Can I share my credit card with my college student? Should I?

College has started for the school year and kids are leaving home. Parents are trying to balance their children's financial needs with financial wants. Credit cards are such a natural extension of our consumer world, it is almost impossible to operate without them. Can you give your child a card and if so how?

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There are a couple ways. You can make them an authorized user on your card. They have access to the credit but you maintain responsibility for the debt. The draws backs there are obvious. If you have an out-of-control spender, they have all the upside and the cardholder has all the liability.

You could open an account as a joint account. This places responsibility on both parties. The draw back here is liability can go both ways. If you have a parent who over spends or becomes unemployed and can no longer pay the debt, the financial liability will fall on the child or other account holder. The unintended consequences can go either way.

Another option may be for a parent to see if they can find a bank to grant their child a secured credit card. The parents can deposit money against the card and let the student be responsible. This could help start a credit history for the student as well.

Finally, there is the debit or cash card parents can use to limit spending. The parents can fund an account or card and let the student manage his or her money. The student is responsible for planning and spending the limited funds allotted to him or her. There is merit to building these types of life skills too.

We all want our kids to be successful and flourish in school. These are some options to help give students the independence they need. The second two options can help parents limit their liability and promote learning the importance of money management. I hope everyone one has a happy and productive school year.

If you want assistance, legal representation, or just want to know more about Mark M. Medvesky or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

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