<p>I think it’s better for youngsters living on a tight budget to use cash for daily expenses, because that really helps with discipline. There was a time that money was very tight for me and I had managed to run up large balances on my credit cards – my first line of defense to get out of debt was to put away the cards and rely only on cash or checks. This is especially true for kids who tend to be impulse spenders – not so much an issue for the tightwads. </p>
<p>However, it’s also important to establish credit early - and your credit score is determined partly by how long you’ve had a card. My son had a credit card that he got at age 18 – but he made the mistake of closing when he was in his mid-twenties – and then found that his credit had plunged. (That wasn’t the only issue, but it was a big part of the problem). My daughter had a credit card in her own name at age 8 (she filled in one of those offers and mailed it into a major bank without my knowing, and we were all surprised when it showed up in the mail). I made her put it away and told her she could use it once a year to buy a holiday gift for herself or a friend – and then I would pay the card to keep it in good standing… I started to allow her to use it more when she was 14. By the time she was in college they’d increased her limit, and that card allowed her to finance her multiple trips abroad. Once she graduated and had a real job, she already had excellent credit established – so even in her early 20’s she had a pretty high credit limit-- and I would assume a very strong credit score to go along with it. Because she loves to travel, that really comes in handy. I also know that she has a very nice computer that she was able to purchase using cash back rewards. </p>
<p>I think someone with a steady income and good discipline and payment habits should definitely put most purchases on a rewards card – the banks don’t pay any interest on savings any more, so you might as well take advantage what is essentially a reverse form of interest, by earning money back on what you spend. </p>
<p>(I think the credit card companies are hoping you’ll fall off the wagon and run up a balance you can’t pay off in a month – so the cash back offers are really only good for people who know they will always be able to keep up with the payments.)</p>
<p>An important part of having a credit card is establishing the discipline and good habits that will make the card useful – that can’t happen if the card is in the parent’s name and they take care of the payments. Even back in the day when I was paying my daughter’s card for her, we’d go over the bill each month when it came in so she was aware of the process. </p>
<p>Had two more instances come up this week where I needed cash for tips - the car wash and nail place. And yes, like jym626, if we stay at a hotel, we leave a few bucks on the pillow for the maid - also, valet if we use one. Airport if we use curb check-in. Don’t get me wrong, I use my credit card for absolutely everything I can, but there are just instances where I have to have cash, so I could never go cash-free. If I went to any activities at the high school (athletic or performing), I’d have to pay for tickets with cash since they don’t take credit cards. </p>
<p>I try to carry a minimal amount of cash because it seems to disappear faster for me than a card will. I’ll use cash in vending machines or for little purchases that I wouldn’t have made with a CC because I feel ridiculous swiping a card for $2.50. I do make a point to get cash (in singles and fives!) when I’m traveling to cover tips for housekeeping, shuttle bus, bell hop, etc. There is one really fantastic diner near me that is cash only. I have to remember to get cash before going there. If I have a $20 bill it lasts a long time, but once I break that twenty, it just disappears fast. </p>
<p>I also avoid using my debit visa for things like hotels and car rentals for the reasons people have cited. I believe it’s $300 that car rentals want to hold and nicer hotels will try to hold $50-$100 per day in case you charge things to your room. That usually happens when I attend sorority conventions and it is ridiculous because we are scheduled from 8 am til 10:30 pm every day, meals are included, and there is no time to charge anything to the room anyway!. </p>
<p>Our S didn’t get a CC in his own name until he graduated from college and had a full-time job. He also has an excellent credit rating–700s-800s and has never had trouble getting any CC he wants, with all the bonuses. He’s gotten several plane trips from his signing bonuses with CCs, as well as cash and whatever else strikes his fancy. He is VERY disciplined with his CC and prefers it greatly over cash, so he can have a paper trail of his expenses for his business (he buys and resells a lot of things). [In the spirit of full disclosure, we did add S and D to our CCs when they began college, so probably our good credit may have added to their record; both H & I have credit scores over 800.]</p>
<p>Neither H, I, S or D likes having much cash in hand, though H & I do take out some cash every month for incidental expenses that we choose not to put on credit cards. My kids both use ATMs if they need cash that they don’t have on hand.</p>
<p>My sister gets a bit of cash when she charges things at the store–about $20 extra, just to have some cash. She says there is no cash advance fee and it’s easier for her than going to the bank.</p>
<p>I do have to say that even though I use my credit card for just about everything, I also always carry at least $40 cash, more when traveling. Mostly as a safety net – though also when traveling I tend to run into more situations that require cash. </p>
<p>When we travel, we always carry at least $100-200 apiece in cash, as some shuttles and other transportation only accept cash, as do some of the less expensive venues where we like to eat.</p>
<p>I feel naked without a little cash. I tip drivers and small tips at coffee and food places. Sometimes you never know when you’ll need it.</p>
<p>My kid has managed to have a high credit rating just based upon being an additional card holder. Wish my score was as high. As far as renting in NYC, if you have a high income and no debt, they seem not to care if you have a card or not.</p>
<p>Just seems like a waste not to get bonuses for spending money. We get so many free tickets.</p>
<p>Am traveling now. Use cr card as often as possible but the one that doesn’t charge a high fee for international doesn’t have a chip and sometimes their machines can’t read it. </p>
<p>I just paid my CC by phone, as we do every month and asked them to send the check for cashback. For charges over the past two months, they’re sending us a check for nearly the price of an airline ticket we recently purchased! Woot! I love getting checks in the mail!</p>
<p>Calmom, we had gotten CC offers for dead relatives and our minor kids for many years. Still are getting CC offers for D, who has no income or job. </p>
<p>But is that legal? Will they give you a credit card if you don’t have a source of income? Don’t you have to sign something in the application saying you are age XX or older, and this is your income? Not too adorable if you lie on the application, whether they sent it to you or not.</p>
<p>I am curious if my youngest kid would be eligible for some of these credit card offers. He’s a student, doesn’t make much over the summers as a camp counselor, though will hopefully make far more this summer at an internship. But he doesn’t have the job yet. I am sure his credit score is good, as he’s been a co-signer on our cards for years, and for some weird reason that transfers to his credit. Do you have to have an income to get approved, anyone know?</p>
<p>They ask on all the apps I’ve seen what your income is. You can be denied if they deem the income too low, as I was denied for a CC, even tho my credit rating is near the max because the income I earn from my employer is too low (glorified paid volunteer making a bit over $1k/quarter). If there is a lie on your app, you could be prosecuted for fraud. Doubt they’d chase a minor, as long as no harm is done. </p>
<p>It should have been caught if the applicant was honest about date of birth and card and credit should have been denied. Am surprised she knew her SSN at age 8, since that’s commonly asked in applications as well.</p>
<p>Minors don’t have legal capacity to contract, so if she ran up debts and didn’t pay, CC may have been stuck. </p>
<p>Perhaps that is one of the reasons they passed credit card reforms in 09. I know they really targeted young people but I don’t think they were targeting THAT young! </p>
<p>Yes, I doubt they are trying to hook you when you’re only 8! I can see them overlooking someone’s DOB (stupidly), but overlooking income also? That’s incompetence at its worst.</p>
<p>Actually, the computer program should absolutely have caught the DOB; even I could have written a program to flag that back in the 70s when I was in college. Assuming the kiddo was honest, there’s NO way the card should have been issued at all. </p>
<p>Personally, I find it creepy, not adorable that it was issued (fortunately no harm appears to have come from it).</p>
<p>They vary. And, you can always get a secured card with a low limit if you just want a card for emergencies. S was turned down once at 18 with a summer income of 3K and approved the next year when his income had doubled or tripled. D gets applications in the mail all the time and I’ve been trashing them. But, I think she should try the next time one of those shows up.</p>
<p>Busdriver & Himom – my daughter was age 8 in the mid-1990’s. Actually, it’s possible she was only 7 when she filled out the application - I remember the card arriving very shortly after my ex-husband moved out, and I was struggling to make end meet and carrying large balance on my own cards. I looked at d’s card as a sudden, possible source of funds for emergency – though we never ended up needing or using it for that purpose. (And I don’t do “grounding” – in any case, any initiative that either of my kids showed in those years was welcome, given our finances…). </p>
<p>As to the app, I believe it was one of those “you have already been approved” offers from the bank where she had a student savings account set up…Of course I think it was a mistake – but in any case the app form didn’t request any info beyond name, address, and household income. No DOB asked, nor social. Had she been asked her personal income, she would have had to lie - but “household”? Seems to me that would include parental income. </p>
<p>Anyway, it might be hard for you to remember but the banks were dispensing credit cards like candy in those days. People were signing up their dogs. Our trash cans was full of the offers I discarded. </p>
<p>I remember she used to always get credit card offers from American Express, too – though she didn’t get an American Express card until after she graduated from college. That one surprised me, since there is an annual fee – and I know she has since dropped it --but she lives in NYC and an American Express card gives a holder a leg up on event tickets.</p>
<p>I remember in the 70s or so. At 12 or younger, I walked into a local S&L and opened an account in my own name, just for me. No Qs were asked and I only owned a library card as ID, which they didn’t ask for. I kept that account active until that S&L closed over a dozen years later. I put all my babysitting and summer earnings in it and it helped fund my college. </p>
<p>I had no trouble getting CCs in college with only work study and summer earnings. Not many Qs were asked. My niece got about 6 CCs in college around 2000. She later decided to close them all and now has a low credit score and was denied when applying for an AmEx Costco card, even tho she now has a full time job with benefits!</p>
<p>We never grounded our kids and are glad we never had reason to. I would have been surprised if my 7-8 year old got a CC, but as long as it was never used without permission, it seems like the issuer is to blame, not the kiddo. </p>
<p>Credit was a lot easier to get way back when (before the reforms), but we have never had difficulty getting what credit we needed, H, me, and the kids. My dad did have bad credit fir a prolonged stretch because he was in a deal with a friend that went bad. The friend bailed but neglected to tell dad to get out, so it was probably 7+ years dad had poor credit. He never mentioned it to us kids and it didn’t affect us much. </p>
<p>I wish I could find a credit card for my youngest that asks for “household income”. The ones we’re looking at with the big sign up bonuses only want his income, no co-signers.</p>
<p>So that sounds like your daughter was trying to help out the family by signing up, calmom. That definitely is sweet, and not like a precocious youngster looking to buy some candy on credit.</p>
<p>We never grounded our kids either. Nor did they get “time outs”. Though if I really needed it, I had a very scary glare I could give them, that seemed to terrify them. Never had to go further than that look. Thank God I never saw it in a mirror. Still works on my dogs.</p>