When DS started college I made him an authorized user on my credit card. He had a clear understanding that this card should be used for gas, occasional food and emergencies only and I paid all the bills at the end of the month. After 2 years of responsible use the bank told me it does not affect his credit history because he is not the primary cardholder. Then he got a collateral card for 1K at our local credit union, but it is not very convenient (savings locked up and no parental monitoring). Unsecured low limit won’t do because now he charges everything for simplicity. He is very organized but too busy going to school and working to watch my credit card, his credit card and his debit card). How did your student do it?
Kid got a job and applied for his own CC. Done and done.
My 2 kids opened bank accounts with Bank of America and they gave them debit cards before going to college. Later they gave them credit cards. I did not have to cosign.
You can setup profile to let the credit card company notify you via email and text message for any charge above limit (I set $1 for mine), any international charge, due date,… to monitor your card usage and fraud.
I would not worry much about credit history.
If you purchase a car, you can add your student to the loan as a secondary borrower and they supposedly get the same credit score benefit as if they were the primary. We have done this for all 3 of our kids.
We also got credit cards in each of their own names when they headed off to college. Each of their credit scores has increased 40-50 points in the time they’ve been in college. Keeping their credit card balances below 1/3 of their credit limit seems to be a fairly important factor in the slow but steady improvement in their scores.
Our kids signed up for student Visa cards from Wells Fargo, made a point of using the cards regularly for small purchases, and signed up for the service to automatically pay the balance in full every month from a deposit account.
“After 2 years of responsible use the bank told me it does not affect his credit history because he is not the primary cardholder.”
Was it a personal CC or a business CC? Did you provide his SSN when you added him?
You can pull his credit history and check yourself.
I added my daughter to my CC and I could see that on her credit history. The best way to apply for a CC for a student is when he is working and can show earnings. Mine applied to Chase during the summer when she had a paid internship.
My D was able to get a student Discover card which she uses for smaller items and pays from her account.
Agree with @Tanbiko above. Son had CC attached to my account so I assumed that it did not impact his credit history, but after I looked at his credit report (linked via his bank account), I could see that he had two years of credit history with the card that was in his name but linked to my card. The report reflected the full monthly charges on the account, not just the amount he charged.
He was able to open a basic CC with Citibank. Also a $1000 limit, but they increased the limit after six months to $1500 and I am guessing they may increase by another $500 when he hits the one year anniversary. He has the card set up to be paid automatically out of his checking account as I did not want to rely on him remembering to pay it by the due date.
Coolweather: “I would not worry much about credit history” – this is the main reason he needs to have a CC. Many landlords require it; he will need loans for grad school, etc.
Tanbiko, mine is a personal CC with Capital One. I provided everything they asked to add him, but do not recall if SSN was needed. He cannot show earnings because he works for cash.
Wolverine: “If you purchase a car, you can add your student to the loan as a secondary borrower and they supposedly get the same credit score benefit as if they were the primary” – that does not happen. We buy used cars and don’t finance anything except the house. He knows that credit card bills should be paid in full and used for convenience and cashback.
I do not have access to his bank account and linked credit card, so no idea what he is doing. I will have to pull his credit and see what is there. Maybe he can switch from the collateral by now. Increasing the limit should help the score:)
Thank you
My daughter got a card from Wells Fargo. They actually allowed scholarships to be listed as income. They started her with a 1200 limit with a interest rate of about 13.5% and 1% cash back. IMHO not bad (actually scary) for a student with no income. We also make some payments on her student loan which probably helped. The nice thing is I can see all her transactions online and make sure that payment are made on time. In our case, we have the issue that she doesn’t spend so little money that we occasionally use the card for our expenses just to help her establish a payment history.
My kids ctuslly got credit cards with their B of A student accounts back in 2003 and 2006. LOTS has tightened up in the credit card industry since that time. And for good reason.
I will,say…if my kids hadn’t gotten this student credit card, they would have both waited until they had paying jobs…and wpuld have applied for their own credit cards.
My son had a job in HS so when he turned 18 I got him a Journey Capital One in his name alone. He uses at college and whatever he makes purchases on the CC he knows when the bill comes in, I am paying directly from his checking account. I am about to do the same for my daughter.
Before heading to college, my kids got credit cards from our credit union. My D had a job so she was able to show income to get one, my S did not so he just used a secured credit card until he did.
He could do what my kids do…they do not wait for a monthly statement. They pay off the credit card regularly throughout the month.
I added S1 and S2 to my cc when they were ~ 18 and had them apply for their own cc when a college freshman. They had very good credit when graduating and bought houses/cars when they were 22/24 with no problems. They were very nervous when first getting the cards and very grateful when they easily obtained mortgages, post 2008.
D has been on 3 of my cc for two years. I’ve pulled her history and it was credit going back before she was born! She is a college sophomore and is getting ready to apply for her own cc.
I’ve made a lot of parenting mistakes, but am happy about these decisions. I think many people underestimate how much credit can help or hinder a young adult.
We put each kid on a CC with me when they turned 18. Both have excellent credit (scores around 800+). Both have had an easy time getting any CC they’ve wanted. Neither has applied for any loans but I doubt they’d have problems.
For rent qualification, income and employment duration are the most important things. My kid landlords required annual gross income > 40 times monthly rent. My kids met that requirement right after graduation but the landlords still demanded 3 month deposit or cosign because the full time employment periods were not long enough.
The best way to make sure credit card payments are made on time is automatic bill payment.