It may seem hard to believe, but over the next month, parents with college-aged children will soon be seeing them packing up their rooms, loading their cars and heading back to campus for the start of the fall semester. This means that the weeks ahead will be filled with seemingly innumerable shopping trips and other preparations designed to facilitate both a comfortable existence and, more significantly, academic success.
To that end, one issue that parents and their college students alike might like to visit prior to their imminent departure is the possibility of securing a credit card. While this might seem like a questionable idea to some, the reality is that a credit card for an 18-22 year old can help cover more than just frivolous expenses, including books, lab fees, membership dues and even emergencies.
All this begs the question, however, as to what viable credit card options are available to college students.
Standard credit cards
While it might make parents uneasy, the reality is that 18-22-year olds can open credit card accounts in their own names. However, they can derive some comfort from the fact that the Credit Card Accountability and Responsibility Act of 2009 dictates that those who fall within this age range can only secure a credit card if they can supply proof of individual income such that they could theoretically cover their bills.
As to the proof required, some card issuers require little more than a college student listing their income on the application, while others require everything from copies of paystubs to tax returns.
Starter credit cards
If parents and/or college students are somewhat uncomfortable with complete credit autonomy, they could discuss pursuing certain types of credit cards geared to the student demographic. While many of these cards don’t offer huge rewards or credit lines, and come with higher interest rates given the holder’s limited income and credit history, they do have no fees.
Another option could be a secured credit card, something we discussed in previous posts.
Standard card with co-signer
If these options are unfavorable, parents and/or college students could always consider securing a credit card with a co-signer, meaning someone who is at least 21-years-old and has a good credit history (i.e., mom or dad).
Under this arrangement, both the student and the co-signer can use the card, and are held equally responsible for the debt, meaning it goes on both of their credit reports. While this might seem like a potentially risky endeavor for both sides, experts indicate that it can actually help teach a college student how to use a credit card responsibly.
Always remember that if you somehow find yourself unable to manage credit card debt — even struggling to make minimum payments — despite your best efforts, you do have options for securing a fresh start.