It’s no secret to any parent with a kid in college: the costs are far more than tuition rates and purchasing the necessary books. There’s the obligatory pizza, of course, along with gas prices so their soon-to-be-educated can return home for the weekend, sorority and fraternity costs and did we mention the pizza?
Many college kids are seeing credit cards as a way of working themselves from under a parent’s watchful eye; unfortunately, too many are also working themselves into a financial crisis. Despite the 2009 CARD Act, which prohibits credit card companies from marketing their credit cards on college campuses or to kids under the age of 21 in some states, these college students are determined to find their own independence via the credit card.
Tempt Me Not
What’s a parent to do? Some parents are adding their young adults to their own credit card accounts in hopes that will keep the temptation down so that their college students won’t secretly open their own accounts while others are finding that middle road in prepaid student cards. With the average price of $26,000 a year* in tuition for private colleges, it’s clear parents around the nation are looking for any way to keep costs down while not lessening the experience for their kids.
Here are few ways parents can keep the momentum going in terms of educating young adults without any surprises that will make those tuition costs look like pocket change.
Prepaid Credit Cards
Prepaid cards are enjoying a surge of popularity in all demographics, including adults who have long since finished college. With the tough economic times and the matching credit scores, many folks have turned to the prepaid model with good results. The trick is finding one that also reports to the credit bureaus.
Facecard Prepaid MasterCard for College Students
This is an instant-approval card that includes no credit checks or security deposits. Students, parents and even grandparents can add money online for instant access and the direct deposit feature is good for those working college students. Students can pay bills online and because it’s a prepaid offer, there are no concerns about interest rates or annual fees. The MasterCard logo ensures buyer’s protection and everything else associated with the MasterCard backing.
Obopay Family Prepaid MasterCard
Another MasterCard, the Obopay allows parents a bit more control over their teen or young adult’s finances. Parental controls play a role in how much freedom students have and it’s quickly become a powerful teaching tool for financial responsibility. Applicants are guaranteed approval with no bank accounts, credit checks or annual fees. While it’s a great choice for college students, it’s also good for younger kids, as well.
Traditional Credit Cards
The traditional credit cards, when combined with a young/new borrower scenario, has been a great model for many families. Not only that, but they, like the prepaid models, are an ideal way to ensure your young adult has a responsible mindset when it comes to credit. They’re great teaching tools.
This credit card offer is simple; no complicated fee schedules and even a $25 cash back bonus after your first purchase. The first six months allows for a 0% intro rate and many parents say it’s the ideal solution for their students who are always hit with unexpected expenses such as additional books and fees. Other perks include 5% cash back bonuses for travel, gas, groceries and restaurants (including the must-have college pizzeria). Other student cards in the Discover family include the Discover Student Open Road, which offers a 0% intro rate for nine months.
There are many ways to get our college students prepared for the real world. Their college educations will play a big role in their earning power and as parents, we can help ensure their spending habits don’t become a problem for them as they begin the new chapter in their lives. It might be these kinds of lessons are the best gift we can give our children, regardless of their age.
* U.S. Department of Education
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