Teach Kids to Avoid Free Student Credit Cards

Unless you teach your kids to avoid signing up for free student credit cards, there is a very good chance that this is one of the first things they will do when they get to college. Today student loans are not the only debts that college kids are facing on graduation no. No many have very high student credit card debt too.

While your child might not have as that high of debt coming out of college, they will also not have that high of income. The credit card companies will entice them with free college t-shirts and towels, and lock them into a recurring monthly payment for the rest of their college days.

Now they will probably not have huge debts. This is not because you have taught them to use credit responsibly. No it will not be huge because their credit limit will be low. However, you child's credit card debt is going to affect them during a time when they are experiencing some of the biggest life changes they will ever go through. Getting your first job is stressful. But, doing it with a ton of student credit card debts and high college tuition debt is going to make this transition all the more difficult.

Not only will they have a mountain of student loan debt that they have to pay off, they will have to pay off those darn free student credit cards that they signed up for that first week of college.

Many college kids see these credit cards as a sign of maturity and freedom. Little do they realize that this credit could shackle them for the rest of their lives.

But, as a responsible parent, you can prevent this. Before dropping your child off at college, you need to discuss finances. Hopefully, you have been doing this their entire lives, but if not, it is not too late.

You need to encourage open communication about finances with your children. Let them understand what aid you will give them and what you expect from them if they need money. If you have extra money, this is the time to talk about how they can ask you for an allowance at school. If you don't have money to give them, then you need to discuss this too. If you are in this situation, you especially need to discuss the problems with free student credit cards.

I want my kids to promise me that they will not sign up for these cards. I would prefer to give them one of mine so that I know that they are not building up debt. However, this is not always possible. In the end, you just have to hope that you have taught your children to be responsible with money. Hopefully, they will understand the seriousness of these free student credit cards.

Find out more about how to teach you kids about personal finances at High Interest Rate Savings. You can also learn how to pay off debt at the Debt Relief Advice Website. Here is another tip for saving for college with Savings Bond For College.

Best credit card for high school students?

I'm going to boarding school next year, and my parents are gonna get me a credit card; not to go buy whatever I want, but for stuff like food, shampoo, toothpaste, stuff like that that my parents would buy for me at home.

Any cards you recommend?

Answer
You cannot get a credit card! You must be over 21, employed, etc, under the new credit card law. Your parents can add you on their existing credit card. Your parents are liable for the account. If you violate their rules for its use, they pull their permission for you to use their card.

Or they can set up a trustee savings account (Parent Name as trustee for Child Name) with an ATM card. With the savings account, they deposit your allowance into the account each month, and you use the card to withdraw cash periodically from the bank's ATM machine for your incidental expenses. The advantage is small minimum account balances (good for incidental expenses), no fees, a few pennies interest, cannot spend more than they allow.

Or they set you up with a student checking account, again they transfer funds into the account according to their budget for you, and you get a debit card with a Visa or MasterCard logo. May have low or no fees, depending on what other accounts they have with this bank, or it may require a minimum balance (be careful you do not ever go below a minimum balance requirement! Be careful!), absolutely no overdrafting which forces you to stay within their budget.

Most of the big banks have student checking just for these kinds of situations - Chase, Citi, BofA, etc. But first you should check to see which banks have branches where your school is AND where your parents & home are. Always best to deal locally. Another consideration is to bank where your parents already have banking relationships - cheaper and easier to set up & maintain another account where you already bank.