As a parent, there are a lot of reasons you may want your college-bound student to apply for a credit card—like convenience, emergencies or a chance to build their own credit when used responsibly. Here are some important things to look for when choosing one. And if you’re the one headed back to school? These tips apply to you, too.
It’s about the credit as much as the card
Perhaps the biggest advantage of credit cards isn’t actually what students can buy with them. It’s what they can build with them when used responsibly: good credit. Look for cards designed specifically for students and first-time cardholders, with educational resources and features like credit tracking tools that can help them discover responsible ways to use credit.
Leading by example
Another great resource for learning how to handle credit: you. As a parent, your experience with credit cards can add up to some great advice, whether it’s about paying bills on time, reading the fine print on card terms or making sure not to spend more than you can afford. Your student will thank you when they see the results on a future credit report. (They just may not do it out loud.)
Features worth considering
When shopping for a credit card for your first-time cardholder, these are some of the most important things to keep in mind.
- Annual Percentage Rate (APR): Low introductory interest rates are enticing, but know where the APR will go from there.
- Additional fees: Are there annual fees, transaction fees or other charges?
- Fraud protection: A credit card is a big deal—and an even bigger one if it's lost or stolen.
- Automated payment reminders: Alerts via text or email are extra-helpful during busy times like finals.
- Foreign Transaction Fees: Some cards might cover foreign transaction fees, a bonus for students heading abroad for a semester or the summer.
No doubt, credit card ownership is a big step. But being a responsible cardholder comes with real advantages as students (no matter what age they are) use their first credit cards to build credit while they earn their degree. Consider this as just another good lesson.