<p>We are beginning to address the nitty gritty of paying tuition, and providing DD with spending money.</p>
<p>Should she get a “college credit card” in her name (presumably with us co-signing), or should I get her on my card as another user (will that build credit for her?).
As background - she will only be 17 when college starts, and she will need to be able to order clothes, books, etc online, particularly 1st term. Also we, the 'rents, need to upgrade our auxiliary credit card (Amex), but have been putting this off because of her. Finally, she has an account with USAA where we put in money periodically, and it works like a credit card for her, for gas etc. - I think we can convert that into a regular credit card, but have not researched yet.</p>
<p>I’m curious to hear advice about this too. Also, I’d love to know opinions on credit vs debit cards. I’ve told my d not to sign up for anything just to get the “free gift”.</p>
<p>We weren’t able to get a credit card for my son even when we offered to co-sign, at least not through our bank where he has a separate student checking account. He’ll be going to another school next year, so we’ll have to see what they’ll do. </p>
<p>In the mean time we got him a card on our account for books, etc. just as you intend. His ATM card is a debit card and he can turn his student ID into one through the school. We’ll probably stick with a card attached to whatever student account he winds up with and transfer whatever spending money he’s going to have to it. </p>
<p>We’ll talk about that this summer, but I imagine the difference in using the two would be whether we expect to pay for something (use our card, we get miles!) or expect him to pay for it out of his own money (use your debit card). We pay the cards as soon as they’re due, so hopefully he’ll learn that from us.</p>
<p>I’m pretty comfortable with the way he manages his money, so I’d prefer he had his own account and was building a credit rating. I’d also prefer that he not sign up for anything until we’ve had a chance to discuss it with him. He’s old enough to make his own decision, but I’d like to make sure he’s making an informed one.</p>
<p>Debit cards don’t build credit. I found that out the hard way.</p>
<p>As for credit cards - some parents put their (responsible) kids on their own cards, which has the benefit of transferring over the parent’s entire credit history to the kids. So when a credit check is run, the kid will have 30 years of sterling credit, despite only being 18. </p>
<p>AmEx has a thing where you can add someone for $35/year to your card and get bonus points (I have the AmEx gold w/ rewards points). Could you try that? </p>
<p>If you think your D should have her own card, get a Visa/Mastercard with no annual fee and a low credit limit, such as $500 or $1,000. CapitalOne has them for students, and they work well. The only problem is that books or a plane ticket can cost more than $500. I was 20 when I got mine, but did not require a co-signor. That might be different if the person is under 18 (as minors are often not legally responsible for their purchases). </p>
<p>IMO, the difference between putting your D on your own card or getting her a credit card in her name only is a personal decision. Both can work well, but it depends on what you are comfortable with and her own personality and responsibility. Some kids also might prefer the independence of not having Mom and Dad see every credit card purchase. Again, I think that both can work well.</p>
<p>my daughter had a work study job with which she paid all her school expenses- books/entertainment/clothing after freshman year fall semester.
For freshman year fall semester- we ordered many books used online- a great cost savings even with the school bookstore as just her freshman hum class had 18 books in the required list & her major biology- has expensive texts due to color plates etc.
We also- if she has unusual medical bills- she has high medication fees for instance- will send her money if she remembers to tell us- she doesn’t usually.
She has a debit card- hasn’t had any need for credit card. She does have a credit history however- as she paid for her own laptop through an Apple loan account which she paid off in less than a year.
I realize some students need a card- but she has been able to get along without one.</p>
<p>I’ve had two cards for a long time now, and I have to say… they’ve been a Godsend. Now, I’m a different situation than most (my family doesn’t pay for squat), but I believe that building credit is very important early on. </p>
<p>For instance, with my above-average but not stellar credit, I was able to finance a laptop with no interest for 18months, and pay it off in 6 instead. It’s a great feeling to walk out of a store and know that a business will take that kind of chance on you (yeah, I know the implications, but it still feels good.)</p>
<p>AmEX will not allow kid to have card with their name on it (even if your account) until age 18. We had gotten him a card on our VISA account several years before. Added the AmEx when he turned 18.</p>
<p>On this board, I read that an auxiliary card in child’s own name on parent account helps build good credit rating for child. I was surprised, but checked our S’ credit score on-line (just an estimator, we don’t have free credit repts yet in our region). To my (pleasant) surprise, he does in fact have an excellent credit score.</p>
<p>So we are in no hurry to open a separate account for him. Only reason to would be for him to pay bills directly. So if sorting out bills for his charges that are for things we don’t cover becomes a hassle, we may do so.</p>
<p>Decided, also, based on info on an old credit/debit card thread, that the debit card is not a good idea due to them letting a kid go over limit and charging a $20+ fee each time. Imagine a girl at the mall, charging shoes in one store, blouse in another, purse in another etc., unknowingly over limit, and hit with $20+x 3 or more penalty charges! With a credit card, if you are over limit, the charge won’t go through. With a debit, apparently, they let it right through and love those revenue-boosting penalties!</p>
<p>My children both received a credit card in their name, on our account when they turned 16 and were driving. They used this credit card for gas, shopping, or anything else where they didn’t write a check or cash wasn’t used. We went over the statement at the end of the month or online twice to see what was charged and what they needed to pay us back for. Sometimes we would get a charge for movie tickets or dinner that was suppose to come out of their money. I have heard several times, “I didn’t have any cash so I charged it!” After a few of thise they wised up that mom and dad were not paying for movie tickets or bowling!!</p>
<p>At the age of 18 they get a second credit card, this one in their name only. The bill still comes home, but this card has to be paid by the student. The parent’s account can only be used for gas, school books, airline tickets ot anything else that mom and dad have agreed to pay for. The student account gets the movie tickets, dinners out, or other things that we don’t think of as necessary. This has worked out well for our kids and allows them to build credit and learn to manage a credit card. Of course, if we needed to help out we would if they got in over their heads, but I don’t think that will happen. I will need to keep a better eye on my daughter who thinks every item of clothing is a necessity; when it is her own money she doesn’t seem to buy as much.</p>
<p>Two years ago, when 17 year old S started traipsing the world on GAP year, we got a credit card through our bank, naming our S as a joint holder. He is the only one who uses that card. </p>
<p>I use the online services to check on his spending. He was highly responsible for 18 months and not so responsible in the last six months due to gf pressure–which he seems incapable of resisting.</p>
Not true at all – if you have a good record for making payments, they definitely will allow an overlimit charge through, PLUS charge an overlimit fee. I was reminded of that myself, unfortunately, when I decided to charge unanticipated car repairs to a card that was carrying a balance because of its introductory, 1-year 0% APR. I think the overlimit fee was about $30, but it could have been more.</p>
<p>I’m not sure, but I think you might be confusing the distinction between a garden-variety ATM card and debit card with a Visa/MC logo. I don’t think you can get a dime with an ATM transaction beyond what is actually “available” in the bank, unless the account has some sort of overdraft protection assigned to it (which in turn also has a fee, but usually those fees are far less).</p>
<p>Cangel, when he left for college he got his own credit card through USAA. I don’t think we are co-signors. I think they have a whole program with credit card/checking account/savings, etc. He already has a savings account at our bank and a checking acct. at a bank on campus, so he just went with the credit card. I can’t remember what the limit is.</p>
<p>USAA actually makes it very easy to get a credit card for a college student. The credit line is according to year in school. If I recall correctly, it’s $250 for a freshman, $500 for a sophomore, and so on. Although they just increased my junior son’s credit limit to $3000, so he’s obviously building good credit.</p>
<p>The good part is you can view the account online, and pay it from his existing savings or checking accounts.</p>
<p>Keep it coming - this has been helpful. Based on your input, and Clark Howard and that credit card comparing site, what we may do is open her a bank account of course, put money into her existing card for coat, boots, etc, all the cold weather gear. Then put her on the Amex and upgrade it when she turns 18, or convert the USAA card to a regular USAA credit card. Now I need to find out if she can use her USAA card online.</p>
<p>I’m always surprised at the number of posters who are insured through USAA. Are all of you veterans/married to veterans, or is it through your parents? My H was in the Army (as well as my dad and FIL).</p>
<p>Once my D started driving, I got her a spare credit card for emergencies. It was a good way to see how she would deal with it, and I must say, I was tremendously surprised! Nothing besides gas on it unless she asked first. She has gotten many offers of cards since her name went on the account, and we will be getting her a separate account through my company for school.</p>
<p>Yes. She can use her USAA card online. Or anywhere else. As someone else said, USAA has a whole program for college kids. Does your student receive their magazine? Very usefull stuff none of my kids will read.</p>
<p>My second son had a credit card since he was sixteen. One of those aimed at teenagers. I believe we had to cosign, but the details are fuzzy now. When he was in college and wanted a card with a higher credit limit, he tried having them raise the limit (always paid the entire amount on time for four years). They refused. Other companies wouldn’t give him one either. “No credit history” So we looked at USAA. They gave him a card in his name with a $750 limit and raised it less than a year later to $3000. He has also started receiving credit card offers in the mail.</p>
<p>Once we started looking at options for our son, we found a good assortment of offers. Both our main frequent-flier card and our son’s college offer student cards with a credit limit in the mid-hundreds. We also have a cashback card offer from Amex Blue sitting on the table. </p>
<p>Our priorities are that the card is in the child’s name - he is thinking of going into high-level finance, so he better be able to handle his own credit card! I am against debit cards because I have heard that they don’t offer the same protection as credit cards if they are stolen. The cashback vs. FF miles vs. school endorsement probably won’t matter much considering the low level of usage. The last consideration is making sure he can pay the bill with an online transfer from his money market account; he won’t have a regular checking account. Still trying to fit the card offer to the user’s style; I may let him read all the fine print and decide for himself which offer makes the most sense.</p>
<p>Many banks offer the same - or better- protections agains a stolen debit card - so that’s just something to check with the bank. However, one downside of the debit card is what happens in the interim before the matter is cleared with the bank. There could be delays before the bank replaces the money taken with the debit card… and in the meantime it might also lead to bounced checks and attendant fees, which the bank probably would not rectify.</p>
<p>I got a capital one student card when i was 16. I got it right after I got my license. my parents had to sign for it, and once i turned 18 i got a letter saying that they were no longer associated with it. every year or so my credit limit goes up on it, and i have a great credit rating because of having the card.</p>
<p>cangel, we added both children to one of our credit cards when they got their driver’s licenses (initially for gas, emergencies) and continued that arrangement when they left for college. It was and is a good way for us to be aware of their expenditures, which are primarily for books and school supplies but are occasionally for clothes and other items we thought they were paying for themselves out of allowance or earnings. So it is informative to have them on your credit account–a helpful way to keep track of expenses while they learn financial management skills and, I gather from earlier posts, build up decent credit ratings. Both children also have debit cards on their own bank accounts; when son was in college he had a local bank account at a small bank in the town where the school was and we used to mail deposits to it; daughter does not have a local account at school but rather one at our home/local branch of a large near-national bank. It is very convenient because we can make deposits in her account at our local bank and have them reflected in her balance right away, so no delay when she needs to write a check or use her debit card for a purchase or to get cash. Our bank happens to have many branches close to school so her lack of local account in college town isn’t an issue; she can deposit checks or cash from babysitting etc. at any branch.</p>