Don’t let your child get in to debt with college student credit cards

creditIf you’re a parent of a college student it may something quite nerve racking. If you’re a student getting ready to enter college, it’s another piece of freedom that you have been waiting all of your life to gain. What is it? Your first credit card. Don’t get yourself in over your head with college student credit cards.

College student credit cards are hated as much as they are loved. Some argue that credit card companies are targeting the less than responsible spending habits of college students. Knowing that the majority of college student who get a credit card will graduate with debt, card companies are aggressively marketing to young people.

Additionally, colleges and universities often receive kickbacks from the credit card companies for allowing them to set up booths on campus, send offers to students and parents on the university mailing list, and give students the offer they can’t refuse. Colleges and universities selling student information has become the subject of much debate and as a result, the practice has ceased at many institutions.

Others argue that learning to spend wisely and hopefully build a credit history should start as early as possible. If the proper vehicle is found to practice good credit practices, a credit card or a prepaid card can accomplish the same goal without enticing the college student to get bogged down with debt. While this argument may be compelling, steering clear of college student credit cards is still the best way to stay out of debt at an early age.

If you believe that college student credit cards are right for your child, there are a variety of options available in two major categories. First, if an actual unsecured credit card is desired, very attractive cards geared towards students can be found. Some give extra rewards points for the types of the typical college student purchases like books, music, movies, and food and normal points for all other purchases. Still though, the credit limit should remain as low as possible.

There is another class of college student credit cards that aren’t actually credit cards but represent an option with less risk of abuse or irresponsible spending habits. Prepaid cards where parents can fund the card as they see fit allow the student to have money available without abusing it. This does not build a credit history but prevents the student from getting overwhelmed with credit card debt.

Many of these prepaid cards come with helpful benefits including no annual fee, free automatic bill pay, and free e-mail and text messaging alerts with information on the card’s current balance.

Legislation protecting college students from unlawful credit card practices has been enacted by the Obama administration but if you believe that a college student credit card is a good idea, many options are available. As always, going to one of the many popular websites that compare the numerous credit card offers is the best place to get started.

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