Credit Cards for College Students

Before your child flies the coup going to college, you're probably considering tucking a credit card into his suitcase to pay for incidentals, emergency expenses, or even a pizza occasionally. But what is the best card choice for impending co-eds?

We've covered all the basics of the most popular options so you're sure to ace this course!

Authorized user

You can also add your son or daughter to an existing credit card account as an authorized user. An advantage of the is the child begins creating a credit history, as all activity is reported in both the parent's name and the student's name. And you can track the account and your child's spending.

Since you're the account holder, you can also remove your son or daughter when needed.

But, there is a downside. Should his spending get free from hand and your kid blow his budget, you're 100 percent on the hook for all charges incurred.

Secured cards

A secured credit card is a popular choice among students because the required security deposit limits the exposure to a mountain of debt. The minimum is usually $200, which acts as the card’s borrowing limit, too. Therefore if the student defaults around the card and does not pay, the credit card company takes the safety deposit as collateral-just just like a security deposit when renting a condo.

The catch to this card is that you need to do your research before diving in, as not all secured cards are equal. Since a goal would be to build credit, ensure the secured card reports activity to all three of the credit rating agencies.

Parents co-signing for any card

The CARD Act limits consumers younger than 21 capability to obtain a charge card by themselves unless they can demonstrate capability to pay (read: there is a steady job or source or verifiable income) or have a co-signer. So parents often part of and co-sign for a card to give the youngster the chance to begin establishing credit in his own name.

This gives the student more autonomy; normally the bill would go to a student and the parent doesn’t necessarily have access to the username and passwords unless they’ve established that between themselves.

But, like adding a co-ed being an authorized user, co-signing leaves you on the hook leaving your credit score exposed if your child racks up an enormous pile of debt he can't pay, so it's not often a good idea.

College kids getting their very own credit card

If your student can demonstrate proof of income that exceeds expenses he may be eligible for a a credit card of his own-no co-signer needed. This option puts all of the credit score-related benefits risk on the student who may don't have the emotional maturity to discern exactly what is a good financial choice. A student may require some guidance to avoid falling into a hole of debt he can't climb from.

Regardless from the type of plastic you opt for, what's most important is teaching a collegiate how you can set a financial budget for monthly spending and for parents to check in to see how the kid is doing with his budget and spending.