As a parent, providing your teen with a credit card to use for college may be a great idea. Not only is it a convenient way to ensure that your child is financially taken care of, but it can also be a great way to teach them about credit and responsibility at a young age. By learning how credit cards work and being a responsible borrower, your teen can prevent getting into a lot of financial debt. Below are a few tips to finding the best credit cards in Altoona, PA for your teen.
Interest Rates
The first thing you want to consider when applying for a credit card for your college student is the interest rates. Since your teen has no credit, there is a possibility that creditors will require they pay a higher percentage rate than adults who have established some credit. Make sure that the rates are not too high and that your teen is fully aware of how much extra they will be paying for their expenses.
Credit Amount
Another thing you want to consider is the limit they’re willing to supply. While you want your teen to have enough money to survive on campus, you do not want them to have too much money. Managing money is something that takes time to learn, and providing them with too much credit too soon could work against what you’re trying to teach them. Start with a small limit and see how well they do. Some card companies offer increases for valuable customers.
Co-Signing
Parents should really consider if co-signing is a great idea when applying for credit cards for their teens. While this may get them a better interest rate, this does leave you on the hook should they default on the payments. Sit down and talk with your teen about being a responsible borrower and evaluate whether you’re willing to take on the risk.
There are several types of credit cards in Altoona, PA that you can take advantage of for your teenager while they’re off at college. Being an informed shopper and a responsible borrower are two ways in which you can help your teen establish good credit. For more information on credit cards, checking accounts, or savings accounts, visit the ARC Federal Credit Union.
