Should your student have a credit card when heading back to college? Local experts weigh in

ROCHESTER, NY (WROC) – As college students head back to campus, some parents may be considering getting them a credit card. But what should you keep in mind before making that decision?

News 8’s Ally Peters spoke with CPA Scott Adair with the New York State Society of CPAs to learn more.

What would you say to parents or guardians who are considering getting their college student a credit card?

“I think it’s an important tool for managing their finances as they head off to college and I certainly would want to make sure that they set up a budget or a spending plan with them regarding it,” Adair said. “Take a look at all the options because different credit cards offer different varieties of options as far as spending limits and so forth.”

Are there benefits of starting to build credit when you are in college?

“Yeah, that’s probably the most important piece of this conversation is making sure that the student pays their credit card bills on time, pays at least the minimum but hopefully more than the minimum if they can’t make the payment in full,” Adair said.

“Then sticking to their budget will ultimately help them succeed in establishing a credit rating as they move forward in life and that can help as far as interest rates go as we see those rising, becoming more prevalent as far as extended purchases go, so when they’re looking to purchase a car after they get out of school, and / or even move into an apartment or purchase a home. “

What should parents and students keep in mind when choosing a credit card?

“Look at all the options that are available. Take a look first probably at your own bank that you’re using currently, because that may be the simplest one to do, ”Adair said.

“Watch out for the interest rates that they’re charging. Make sure that it has an option to limit spending, limit the dollar amounts and limit the opportunities where that credit card can be used. As we see primarily, these are used for certain types of transactions primarily online purchases or gasoline or food from that perspective are the majority of the uses for college students. “

If a family or student decides to get a credit card, what are some tips to make sure they’re staying financially responsible?

“Primary one there is making sure that that student sticks to a budget, and then ultimately don’t fall into the bad habits of paying that credit card bill late, that will impact you later on in life as far as your credit score goes, “Adair said. “And by absolutely all means, never miss a payment regarding a credit card bill that comes in, even if it is just the minimum that you’re making that payment up.”

For more information on credit card and college students or where to contact a CPA, you can click here.

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