By now, most of us have had the house to ourselves after seeing our young ones off to college back in the fall. Some of us are coping better than others and all of us are worried about whether they’re eating right, wearing dirty clothes for days in a row, if they’re studying or if they’re looking for a degree at the frat parties. Either way, we know it’s a rite of passage and we hope against hope they make it through without an arrest record but with a degree. And, of course, it would be nice if they learned how to do their own laundry.
Times are Changing
Today’s young college adults face a myriad of challenges that we didn’t face at that age. They’re already getting their financial lives in order as they anticipate new challenges and careers and they’re also facing far tougher course loads than what many of us had. It’s never been more important for college students to have their credit lives established by the time they graduate. Besides, the better established they are, the less the odds of them moving back in with us are, right?
There are practical reasons for establishing credit at a younger age, too. Many employers now consider their applicants’ credit histories as part of their decision making process. While they understand that not all college graduates have credit scores yet, for those who do, if if they’re brief, it can tell a potential employer that he has a mature applicant who’s ready for adulthood and all of the responsibilities that go along with that. Another one of those practical reasons is found in the application process for apartments or rental properties. Parents historically have cosigned for these types of application approvals; but these days, many college graduates are already a step ahead in the game and have already established their credit that assures the landlord the tenant is on the up and up.
Unfortunately, a new law may make it more difficult than ever for young adults wishing to build their credit in college. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 requires to borrowers under 21 have a cosigner, or at a minimum, they must be able to demonstrate that they have adequate income to ensure their monthly payments. Again, many parents are cosigning for their young adults and usually, it’s required only once as they begin their careers and get past the age of 21.
Discover Student Open Road
So just what is a a great choice in student credit cards? The Discover Student Open Road is one of those choices that offers great rates, a rewards program and all the benefits that can help young adults get that healthy head start in their financial futures. There’s no shortage of student credit cards, and we always caution our readers to carefully review any offers they might be considering and with that in mind, we recently took another look at the Discover Student card offer – we’re as impressed now as we were when the credit card first emerged.
First up, there’s a 2% cash back bonus on all of your fuel ups and restaurant purchases. Not only that, but card members earn cash bonuses on everyday purchases as well as those great 20% bonus deals through ShopDiscover.
As a parent, you’ll rest better knowing this Discover card offers around the clock travel assistance and rental car insurance. The Discover Student Open Road Card offers a fraud liability guarantee, too and that comes with free fraud alerts should you lose your card or discover it’s been stolen. Students and parents both can benefit from the online financial tools for smarter spending and payment management. Set up text alerts for payment reminders or to alert you any time your Discover card is used.
Finally, you and your college student will enjoy no annual fee and you’ll also be privy to a sign on bonus of 0% APR purchases for 9 months.
Discover Student Loan Program
Also, it should be noted, too, that Discover just announced its new student loan program for college students and their families. You can qualify for 100% tuition and choose from variable or fixed rates. Visit the Discover website for more information on these financial products. Most have no origination fees and you can apply for medical loans, MBAs or loans for law school. You can apply online and even e-sign the documents. Track the status of your loan, too, on the Discover site and set up the payment plans and alerts on the easy to navigate consumer site. The goal is to become a one stop source for consumers’ financial needs.
Regardless of whether you choose a Discover Financial product or opt for another credit card choice, the key is knowing what’s in the small print. It’s also an ideal time to teach your young adults the importance of reading the terms and conditions. Pay attention to those details we often take for granted. For instance, will your college student be traveling abroad? Be sure the credit card can be used globally.
As parents, we want to put those strong financial habits into practice as soon as possible. The last thing we want to do is set our kids up for failure. The best way to accomplish that is to teach them the importance of proper credit management, the power of a monthly budget and the benefits of biding our time and saving for those bigger items instead of racking up a lot of credit card debt.
Although the CARD Act restricts credit card companies from marketing credit card offers to students on college campuses, it doesn’t mean these young people can’t bypass the regulations and get access to their own credit anyway. It’s a better idea if you, as parents, know what they’re doing so that you can influence better financial choices. After all, if we don’t teach them, who will?
What are your thoughts on college students and credit cards? Did you have access to a credit card while you were in school?