Parents against College Credit Cards
January 6, 2008
Some parents either through hard personal experience dealing with credit cards or through education have taken a hard line against college credit cards. If you, as a parent, find yourself in similar dilemma, there are steps you can take.
For example you can add your child’s name to your own credit card. If you do this, you may not want to do it with your platinum card and $50,000 limit. Add them to credit cards with lower spending limits.
You can also check with your credit card company to see if they are willing to have a separate and lower limit on that specific credit card.
This solution allows you to review the newly acquired budgeting and spending habits of your children.
The other option is a debit card. Consider debit cards a plastic reusable check. Instead of presenting a check to the merchant, you present the debit card. Instead of signing the check, you enter your personal identification number. In the end, when your child uses a debit card, the funds are transferred from the bank account.
Debit cards force the user to spend what they have in the bank and no more. And since they typically carry a Visa or Mastercard logo, they can be used anywhere those credit cards are accepted.
You should also check the daily spending limit of a debit card. Most debit cards have very low daily spending limits like $500 or $1,000 regardless of how much you have in your bank account. You can have $10,000 in your bank account and get declined for a $650 purchase if your debit card limit is $500.
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