<p>I’ve been seeing “credit cards” mentioned in the same breath as “college student”. Can anyone explain to me why my son should have a credit card? He has a debt card and that seems to be working just fine.</p>
<p>For me, it was peace of mind that my kids could use the card to get out of any emergency situation they might find themselves, like if they had to buy a plane ticket or were in a vehicle that needed to be towed or repairs. It also helped them build credit by being an authorized user on an account that I shared with them. They were very responsible and NEVER used the card without getting my permission beforehand. It was something that my folks did for us decades prior and I thought it worked as an inexpensive “insurance” for H & my peace of mind.</p>
<p>Have heard of other posters and parents who have had kids who were not as responsible with using their credit cards and had to take the cards back and get the kids to repay them for charges the parents did NOT authorize or agree to. Much depends on the relationship between the kid and parent, whether they want to journey down the path with the temptations that credit cards can offer. We did tell the CC company that we wanted a lower limit than the other cards we hold and specified the dollar amount. We had one kid per credit card we opened with them. It did boost their credit scores, as each of them had no trouble getting a credit card on their own; D has a card on her own (Costco AmEx) even though she has no job and no income other than whatever mom and dad give her.</p>
<p>Both my kids have followed our example and pay off balances in full as soon as they are posted or as soon as the paper statement arrives, well before any interest or penalty accrues. We have the statements come to our house, as they switch addresses/move and we don’t want any statements to get lost in the mail. </p>
<p>Having a credit card (or 2) will help boost their credit scores and increase the number of lines of credit to their name, which will help them down the line–I only had 1 credit card at the time of taking out my first auto loan and my interest rate was bumped up 1%, despite having an excellent credit rating. </p>
<p>But, if your kid is liable to, say, use the CC to go on a shopping spree…then maybe not the wisest decision</p>
<p>For someone who does not have issues with running up excessive charges on credit cards, they are preferable to debit cards. Fraud on a debit card causes your money to be missing while it is being investigated (possibly causing your checks to bounce), while fraud on a credit card causes the bank’s money to be missing while it is being investigated.</p>
<p>Debit cards- no recourse if someone steals from you. Credit cards- usually can get unauthorized charges dropped, have the credit card company investigate the fraud. Son should have gotten a credit card sooner to build up his score. We let son have one with our account when he was doing online grad applications but a few fast food purchases snuck on it. Good use if bills paid in full every month. Paying interest- be sure kid knows what it is costing him/her (never you).</p>
<p>My kids have an additional card on my credit card account. This has a couple of benefits. First, this particular card (Barnes & Noble Chase) breaks down the charges by each user–so I see exactly what they’re spending. Second, I get all the rewards points. My son now has his own credit card that he’s using more and paying off himself.</p>
<p>Some credit cards offer some great extra protections–90 day loss or theft protection, price guarantee, extended warranty, CDW for rental cards, ability to challenge charges and get full refund for non-performance, etc., and sometimes even cash back or other bonuses. As previously posted, neither kid has ever had any problems with responsibly using our CC (or their own CC or debit cards), so we had no anxiety and they continue to live debt-free.</p>
<p>I believe my sibs also gave their kids CCs as authorized users when they went to college, as “insurance.” It depends on the kid and family as to how comfortable such arrangements are for everyone.</p>
<p>On the advice of my banker, my daughter got a credit card after her freshman year in college. It has a very low credit limit and is helping her to establish credit. She also has a debit/ATM card linked to her checking account. </p>
<p>S had a card on my account during college and used it responsibly. However, he had trouble renting his first apartment since he hadn’t had credit in his name previously. We changed tactics with D and got her a card in her own name during junior year of college to help establish credit. @ucbalumnus and @wis75 have summed up the fraud issues nicely.</p>
<p>My debit card has the same protection as a credit card. </p>
<p>As the above posters mentioned, having 2 cards is a good option. One card was part of my Amex. Son’s charges were listed separately. When 18 or 19, he needed a new computer. The Apple store called me for approval, which I don’t know was store policy or Amex policy. He still uses this card but always asks permission. After finishing a major project, I would tell him to go out to eat, on my Amex card. </p>
<p>Both of our kids have their own American Express card that is linked to our account. They use that for items we pay for, such as bus ticket home, doctor’s appointments, activity dues, and some mail order items. They are very responsible, and only use it for pre-approved purchases.</p>
<p>I should note, however, that they had theses credit cards before they left for college, so there was a precedent set on using them responsibly.</p>
<p>In general, debit cards offer fewer protections for the card holder than credit cards. In general, banks like to push debit cards because they are a better deal for banks. </p>
<p>We gave our kids credit cards from our account (Capital One) and it worked well for all involved. </p>
<p>Our daughters had cards from our credit account and used them only for emergencies. because some rare times they needed more than they had in their checking accounts - a car repair for the PA student who had to have a car to get to clinical sites, or new meds after an ER visit for her sister with asthma. </p>
<p>For their everyday expenses they used debit cards to access money from their own earnings.</p>