May 17 2008

Building credit, or ruining a future?

This guest post is from Tisha Kulak, who is a writer for, where she writes about credit card offers, student credit cards and responsible credit card use. 

There are many arguments about the pros and cons of a college student having a credit card. Recalling the old adage, “guns don’t kill people, people kill people,” having a credit card at a young age does not necessarily signal disaster. The discussion between parents and young adults should not only be a simple “no,” but parents should be taking it a step further and incorporating lessons about financial responsibility.  

Building A Credit History

Students who want a credit card and have proven to be responsible about their money might want to implement a deal with their parents that will allow them to secure a credit card, provided they accept full responsibility for the payments and a solid understanding of the consequences that follow a missed payment or even a late one.

By obtaining a credit card, perhaps for emergency purposes, students can begin building a good credit history in preparation for life after college.  A good credit history may not become important until renting an apartment or buying a house, but learning how to use a credit card responsibly, paying bills on time, and an overall understanding on how to budget finances will no doubt be an incredibly important lesson for any young adult.  

Ruining A Financial Future

The flip side of that argument is for students who go out on their own and secure a credit card without the financial guidance of a parent. There are plenty of opportunities on a college campus to sign up for a credit card. Kiosks offer a whole lot of free stuff to get a students attention. Without a solid understanding of the ramifications of these credit card offers, a student is likely going to find trouble and quickly fall into debt very early in life. What may seem like free stuff now, may turn into years and years of payments and building interest charges. If there is no prior credit counseling in school or at home, a student may not truly comprehend how credit will affect the future.

Select A Card That Complements Your Life

Students who apply for a credit card should be selective when making a choice. There are a lot of temptations put out to college students but it is possible to find a credit card that will benefit someone in college. Companies have designed several student credit cards that offer reward programs, such as frequent flier miles or cash back bonuses that could be an advantage to a student far from home. The student should understand that once approved, the card should be left at home, secured in a safe place until the time of emergency.  A general rule of thumb is if you do not have the cash to afford a purchase, you cannot afford it.  

Good Credit, Big Responsibility

Good credit responsibility should be a shared commitment between parents and young adults. A child will not learn responsibility by avoiding it. Set limits and very clear guidelines for credit card spending and payments. Students might consider on-campus seminars about the realities of credit and budgeting if they are made available. If they are not provided on campus, perhaps students could speak with an administrator if they are interested in learning more about the world of personal finance before bad habits for the future are formed.  

2 Responses to “Building credit, or ruining a future?”

  1. I appreciate the balanced treatment this article provides. I got a credit card the summer before my junior year of college, and I’ve stuck to my budget and paid my balance in full every month since.

    It’s important to note that college students who are eighteen or over are legally adults and don’t actually have to involve their parents in this decision. Parents who want to provide guidance on sensible credit usage need to set a good example and talk to their children long before they head away to college.

  2. Parents should teach their children responsibility long before they go to college. This sense of responsibility will carry over to the different aspects of a young adult’s life, including how to handle credit cards.

Sorry, comments for this entry are closed at this time.

Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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