A friend of mine suggested that I allow my DD18, who is in college, to get a credit card of her own. She said it would help her to establish her credit... that she could use it for a few things and pay the bill off each month. This is a scary thought for me. Is this the way for her to establish her credit?
__________________
"Strong is what we make each other." ~ Marge Piercy
2010:
Penny Challenge: $0.21 Change jar Challenge: $1.25 Quarters for Debt: $3.25 Grocery Challenge: $ Coupons: $309.59 EF Challenge: $73.10
chef2: No More Eating Out Challenge: 7/365 Book Club Challenge:
Sure, a credit card is not scary; it's just a piece of plastic. Having one credit card and using it wisely is a great way to help her establish independence and responsibility. It's a great learning tool. Not every young person given a card immediatly charges a trip to the Bahamas on it. However, if she starts to abuse her card, take it away from her, just like you would a car, a cell phone, or any other object.
__________________ Anyday I can wear a tiara is a good day!
I can tell you from experience that I had about $2,000 debt on my credit card when I graduated from college. I really used it for necessary items... art supplies, books, gas, etc. but it still added up, and I was only making minimum payments (all I could afford then). Once we got married we paid that off right away, thanks for DH. So while it was a lifesaver for me in college (being an art major is expensive!!) it also hung over my head for a while. It also taught me a lot about interest and finance charges.
On the other hand, I think any young person should have an "emergency" back up plan in case they get stranded with a broken-down car or whatever... even if they have money in savings, that isn't always accessible for a midnight tow truck, so I think a CC or a Debit card is a good idea. I think I'd just be sure it's something with a low limit, so even if she does run it up a bit, it's still managable.
__________________ ~~ Amy ~~ Wife to DH ~
Mom to: DD, age 6 and DS, age 3
Yes, I think it's a good idea. Help her pick a card with a small 500$ limit. Tell her to only put her gas on it. Then have her pay it in full every month.
Working in bank, I can tell you she needs to build her credit. Personally, I can tell you she needs to build her credit. DH had a dash when we got married, not a credit score. Anytime we went to get anything, car, house, we had to jump through hoops to get extra documentation.
I think it's best to have her get one so you can teach her about it. Take her on to bankrate.com and show her the different calculators and how long it would take to pay things off. This is a great way to help educate her about the proper use of cards.
__________________
~Nichole~
~wife to Zac~
~mommy to Wesley~
~mommy to Maggie~
The Bad Debt
American Trust: $3.092.39
GTO Loan: $6,650.85
Furnace: $7,203.10
Optima Loan: $12,776.11
The Not As Bad Debt
Dept of Educ Student Loans: $8539.97
Wells Student Loans: $32,921.05
House: $121,299.26
I am going to disagree and so NO! Instead of teaching her how to make it on credit, give her the tools to learn to make it on what she has. Starting with Dave's TMMO might be a good start. This might mean, she needs to a get a job, but credit is a vicious cycle that there is no need starting.
This might mean, she needs to a get a job, but credit is a vicious cycle that there is no need starting.
She does already have a job. She works at Chick-Fil-A and has since the end of March. She is very frugal with her money and has a savings account at the bank. She always puts at least 75% of her check into savings. I am proud of her for this. DD16 is the same way.
I thought about a card with a low limit. But, don't they usually up it if you pay it on time each month?
__________________
"Strong is what we make each other." ~ Marge Piercy
2010:
Penny Challenge: $0.21 Change jar Challenge: $1.25 Quarters for Debt: $3.25 Grocery Challenge: $ Coupons: $309.59 EF Challenge: $73.10
chef2: No More Eating Out Challenge: 7/365 Book Club Challenge:
I thought about a card with a low limit. But, don't they usually up it if you pay it on time each month?
Sure...they grant credit line increases, but you don't need to accept them.
If you are concerned about her establishing credit, you can simply add her as an authorized user to a card you have that is in good standing and she will get the history from that card for future credit purchases (car loan, mortgage). Meanwhile she could use a bank debit Visa card for emergencies rather than carrying cash or running up a CC bill. Of course if she is good with her paychecks and setting money aside, she might be just fine with a CC.
^ They do, but whenever she gets the letter, she can call them and tell them she doesn't want the higher credit limit.
__________________
~Nichole~
~wife to Zac~
~mommy to Wesley~
~mommy to Maggie~
The Bad Debt
American Trust: $3.092.39
GTO Loan: $6,650.85
Furnace: $7,203.10
Optima Loan: $12,776.11
The Not As Bad Debt
Dept of Educ Student Loans: $8539.97
Wells Student Loans: $32,921.05
House: $121,299.26
Sure...they grant credit line increases, but you don't need to accept them.
If you are concerned about her establishing credit, you can simply add her as an authorized user to a card you have that is in good standing and she will get the history from that card for future credit purchases (car loan, mortgage). Meanwhile she could use a bank debit Visa card for emergencies rather than carrying cash or running up a CC bill. Of course if she is good with her paychecks and setting money aside, she might be just fine with a CC.
Actually this isn't true. I looked into doing this with my husband. An authorized user is only someone allowed to use your card. They aren't legally responsible it and it's not reported under their social security number. So it doesnt build up anything under their social security number.
__________________
~Nichole~
~wife to Zac~
~mommy to Wesley~
~mommy to Maggie~
The Bad Debt
American Trust: $3.092.39
GTO Loan: $6,650.85
Furnace: $7,203.10
Optima Loan: $12,776.11
The Not As Bad Debt
Dept of Educ Student Loans: $8539.97
Wells Student Loans: $32,921.05
House: $121,299.26
This is the perfect way to establish credit, just make sure she uses it wisely and make her pay her own bill should she use it. It teaches responsibility.
__________________
~TRACY~*
Wife to Roberto since 5/2/98
Mom of 3 - DS: 19, DS: 18 & DD: 13
2 dogs: Jack (Jack Rusell) and Murphy (Shipoo -Shi*zu/Poodle mix)
DEBTS:
$505.68 Home Depot
$1468 - Citi Cards
EF: $300/$1000
MY BLOG oneprimgirl.blogspot.com MY SITE handmadenetwork.com
I am going to disagree and so NO! Instead of teaching her how to make it on credit, give her the tools to learn to make it on what she has. Starting with Dave's TMMO might be a good start. This might mean, she needs to a get a job, but credit is a vicious cycle that there is no need starting.
I have to agree. There are other ways to build credit if you really want it. I personally am aiming for a 0 credit score
__________________
Total Paid on Debt since 09/01/06 ~ $65,521.00
Books Read in 2010 (not counting magazines):
January - 11
February - 9
March - 18
Eat at Home Days:
January - 29/31
February - 26/28
March - 19/31
Finished Needle Arts Objects 2010:
January - 7
February - 2
March - 6
I was watching, read or dreamed that suze orman said that the getting added to a card with someone else who had good credit was not something you could do anymore or something that the credit card agency has found out about and stopping. I beleive building ones credit history by using a credit card for gas and paying it off at end of the month is a good thing. I also beleive. that your credit score isnt just for credit cards. It decides your insurance cost. it is looked at for jobs. apartment or home loans. you maybe able to survive ok since you are established already own your home and already have had credit cards. i dont think you really want a 0 FICO score. Living without credit card debt is a super good goal. but a 0 fico doesnt really seem like a good goal for a college kid.
__________________
Denny from bama
Oct food challenge 120.23/150.00
Debt: 400/13,076.22 at .07 APR for my sexy black (always needs washed) 2007 Nissian ALtima SL
DD18 and I went to the bank yesterday afternoon when she got off from work. I was custodian of the savings account she had that my DDaddy started for her when she was born. She was not allowed to withdraw any money without me. Since she is 18 now, we decided that needed to change. I am very proud of the way she has saved money. I guess I have taught her well.
She now has a 7 month CD (the bank special, best interest rate for now), a checking account with a debit card, and a VISA Card. She still has her savings.
She has a $500 limit on her VISA. We have discussed this in detail. She is going to charge something small each month and pay it off IN FULL when she receives the bill. I do believe she can handle this.
Thanks for all the advice everyone.
__________________
"Strong is what we make each other." ~ Marge Piercy
2010:
Penny Challenge: $0.21 Change jar Challenge: $1.25 Quarters for Debt: $3.25 Grocery Challenge: $ Coupons: $309.59 EF Challenge: $73.10
chef2: No More Eating Out Challenge: 7/365 Book Club Challenge:
NO, NO, AND NO! Not that you'll actually have any choice, because as soon as kids turn 18, the credit card companies start sending them card offers, and you can't stop them as they are of legal age. A lot of college students get into trouble with credit cards, and end up graduating with massive amounts of debt. I would never suggest that a person let their child have a credit card, but then, she's not a child at 18, is she?
Seriously, if she wants a credit card, let her get one in her name alone, and then it won't be on you if she screws up. A tough lesson, but she may have to learn it.
Connect with Facebook
Establishing Credit? Opinions, please.
Penny Challenge: $0.21
Change jar Challenge: $1.25
Quarters for Debt: $3.25
Book Club Challenge:
Anyday I can wear a tiara is a good day!
~~ Wife to DH 
~
and DS, age 3 
$65,521.00 
Linear Mode
