Many people question whether or not they should give their kids a credit card when they go off to college, and it’s a question that’s even debated amongst financial advisors.
There are pros and cons:
If they have one that they use properly they’ll establish a good credit history. They’ll also have it in the case of emergencies.
If they abuse the card, they might end up in massive debt. If you are also on the account, you could end up in debt too. This could also ruin their credit, and yours.
Our advice: Do it early, before they’re out of high school so that you’re around and can more closely monitor them. If they’re responsible, then you can probably trust them at college. If not, at least you know before they’re on their own.
When you do it, you’ll want to establish common sense ground rules (what can the card be used for and what it can’t) and establish a clear budget. Put these things in writing and have your child sign off on it.
Debit cards can be an alternative, one that may allow your child to learn how to live within a budget. However, you should know that these days credit cards offers rain down on students all the time, and they can probably sign up for one on their own once they reach 18. That’s another reason why having a plan up front is so much more important.