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Jenna Bare-Anderkovitch
CENTURY 21 New Millennium

Credit Card Habits Your Kids Can Take to College

Starting college is full of all kinds of new experiences. Students are left on their own for probably the first time in their lives, and it can be daunting.

Using a credit card can be one of those “firsts,” and parents can help by explaining how credit cards work and instilling good financial habits in them. Here are some credit card habits students should learn before they get to college:

Have a Job
To get a credit card in their name, students will often have to have a job and a credit history. Both of those may be hard to establish; some credit card issuers will only require an income. Either way, it’s important to have an income for the basic reason that they’ll need money to pay for what they buy with credit.

If not, and they still want a credit card, they can either be added to your credit card as an authorized user or apply for a secured credit card where they put down a deposit and can only charge up to that amount.

Track Spending
Students should keep a written total of everything they’ve bought with a credit card during each payment period. Credit card statements, as well as apps, will ultimately do this for them, but keeping a written record of every expense will let them know exactly where their money is going and can help them check the statement for errors. It can also help with budgeting.

Pay Off the Balance
To avoid fees and interest charges, pay the credit card balance in full each month. On-time payments will build a credit score, which will help them get the best rates on auto and home loans later in life, among other things.

Don’t Chase Rewards
Travel rewards, cash back and other credit card benefits can seem like a gift with their first credit card. They’re not. Tell your kids that they can be incentives to spend and should be seen as a reward for using their credit card wisely for what they’d buy anyway. Buying something just so they can reach a rewards level can lead to debt.