Credit Cards And College Students

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One of the provisions of the Credit Card Accountability, Responsibility and Disclosure Act or CARD, is that individuals under the age of 21 must get a co-signor in order to get a credit card, unless they can prove that they have sufficient income or funds to handle credit card debt on their own.

This is in sharp contrast to the previous times when college students were heavily marketed to by the credit card issuers and it was rather easy for them to get a card based upon the student status.

As a result of this new regulation, many parents may wish to assist their children in establishing a credit history. One way they can accomplish this is by making the student an authorized user on their own account.

However, that solution is not without its detriments. If the student overspends on the credit card, the parents could be responsible for entire debt and their own credit score could suffer. And if the parents are careless with their credit they could hurt their children?s chances of acquiring a loan on their own credit in the future. So the fact is that it could conceivably cause problems for both parties.

While a credit card may be useful for a student to have as they are attending college, it may be wise to reserve its use for emergencies only and to save the credit building until after college is over and the student has secured decent employment on their own.