
A: Establish ground rules about how much financial assistance you will provide before they leave home – and stick to it. If they need extra help once in a while, that’s fine, but don’t make it a habit. They need to learn on their own. Statistics show having a good understanding of financial skills is critical for college-bound students
Q: What else do parents and their credit card-holding kids need to know?
A: Stress the importance of protecting personal information. Identity theft is on the rise, so teach them common-sense monitoring: review statements each month and report suspicious charges; protect all passwords and PINs, and never share them with others; shred receipts or papers containing personal or financial information, including pre-approved credit card offers. If you pay bills online, only send payments over secured networks.