The Benefits to Parents for Getting Their Kid a Student Credit Card

If you are a parent that has a child in college, there are a lot of things you probably worry about. Besides getting good grades, hanging out with the right people, and graduating in a timely manner, there are also many financial decisions to think about as well. College is pretty expensive on its own and that usually doesn’t take into consideration the cost of living as well as daily expenses. But, what about after college? You would hope your child will move out on their own with their new degree and start living life as a grown up. In order to do this they need to have their finances in order. Certain parts of the financial world do not grade people on how well they did in college or how much money they are making when they get out. The fact is, your child might apply for a credit card or a loan at some point after college. If they do not have any credit history, or a poor credit score, then they will be knocking at your door again.


Your Students Credit Score

The one thing lenders and banks look at when considering someone for a loan or credit card, is their credit history. In other words, how well they have paid off their debts in the past. It doesn’t matter how much these debts were, it is just based on whether they were paid back on time. If your child needs a loan and they have no credit history, then they will need a cosigner, which will most likely be you. The most simple and easiest way to build credit is with a credit card. It is also the fastest and easiest way to destroy someone’s credit if they are not used responsible. This brings up the question “How will my child in college get approved for a credit card with no credit history?” They could become an authorized user on your credit card account, or they could get their own credit card and learn the responsibility themselves.

Student Credit Cards

By being a college student, your child has the ability to apply for a student credit card, even though they do not have a credit history. There are plenty of options to choose from and some of these cards even come with rewards for the money that is spent on them. Now, before you start thinking “There’s no way I am giving my kid access to a credit card while they are away at college” look at it from a parents point of view. You probably already send your kid money on a regular basis to buy the things that they need. They probably have a debit card (or your credit card) that they use to buy these things. Why not have them spend the same money that they were going to spend anyway on a credit card of their own, and learn some financial responsibility in the process. Student credit cards don’t come with a high spending limit, so they cannot get in too much trouble. If they check it like they check their bank account for the money that you send them, they should be able to stay on top of it and pay it off each month. The only thing that changes is that they are building their credit, while spending your money (which they were going to anyway). Still having trouble with your child having their own credit card? Then just have them pay for their tuition or textbooks with their student credit card and put it away until next semester. Building credit is not about how much you spend, it all about paying back whatever you do spend, not matter how much it is.

It’s Never to Early to Start Building Credit with a Student Credit Card

By talking with your kids about finances early and letting them know that their credit score is something that will be with them forever, just like their college degree, it will be saving them and you a lot of time and money in the future. Getting approved for a loan in the future will depend on their credit history, and how low the interest rate will be will also depend on how good their credit score is. By utilizing a student credit card while they are in college, for the purpose of building their credit, they will not only be on their own in the working world when they graduate, they will be financially independent as well.