Keilexandra

I always thought that co-signed cards did count for building credit... my mom has told me that she'll co-sign on my credit card when I go to college, because my parents have a really good credit score and thus they'll be able to pass it on to me.

I'm sure she'd give me a card right now if I asked, seeing as currently for trips she just hands me her own card and tells me to sign her name (ssssh). But what's the point? Just more unnecessary paperwork; I don't have my own car or anything, so I don't have any regular expenses.

hj0519

Me and my brother got credit cards when we turned 16, our parents pay the bills until college graduation. I have a debit card that draws from my own money that I use more often. I use the credit card mostly for gas, textbooks, and food.

APOL

My understanding is that the rules have been changed, and that students under the age of 21 can no longer get a credit card without a co-signer over 21. As parents, we now have to decide whether we are going to co-sign for our children.
IMHO, we should be involved with helping our children learn the ropes of credit cards, credit scores, and taking responsibility for our actions. If my DD did not already have a card-because of previous regulations that allowed for that, I would co-sign for one credit card. I would explain that the card's payment would be her responsibility. If a purchase was for something I felt was my responsibility-ie-doctor visits, medicine, airplane tickets-then I would reimburse her for those costs with a receipt-which is what I do now, actually.
I hope this helps other parents thinking about what they are going to do in light of the new regulation. APOL

Yalemom2

^^ I found several websites that say that cosigning a card in the student's name does build a credit history, while just adding the student as an authorized user on your card does not (it used to, though). So, that's good news!
one website: Should dad co-sign credit card?

10smomlc

My 18 yo D was just approved for a Wachovia student credit card yesterday. $400 limit. This was after being denied from an online application elsewhere because of no credit history. Went into the branch of the bank she's had a savings account at for 14 years to open a checking account and fill out an application. Probably helped that she's been a customer for so long.

mamabear1234

I'm glad my 18 yo D got a credit card in her own name before this takes effect. She has a $1000 credit limit through the bank she has her checking account and debit card with, and she pays it monthly from her account. I have taught my kids about credit and how to use it properly. I guess I will have to co-sign for the next one when his time comes to get a card.

swimcatsmom

My kids are named on one of our cards and carry those cards for emergencies or things we are willing to pay for. They have never used it for anything other than what we have specified and fortunately neither of them think a 'want' is an emergency. I do have a friend whose daughter royally abused the privilege of having the father's credit card and it amazed me that he kept letting her keep the card. I like to think my kids do not abuse it because they are good, honest, sensible etc. They do also know us well enough to know the card would be canceled in an instant is they ever behaved the way my friends child did ('needing' 8 of the same skirt in different colors does not an emergency make!!).My son did occasionally use it, after asking us, for online purchases where a credit card was needed and sent us the $$ to pay for it. For some reason he did not get a credit card when he first started school though he has one now. My daughter got her own credit card in her own name the summer before her freshman year. She uses it and pays it off every month. At 22 My son has an excellent credit rating (in the 700s). Don't know my daughters but I imagine it is pretty good as she has the card plus pays rent and utilities regularly. I know she did not have to pay a deposit on the utilities in her name because of her credit rating, while her room mate did have to pay a deposit for those in her name (not a bad credit rating - just a lack of one).

If student cards were not available and the only option was to be a cosigner I would be a little cautious (admittedly I am cautious by nature). The risk with being a cosigner rather than the card holder is that you don't know what is going on, so if payments are not being made your own credit rating can get messed up before you are even aware there is a problem (when you are a cosigner anything that happens on that loan/credit card can affect your credit rating). My daughter actually did a consumer credit course and after she learned the ramifications of being a cosigner said she thought it was a very bad idea (yay for other people telling your kids stuff that just goes over their heads when you tell them!). We have drilled it into our kids about how important it is not to mess up their credit rating and it seems to have sunk in. Part nurture and part nature I think.

Really people would need to make a choice based on an honest assessment of what their individuals kids finance handling capabilities are. The friend mentioned above would be very foolish to cosign anything for her daughter as she is hopeless with money. I have another friend whose daughter refuses to have a credit card (her own or her parents) because she knows herself well enough to not be comfortable having one. Mom is having to insist she takes one for emergencies when she does study abroad next semester.

mdoc

My three oldest daughters (ages 12, 15 and 16) have credit cards with their names on them, but they're additional cards on our account. If I'm willing to give them access to my account, which has a very large limit, I'll be willing to co-sign on their accounts, which will presumably have a much lower limit. I'll keep an eye on them and pull the card if I think they're not being responsible, but I think they will be since they'll have a lot of experience using credit cards while under my roof. I didn't have a credit card until I was in law school and needed one to charge plane tickets to go on callback interviews. It had a fairly low limit and I didn't need a co-signer, even though I had no income. I guess they don't do that anymore if they're requiring co-signers

swimcatsmom

My 20 year old college student was quite put out to be notified that her credit limit was increased to $3,000 on her card. I guess it shows she is getting a good credit score but she doesn't think she needs a $3k limit. Thank goodness she is sensible with her card. I do know at least one friend of hers who would probably immediately go on a spending spree with the increased limit.

ellemenope

Thanks for the news, yalemom2.

TheresaCPA

debit card DEBIT CARD. We are teaching DD credit card responsibility by giving her a debit card with a checking account that we transfer a "limited" amount every two weeks. She can spend her funds on anything from ordering take out chinese , to groceries, to new pair of jeans. This was she learn she can only spend a certain amont and must make choices. If she spenda it all right away she has nothing left when she might need a new pair of shoes. Then she learns to save , wait to spend, limit spending, examine prices of goods and services and a lot more. It's a piece of plastic to her handles just like a credit card on line and at the store. DD has learned to look at her account online on a regular basis. That's priceless.

3bm103

IMHO the difference between a credit card and a debit card is that a credit card sends a bill which must be paid with a deadline. It's probably the only bill a kid will be responsible for. Once something is paid for with a debit card, it's over and done with. Both require that they budget, but young people should be taught how to know when a bill is due and pay it. There is nothing like having a trip to McDonald's in March due in April to make them think about what they spend their money on.

Yalemom2

RE debit cards - one other difference is that if you lose a debit card and someone uses it, the actual money is gone from your account. You should be able to get it back eventually by showing that it was used fraudulently, but in the meantime you're out the cash. If you lose a credit card, you just let them know and you are not liable and you have not lost any money.
We learned this the hard way when DS lost a debit card and was out $600 for quite a while. Since then, he uses an ATM card and a credit card, both of which he has managed to lose more than once, but it isn't a problem since the ATM card can't be used without a PIN.

silverlady

If the student is going to be traveling abroad while in college, it might be a good idea to have a co-signer, or someone who can be contacted in the US if there is a problem. When my DD studied in France one semester, I received a phone call from the credit card company stating that the card number had been used in Asia, and they wondered if hit was her. Obviously not, so they canceled the card. It would have been hard for the credit card company to contact her. I don't know if a credit card company would allow a contact person that wasn't a cosigner.

jym626

Both my s's started their credit card history with gas station cards that I cosigned (ie it was my card but I requested additional cards in their name). They used it to gas up the car and get minor snacks, etc. Even though the primary card was in my name, they did get credit for it on their credit history. So did the Upromise card that I have, and got one in each s's name when they went to college so they chould charge airline tickets home from school, book purchases, etc that I said I'd pay for in school.

Both also have had their own credit cards (not cosigned) since they were 18. They had work history with income, and Roth IRA accounts, showing savings, plus the good credit history with the gas station credit card and the upromise card.

Older s used a citicard that paid him a percent back on purchases. Younger s uses a USAA card (he got a second card but never uses it so I hold onto it for him).

Older s built up a nice credit history, between his cr cards and bills that were in his name when he lived off camus in college. When he went to buy a car at 22, he had a credit score in the high 700s.