My CFO on the Go!

Teach Credit…Earn Rewards

By: Tisha Kulak

It may sound harsh but many parents must think they are crazy for getting their college student a credit card. On one hand, it serves as a security blanket especially for kids traveling far to go to school. On the other hand, it seems to be the perfect recipe for disaster. Granted no parent wants to set their kid up to fail, and providing them with a credit card doesn’t necessarily need to be a set up. As long as responsible spending and budgeting is explored and discussed at great length beforehand, a student having a credit card can benefit both students and parents.

Credit cards created especially for the college crowd are many. Anyone considering such a card should obviously do their homework prior to any application and check out all the fees and requirements that go along with the card. That is obviously a crucial first step. However, sometimes the benefit programs that coincide with the card benefits are overlooked. The programs are varied but they can actually save you money depending on your spending habits and personal needs. Generally most cards designed for college students have an attractive introductory package that includes 0% financing for a specific term but look beyond the introductory period when making a choice. Read all of the fine print and see how each card compares to the others before making a commitment to one company.

In a nutshell, there simply seems to be a credit card designed for almost everyone. College students are no exception. Some of the benefits connected to a student credit card may not always applicable to every college student, so it pays to look at all of the options available. For example, a student who travels home via airlines can research cards that offer free airline miles which can be redeemed for free flights back home or back to school. Some credit cards have an on-going point reward system which can earn free gift certificates, redemption options for special events, and even cash back bonuses. It is especially important that all student-related credit cards be investigated because many are upping the ante and offering academic rewards. Students who acquire and maintain a specific GPA can earn additional credits based on their performance in school. For the most part, students need only to make purchases at common places such as bookstores, supermarkets, movie theaters, gas stations, and the like in order to earn the rewards.

Of course with the ups come the downs. Students, like many others, are often inundated with floods of pre-approval offers and marketing ploys aimed at nabbing attention for kids who are setting out on their own. However if properly utilizing common sense and practical spending habits, credit cards are not the root of all evil and do have their benefits. Researching different credit cards and the companies who sponsor them can help make more informed decisions when it comes to choosing a good credit card for the young adults going to college.

Tisha Kulak is a writer for www.creditorweb.com, where she writes about student credit cards; and responsible credit card use.

Get Your Children in Debt

Rob, over at Home Business Blogger has a great post on “Get Your Children in Debt to Keep Them Out of It”. In his post he points out the importance of parents teaching their kids about debt at an early age. Today you can’t depend on the schools or anyone else to teach your kids how to handle money, it is up to the parents. But it seems many are not doing a very good job.

According to MSNBC many students are leaving college with over $10,000 in consumer debt (not including student loans), and credit scores so low that it will limit their ability to buy a home, or even rent a car. Many are putting the blame on the credit card companies for providing credit cards to students with little or no income. Some are suggesting that Congress should step in and provide oversight. I disagree. It is the responsibility of the parents to teach their children about debt, and it is the responsiblity of the adult student to manage their debt properly.

So parents, do your children a favor, and get them in debt while they are young, and before it will affect their credit score!