Credit Card Options For College Students

Student credit card

Source: web

Should parents of college students allow their adult children to have credit cards? That is the question to ask these days, in this age of economic instability and financial uncertainty.

When President Obama passed the Credit Card Act a couple years ago, it was supposed to help protect consumers from predatory lending, unfair policies and practices, and even from their own irresponsibility. Part of this measure was designed to help keep aggressive lending institutions from hanging around college campuses.

Adam Levin, chairman and founder of, for example, says:

In the old days, if you could fog a mirror you could get a credit card.

Based in San Francisco, this site focuses on providing the most up-to-date information about credit and credit products. His comment is in reference to how easy it once was to get approval for a credit card. Indeed, college students make for a good target demographic; he continues:

A credit card can be a positive tool. It can be very helpful in building your credit but it can also be an instrument in your financial self-destruction.

This is what he, and many others, are concerned about, and it is precisely the reason why many parents will not allow their adult-age, college-bound children to have credit cards. While just a few years ago any 18-year-old could apply and get approval for a new credit card, the new measures make it much more difficult for anyone under the age of 21 to get a credit card.

If you are under the age of 21, though, you can still apply, but you will need a co-signer or have proof of significant enough income to compensate your credit limit. Obviously, the most immediately accessible co-signers would be parents and many are actually unwilling to sign the contract.

For example, Robyn Kahn Federman, the communications director of a Rochester, NY marketing agency says there is “no way” she will allow either of her two daughters (one of whom is 19) to have credit at such an age. Instead, though, they use PayPal as an alternative way to send money between home and school.

She says:

I don’t think anything related to debt belongs in the hands of a college kid. The vast majority are not experienced enough with money or cognizant enough of the risks.

Indeed, cognizance is a proper way to look at it. Scott Gamm, a junior at New York University’s Stern School of Business, has established a plan for himself so that he will remain responsible. He understands that “the more credit you have access to, especially at that young age, the higher the probability you’ll use that card to finance fancy clothes, restaurants and entertainment.”

With this understanding he has successfully implemented a credit management plan that allows him to earn money as a blogger and freelancer to charge upwards of $300 total to his American Express and Visa cards. The 20-year-old pays then pays them off in full every month simply to establish his credit history.

Gamm also started a personal finance website,, which is where he posts his blogs. He hopes to educate students, especially, that they should “view their credit card as a way to build strong credit via minor purchases here and there and not as a way to extend their spending habits.”

This helps to set up a solid foundation for the future; and students who still want to have access to credit do have other options. Obviously, students can have their parents co-sign for a new card. Other options include a secured card (which requires a deposit of some kind), a debit card, and a prepaid card (which is like a debit card that is not attached to a bank account).


About Author

Casey is a seasoned writer in personal finance. He has written a number of articles that have been published in magazines and blogs around the country. His advice has helped millions make better choices about how they save their money.

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