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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Credit Card for College Freshman||Date: 5/27/2007 8:36 PM|
|Author: aj485||Number: 253670 of 308782|
Like I said, I trust him, but I would like to keep an eye on him financially for at least his first year away, and maybe having him on our credit card is one way to do that.
Does your son have his own checking account now? If not, this would be a great time to have him open one. Try to open an account at a bank that has a branch near UI. You need to teach him how to balance his account, so he can understand that just because the ATM says he has money, it doesn't mean he does. Since it's a local account, it will be easier and cheaper than wiring money to him. In my (admittedly dated) experience, most merchants in university towns have pretty lenient policies about out of town checks. If this is not true anymore, have him open his a local account that can be linked to one of your accounts.
Set some limits for him, like 'only $40 cash out every week' or something, and set some consequences if he violates the limits.
Making him an authorized user on your credit card account, for emergencies and pre-approved purchases only, is a good idea. Another idea might be to open a new joint account with him, again, for emergencies and pre-approved purchases only. Go through the statements with him, and make sure that he understands not having money for pizza on Saturday night isn't an 'emergency'.
Encourage him to not apply for a credit card without telling you about it. You won't be able to stop him from doing this, but let him know that you will periodically have him pull his credit report to confirm whether he has opened new accounts. This can be part of the condition for you continuing to support him throughout college.
Help him understand the concept of budgeting - freshmen don't necessarily understand how long a semester is - that if they have $500 spending money for 4 months, it means $25 a week; not spending $250 in the first week. Or if he does spend $250 in the first week, it means that he only gets $12.50 a week for the rest of the semester.
I handled all of my banking in college on my own, but I had a checking account from the time I was 14, and credit cards for students hadn't really started to take off yet. I did have a credit card tied to the credit union that was at my father's workplace.
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