<p>I use my debit card online and at retail all the time. My bank places a limit on the maximum charge it allows per day, and rejects anything larger, unless I call them and tell them I plan to make a larger charge, in which case it allows that specific charge. Am I at risk for that maximum? Yes, but it’s a risk I’m willing to take.</p>
<p>annasdad: Many people use their cell phones incorrectly, you know answering them in inappropriate places, talking too loud, etc. I don’t think the answer is to just not let kids have them because they “might” do the same thing. Parents should teach their kids how to use them properly as they are a valuable tool in our society.</p>
<p>My parents also do not like CC but believe they have their place as far as establishing credit. It is important to have good credit vs no credit. I guess my parents are worried like you and that is why they won’t cosign. I’m OK with that as I need to establish my own credit. But to avoid it all together seems a little over the top.</p>
<p>Sorry jym626; I just skimmed the posts and did not see that. Both my kids used bankrate.com when searching for cash back cards to add to their first credit card.</p>
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<p>Boy, I seem to have scratched some very raw nerves to get that kind of nasty reaction.</p>
<p>Yes, I’m a moral degenerate because I got overextended on credit card debt. The point is that I learned my lesson. (And dug myself out rather than going the bankruptcy route, which 13 years ago was ridiculously easy to do.) That lesson that I’m passing on to my kids: debt to credit card companies is evil. That’s a much sounder lesson than “You need a credit card because you’re going to need to be able to borrow in the future to pay for stuff you can’t afford.”</p>
<p>There are lots of other ways, responsible ways, to establish credit; the assertion that the only way you can establish credit is through a credit card is pure myth. Not having a credit card does not sentence you to a life of sleeping on mom’s couch because you can neither rent an apartment or buy a house; but having a credit card and using it irresponsibly can sentence you to years of misery.</p>
<p>No worries, snowball! I meant to say we “also” used bankrate. Great minds :)</p>
<p>And annasdad- Don’t know what your point is about affinity cards. I believe those are just the cards that are linked to, say alumni associations, so if you use that card, a portion of the fees fo back to the college/university alumni group that sponsored the card. So what?</p>
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It always cracks me up when posters say things like that, because they fail to see that have posted something inflammatory or insulting that caused annoyance in another poster. I can’t speak for fendergirl (and she is doing a fine job of speaking for herself) but it looks like the insinuation is that students today don’t know how to manage funds. It is insulting to those who have done a very fine job of it-- as demonstrated by fendergirl, and as I am seeing in my s’s. I am proud of them, and I am proud of fendergirl, for managing her money well. I am glad predatory lending has stopped. Everyone, young and old, should live within their budget. I am proud of you for digging your way out of debt. How much debt did you rack up? How long did it take to clear it up?</p>
<p>Fendergirl, great post. You sound like my kids. We used a “learner’s permit” approach to credit as others have mentioned. The first two years or so, the kids had their names on one of our CC with a low limit, plus their own bank accounts which they managed alone. We supervised their use of the credit card and made sure it was not abused. As they got older and took better-paying campus jobs, they were able to apply for credit on their own, linked to their bank, and have been managing beautifully ever since.
We did educate them about the dangers of debt from the time they were in junior high. It’s not a conversation you start the month before college.</p>
<p>I do apologize if I came off a bit harsh but I’m not sorry for what I said and I don’t think I was overly nasty. I didn’t say you were a moral degenerate, I said at one point you were young and dumb. And kudos for getting out of it. But just because you got yourself in that situation doesn’t mean every other person at that age will get themselves in debt to credit card companies… which is how you are coming across here. That is insulting. You said your daughter is taking your lesson to mean debt to anyone is bad… which means she will be paying cash for a house, right? Or renting, if they will allow her to? I’m serious with that. A relative of mine had to move in with another relative after a divorce because she didn’t have enough credit history on her own to qualify for renting an apartment. I honestly do know people who can’t get a cell phone plans because they have no credit history. They have to do the pre-paid ones. </p>
<p>And credit cards are a responsible way to build credit… as long as people stay responsible with them. Yes, using it irresponsibly can lead to years of misery… if they are using them irresponsibly. If they are being responsible then it can be a great asset and make things much easier in the long run.</p>
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<p>I didn’t insult another poster. If what I said doesn’t apply to you - if you’re sure your kid will be in the 11% who never carry a balance or the 20% who are never surprised by their balance - then why should you be insulted? Why should you be annoyed? Because my opinion on whether parents should encourage their kids to go into debt differs from yours?</p>
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<p>I think the statistics I posted support that insinuation.</p>
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<p>NOYB</p>
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<p>Read my earlier post.</p>
<p>For those lurking, I do think it’s relevant that fendergirl went back and edited her original post to “apologize in advance.” Apology accepted.</p>
<p>annasdad, I edited it right away, I guess you just read it before it refreshed, but anyway, there you go again with the insinuations, you just seem to think that a student getting a credit card is the same as a parent encouraging their kids to go into debt. When I have kids I will be sure to say oh great now that you are 16 I highly encourage you to go into debt. Please take out as many credit cards as you want and charge anything under the sun. Please. Show me one parent who has ENCOURAGED their kids to go into credit card debt?</p>
<p>annasdad–for those students who may be reading this thread, could you please comment on the other ways that one might be able to establish credit besides using a credit card?</p>
<p>How about letting this thread be a teachable moment and offer some of your alternative ideas for establishing credit?</p>
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Pease read more carefully. I was not insulted. I am proud of my s’s, who have seen relatives and their friends and people like you dig themselves into a mound of debt that is virtually impossible to get out of and vow that they will not make those mistakes. I do think your posts have been insulting and purposefully inflammatory. Understand if your past debt has left you with a lot of affect about it. But dont project it onto others who aren’t like you, and don’t be jealous of and throw darts at those who have managed their funds successfully. Its not pretty. Time for a serious attitude adjustment.</p>
<p>Different kids can merit a different plan. Kid 1 got a CC when she went to college through Wells Fargo. It was a combo package of savings, checking with debit and credit card. She rarely uses her card. For several years when she had no income she had us keep the card at our house and she did not use it all. When she uses it she pays it off in full. She is her father’s D.
Kid 2 just graduated from college. He was offered the same package by Wells Fargo. We had him decline the credit card. How that he is out of school and working we thought it was time to get a credit card to begin establishing credit. We were able to go on to his Wells Fargo account online and get the student credit card though he had just graduated. Approved immediately. He is not going to even carry the card. He will use it for gas once a month to begin establishing some payment history. Interestingly when we got the card in the mail he also had a separate envelope with a letter giving him his credit score.
For those with only a debit card what do you do when you travel? I know that at all the hotels where my D has worked they require a credit card. They will take a debit card but it will place a large hold on the card. It is up to your bank as to how long it takes to remove that hold. She said many people get very heated and angry over this.
We use our credit card for almost all our purchases. We have always paid our bills in full each month. We hope our children have learned from us.
On the other hand my H views credit reports for potential tenants all the time from recent grads and young adults. The amount of debt the average young person has is staggering. Student loans being one of the them but also a lot of credit card debt. The problem you see is that once your student has a VISA or MC the department stores and places like Victoria Secret seem to be willing to give you a card.</p>
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<p>I wasn’t so young. And there were some extenuating circumstances, which I don’t care to go into. The point I was making, however, was not mainly about my own mistakes, but rather that it’s perfectly possible to lead a debt-free life, and I have been doing so for nearly a decade. I’ve done do because I’ve learned that life is about a lot more than what you own, and that he who dies with the most toys hasn’t won anything.</p>
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<p>Everyone, no, but the statistics I cited show that most will. Here’s another link:</p>
<p>[Average</a> Credit Card Debt $3,752 Per Adult, $7,394 Per Household](<a href=“http://www.indexcreditcards.com/creditcarddebt/]Average”>Credit Card Debt Archives - indexcreditcards.com)</p>
<p>“the average American adult is carrying $3,752 in revolving debt (mainly credit card debt) and the average American household is carrying $7,394 in such debt.”</p>
<p>And those averages include the households who have no credit cards and therefore had 0 credit card debt.</p>
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<p>Like most 17 year girls, she overdramatizes things, and her reaction is mainly in response to what she has seen some of her friends’ families go through. She was way too young to know what was going on when we were in that situation. And I suspect she will eventually borrow money for something, and that’s perfectly fine by me; in another few months, she will be an adult, and she will be responsible for her own decisions. I hope the lesson she has learned from us is that it is possible to live a good and fulfilling life without being in debt to the credit card companies. If she chooses to disregard that lesson at some point in the future, it’s her life, not mine, and I can rest with a clear conscience that I’ve done my best.</p>
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<p>Google is your friend</p>
<p>[Establishing</a> Credit](<a href=“http://dca.lacounty.gov/tsEstabCredit.html]Establishing”>http://dca.lacounty.gov/tsEstabCredit.html)</p>
<p>Here are the best ways to get credit and start building a good credit history:</p>
<p>Apply for a department store or gasoline credit card. The idea here is to start small and work your way up. Major bankcards like Visa and MasterCard are the hardest to get. Department store and gasoline cards present less risk, because you can only use them at certain stores and the credit limit is often lower than bankcards. </p>
<p>Buy something, make a big down payment, and make payments on the rest. A local retailer or department store is the best place to try and do this. The large down payment takes away some of their risk. Be sure they agree to report your payments to a credit reporting agency so you can start building a credit history. Be sure to make all payments on time. If you pay late this will be reported to the credit reporting agency too.</p>
<p>Apply for a small loan with your bank or credit union. It’s always best to apply for credit with people or businesses that know you. If you have a checking account at a bank or credit union, start there. If you don’t have a checking account, go to a bank or credit union and open one. Bank accounts appear on your credit report and help you start building a credit history.</p>
<p>Apply for a secured credit card. Try for this at the bank or credit union where you have a checking or savings account. Here’s how it works: They give you a credit card with a low credit limit. To reduce their risk, you deposit the amount of your credit limit into a bank account with them. If you don’t make your payments, they take the money from your account. Ask for a credit card that has no annual fee or upfront fees and charges.</p>
<p>Years ago my first card was a Mastercard–for emergancies that my parents helped to establish/cosign</p>
<p>My first two cards were an American Express that had to be paid in full…and Sears card because they were conservative about offerring credit and it was believed having a Sears card in good standing -was good for credit. I applied for them both as a Sr in college since everythigng at college was paid for through checks and I rarely had need for a credit card.</p>
<p>annasdad – What are the figures for American adults carrying balances on their credit card(s)? I know it has gone down in the past year or two. But there are statistics and there are statistics. In the 35 or so years I have had credit cards, I have never carried a balance. After marriage 25 years ago, my husband & I have never carried a balance. Sure, to my chagrin, I have had to pay interest maybe three times because I misplaced my bill so forgot to pay it. So this is the behavior modeled in our household, of deferring pleasure, of going without (vs. going out!), etc. After reading about airline horror stories on CC of the problems kids have booking flights without credit cards in hand, I plan for my kid to go to college with a credit card, probably two. One will be for big ticket emergencies (like plane flights) so will be linked to my account. The other will be for her to manage her spending AND pay off every month from her own account. Like others, I don’t like the insecurity of and lack of recourse with debit cards. </p>
<p>My kid has never had an allowance, but most months gets $50 from her grandma. She is responsible for earning the rest of her spending money and paying for her clothes. Most of this summer’s earnings will go towards a $2,000 school field trip next year, since I told her that parental money may need to go toward visiting a college or two that she hasn’t seen if they give her more money than the ones she has seen.</p>
<p>I realize your mileage differs. Other than a car and obviously longer for a house, I cannot imagine taking three years to pay off a debt. Every family’s spending habits and priorities differ. Some kids are more susceptible to immediate gratification than others, but at least for me, I feel my job is to make my kid a responsible consumer, spender, and saver (not necessarily in that order!), and in the near future, a responsible drinker and responsible with her body.</p>
<p>annasdad, I know that was just copied from that website, but I just want to point out for readers that they are wrong on one thing. Bank accounts do not appear on a credit report. If someone gets a credit card through the bank, that will show up on there… or a car loan through the bank, or any other type of loan through the bank… but not just a simple checking account or savings account (nor their corresponding debit card). </p>
<p>Also, from what I have seen, most stores won’t give you one of their credit cards if you don’t already have an established history elsewhere. Since they are smaller and only for that store they want to make sure that they specifically will get their money back. That being said, once you have say a visa or mastercard, almost any store will give you one of their cards as long as you have a good history with it.</p>
<p>For credit building… I can tell you guys what shows up on my annual report… Credit cards, Student loans, car loans, and mortgage. If your kids have a student loan in their name then they should be on their way to having at least some kind of credit history.</p>
<p>fendergirl… my oldest has student loan on his credit history always paid on time…i cosigned so shows up on mine too…but student loans do not always count… he purchased a brand new car last year…significant amount down… had 1 credit card, always paid it on time, in full etc. the car dealership checks his credit and determines his rate based on those things and an excellent score(financing is through the auto maker)…he goes home with the car… 4 days later receives a certified letter that he must return the car…error in calculation of interest rate as the auto financers do not include student loan history and they determined he should be paying a higher rate… as he wanted to keep the car, he had to do the paperwork over again at the new rate. I asked my local bank whether they include student loan history and they said generally they do but not all do.
Most ridiculous thing i had ever heard…so student loan alone may not be enough.</p>