In our THV Working for You segment, it's the first Monday of the month and Linda Tucker with Consumer Credit Counseling Service sits down with THV's Liz Massey to talk about how to help your college bound child, become more financially responsible.
Tucker says you have to discuss budgeting and saving for unexpected things with your college student. She says you don't want them to get in trouble and get in over their head.
Tucker also says the Credit Card Act of 2009 says that anyone under the age of 21 cannot get a credit card unless they can prove their ability to repay or get a co-signer. Credit card issuers cannot solicit new cardholders on a college campus.
If a parent does co-sign for their child to get a credit card then there should be more discussion says Tucker. She says, the student needs to know to only charge things they must have, the statement needs to go to parent so they can monitor, discuss the importance of paying whatever is charged each month in full and discuss consequences of not paying in full (fees, high interest, reaching/going over limit).
Tucker says 84 percent of students have credit cards, 50 percent have more than 4 cards.
Alternatives to getting a credit card says Tucker includes prepaid (load) debit card or a monthly allotment. Parents need to help their student understand that there are limits and they can't just get more money when they want.