nunofyurbeesknees

my d will be starting college this fall so I welcome any and all advice. I'm trying to decide whether to get her a credit card or debit card. One article I read strongly suggested debit because kids can go alittle crazy with the credit cards. What do you think?

somemom

A credit card can be fine for emergencies, with a low balance- it'll help her learn to manage credit and to build a credit rating. My DD did not get one until the 2nd year & is ready to hide it from herself, as she thinks they are dangerous, but she has paid her bill on time every month and is learning a lot in a semi-safe way.

Debit cards are a great way to access your bank account instead of checks. we did only debit for the first year.

mackinaw

Debit cards may limit what you can do.

A week ago, as I was temporarily stuck in a regional airport because my connecting flight home was cancelled, I just went to the rental car desk and rented a car for the remaining 75 mi. travel home. I had to wait in line while a young lady -- college student -- tried in vain to get around the fact that the rental car agency would not take her debit card (despite its "Visa" logo) so that she could do the same thing. To rent she had to have a credit card.

I don't know how common this kind of problem is, but I think it's very helpful for students who may have to make emergency purchases of one kind or another -- in particular travel -- to have a definite credit card line of credit that they can call on.

Both of my kids had credit cards in college. I saw no particular value to giving them a debit card. They could use their ATM to access cash.

MotherOfTwo

My son has a debit/atm card on his own checking account at his bank at college. This account started with the spending money he brought from summer earnings when he started college, and he has added his earnings from working part time during college and in the summers. This card can be used to get cash and also to pay for things at most places where a credit card can be used. He also has a credit card which is another copy of the VISA for mine and my husband's account This is for emergencies or, if for some reason, his own debit card does not work. I think it is important to have this extra card for unanticipated expenses and also because cards can be inactivated by the bank for security reasons, as happened to my son this fall.
As Mackinaw said, car rental places usually will not take debit cards. However, they also almost never rent to people under 25 years old, so even if the young lady had a credit card, she may not have been able to rent the car.

fendergirl

MotherofTwo, I have rented cars and I am 22. I'm actually going to pick one up on Saturday morning. We rent them every year to drive to Florida. Have to be 21 here.

I got a Debit card when I went to college and opened up a new bank account at home.

I've had my credit card since i was 16, so i have 6 years of great credit history to my name.

MotherOfTwo

That's very interesting that you were able to rent a car. Was it from a major rental company or a small local one? When my son needed to rent a car last summer (he was living and working far from both home and college), he could only do it through an arrangement his employer (a large company) had with Hertz or Avis or whatever. He was not 22 though, he was under 21, but it was my understanding that you had to be even older than 21-22 to rent. For the first few days while he was in the city getting set up before his job started, he rented from a small local company, but had to pay a surcharge for his age. This was the only company in the whole, rather large, city which would rent cars to young people.

zantedeschia

Why can't you get one that's both a credit and debit?

archermom

Agree with Mackinaw. D has an ATM that also doubles as a debit card. She also has a credit card that links to our account for emergencies. It has worked very well.

fendergirl

We're renting one car from Enterprise, and 3 van's from somewhere else , I'm not sure of the name, but both places rent cars to drivers who are 21. I had to fax them a copy of my insurance information and a copy of my drivers license, but that's it. Also over the summer at work, we have a lot of international workers, and they rent cars from Enterprise to take trips, and most of them are 21-22ish.

alwaysamom

I think it may vary state to state but people younger than 25 can rent cars in many places these days. I think a credit card with a limit of maybe $500 to start is a good idea. It's also good to have it in the student's name and not just an extra card for them on your account. Have them make small purchases and pay the bill off in full each month. It's a good way to build a solid credit rating. Our two older girls have done this with no problem and D3 will do the same when she goes off to college in the fall. Emergencies do arise and a credit card may ease the unanticipated situation.

jmmom

I believe that the appeal of the debit card, car-renting issues aside, is that is limits the "hot water" that someone can get into by going overboard with spending.

However, I believe that our kids will get solicited (and may accept) credit cards once they arrive in college or sometime soon thereafter. So I believe it is never too soon to inculcate good credit habits. We have tried to instill in S that a credit card should be used as a convenience and safety to avoid carrying lots of cash and only when the "money is in the bank" to pay for whatever is charged.

As I mentioned on another thread, what has worked for us is as follows:
S has had a card (additional card on our account) with his own name on it since about age 15. He has been allowed to use it so long as he forks over the cash$$ to us immediately upon each use. To me, that teaches him, better than a "talk" could, how responsible credit works. For those going off to college in August, I would say it's not too late to try a similar approach starting now.

Not sure when he'll have his own credit card account, but I am hoping - and think I've seen the evidence in his behavior so far - that this baby-step approach will create an individual who won't use credit to spend $$ he doesn't have.

fredo

Well, my daughter has three cards: a debit card on her own checking account which she opened when she began working at age 16 (she manages this one on her own and after a few $26 overdraft charges, learned her lesson and has managed not to be overdrawn anymore). She also has a card linked to our main credit card account for those emergency times e.g. car breaks down and other items that we cover e.g. school books, prescription refills. She also has her own, very limited ($250 limit) credit card. She is pretty much deathly afraid to use it because she doesn't want to run up any late or interest charges but I've actually had to encourage her to use it just once to establish her credit. The problem is I think she used it once and I'm not sure where the bill went! I think it might have come to our home but knowing me, I tossed it out without opening it thinking it was junk mail. I might have to investigate that one.

dt123

You have to watch this. Our bank set up S's debit card so that if he tried to debit more than he had in the account, the transaction would go through, but he would get a $29 overdraft charge. After a miscalculation, he ran up about four of those in a row charging $6 fast food meals and drugstore purchases. We complained to the bank, and it was revealed that an option is to have the transaction simply declined if there is not enough dough in the account. We switched to that option, and the bank reversed the overdraft charges. S is more careful now.

The contrast between the way S handles his money and the way I did it "back in the day" is amusing. While S theoretically has a checking account, he never ordered any checks or deposit slips and does not have a register. He does not know how to write a check. He has his work study paychecks directly deposited, monitors his transactions and balance online, and uses his debit card for purchases and ATM cash.

emeraldkity4

I understand the appeal of a credit card. However we have not had one since we needed to have it to pay medical expenses that were not covered by insurance. Insurance never did cover them and ended up paying high interest- only got it paid off few years ago.

Daughter has credit as she made payments on a new powerbook for school through Apple.
We also have credit but really don't want a credit card, don't rent a car, dont go any where , where we would need to.

heidi

What credit card companies will allow your pre-eighteen year olds to have a card under your account? I have an American Express and they won't let me get a card for my kids [my account, card with their names on it] until they're eighteen.