Credit Cards for Teens
I read the recent postings about credit cards and am wondering if anyone can recommend a good credit card for my son who will be in Copenhagen for 6 months on a UC semester abroad program. Credit card companies charge lots for fees for exchange rates and withdrawing money. We are thinking American Express might be good in case he loses his card because they have offices abroad. I would appreciate any advice. Judy
I don't have a specific bank to recommend applying for a credit card, but do shop around to find which bank charges the least to exchange currencies as well as the least APR. Either way, your son will get the best exchange rates by using a credit card and extra protection that a bank can offer (such a zero liability for fraud, insurance, etc.) versus exchanging cash. However, I would not recommend withdrawing cash from a credit card unless your son plans on paying the full balance each month as you mentioned the APRs on cash withdrawals when keeping a balance can be very high. I normally use my ATM/debit card to withdrawl cash - you still get the best exchange rates versus exchanging cash. anon
My son is currently in Australia. We got him an additional card on my account at Wells Fargo, but he only uses it for emergency and hotel, airfare things, They charge a small conversion fee, nothing too much. All the cards do this, no way around it, you can call around to see who has the lowest fee. What we did do to avoid most of this and for everyday money is called all the banks to see who had a partner bank in Sydney and found that BofA has a partner. If he goes to the partner bank in Sydney and uses the ATM, there are no charges (atm or conversion). He gets Australian $$ and his account here is only charged the American $$ equivalent. What he also did was opened a student acct at the partner bank and got an ATM card. The clumsy part, he takes cash from his American ATM account and then deposits the cash into his australian ATM account so he doesn't have to carry alot of cash. Also, he now has a job and can easily deposit his check into his Aussie account. another international mom
what has worked great for me when traveling abroad is credit card for *purchases* and atm for local currency. my credit union doesn't charge for not-its-own atm usage which is an added bonus.
Do you belong to a credit union or can you join one? I used my credit card (esp. my debit card) from my credit union for overseas travel (Europe and South America) and they didn't charge me anything (or a very very small amount) and I got great exchange rates. Andi
I don't have a particular card to recommend, but I remember that when I traveled to Europe as a college student some years ago, my parents sent money to the credit card company in advance so that the card would maintain a credit balance. In any country, I could take a cash advance against the credit card, but because it had a credit balance, we avoided a lot of the fees and high interest rates. Just something you might want to consider. Susan
My daughter is entering Barnard College in the Fall. I want her to have a credit card. She has had a debit card from Kaiperm but I don't think that will work in Manhattan. We get lots of credit card announcements in the mail. Has anyone had experience with Capital One? or any others? I'd appreciate the advice.
I was poking around at the Citibank web site yesterday and noticed they have several college cards.
My son has had cards on my accounts since he was 8 because he has travelled internationally by himself. Every few months he gets a pre-approved platinum card application, so I guess he's building a credit rating, even through my card. I'm thinking this will make it easy for him to get a card of his own when he turns 18. (Once I sent in one of these preapproved applications, putting in his correct age and annual income of $500. I got a huffy response back saying, We don't issue cards to anyone under 18!) Dana
If KaiPerm's Debit Card is the same as all the other Debit Cards I've ever seen, it will work just fine on the other side of the country--they are all done through the VISA network, which is worldwide. The only problem will be making deposits to the underlying checking account. But you can do bank by mail to solve that one, if you want. Ask for forms/envelopes at your branch before she leaves. An alternative would be for her to get a new checking account at another bank that has branches in her new town, and get a debit card through them. Personally, I agree with the general wisdom on the web page that credit cards are the quickest way for folks to get saddled with debt they cannot manage. If a debit card will do, she should probably stick with that for a while. Dawn
I turned 18 my Senior year at BHS, and in March got a CapitalOne (www.capitalone.com) student Visa card. True, at first the interest rate was very high (19.99%), but there was no annual fee and no minimum finance charge. Also, the credit limit was only $1000, but I was not employed either, and spending more than this would not have been good for me. That said, it has been very liberating to have, and probably easier on my parents financially, since I don't ask them for their cards anymore...Also, in the last 5 months I've had my card stolen twice, and it took only a few days to get a replacement card. Also, because I've always piad my bill in full, they upped my limit to $2000 and when I called and asked, they lowered my APR to 9.99%. Not bad. I have been satisfied to this point. Oh - and I use their website to electronically pay my bill directly from my savings account so I don't have to worry about mail delays. Ben
Does anyone have experience with credit cards for teens? My 16 year old has a job and a bank account with an ATM card, but he needs a way to deal with larger amounts of money than by cash. A checking account would not be practical because he doesn't have a driver's license yet for ID. He is going on a ski trip next month, and will need about $250 for his expenses. We got a solicitation for a credit card from Capitol One, a company about which I vaguely remember hearing negative reports. We would have to co-sign for the card, of course, but he has shown himself to be very responsible with money so that doesn't worry us. I'd appreciate any info on Capitol One, or any other suggestions.
We have two teenage daughters to whom we have given credit cards--one at age 14 and one at 15. With specific rules, they have used them responsibly and it has been a great help. Our rules are: 1) they only use them with prior permission (i.e. tell me in advance they are going shopping for a needed article of clothing, something they need for school, etc., and set monetary limits for the purchase), and 2) they must hand over all receipts.
Two ways we have gotten credit cards: one company allowed us to add a child to our account as an additional card holder. This got around the problem of finding a company that would extend credit to a minor. HOWEVER, the down side was that when my daughter lost her wallet, we had to cancel all our cards on the account so we were all inconvenienced until new cards arrived. With the second child we obtained an account from a different company so that if a loss/theft occurs, only she will be inconvenienced. Also, it makes accountability easier, as I know that any purchases made on that card belong to her.
The lost wallet also taught us another lesson. We made a copy of every card and ID in each person's wallet. Now if anyone in the family loses their wallet, we will know exactly what was in it that needs to be cancelled and/or replaced. Make copies of the back sides of credit cards because that is often where the phone numbers are for reporting stolen/lost cards.
To the parent wondering about a teen credit card: I remember at a King PTA meeting last year a financial counselor, speaking on financing education, said that the largest debt that students graduate from college with is credit card debt. That being said, even though yours is responsible, I'd go for the checking account. You can solve the ID problem by getting him a California ID at the DMV. He just needs to take a birth certificate and social security card...My two cents.
I called my credit card company and asked them to add my daughter's name and send a card for her. It was very simple. Anything she buys shows up on my bill. I made some rules before I gave her the card. That was a few months ago. Seems to be working out fine.
We started my son out with a card on one of our accounts when he began driving at 16. In his second year of college he received many solicitations for credit cards in his own name with fairly low credit limits and all sorts of perks-- airline discounts, sports bags, etc. He picked one and uses it for his own incedentals and takes care of the bill himself. He still uses the one linked to our account to buy his books and purchase plane tickets so we get the bonus mileage for our account. We knew he'd be responsible and we've never had a single problem.
my daughters both were on our credit cards since age 14 and it worked very well. We can tell which postings are theirs. Wells Fargo has a credit card that the amount is deducted automatically each month from the account and that worked well for my college age daughter. The groundrule that the account is to be paid off each month set a good habit in place. I also have let them write checks when they need to (it was a surprise to me that their signatures will work on the checks), and this has never been abused (I always balance the checkbook so I would know). I think having practice with money management before college is very important. The worst thing that has happened is that once or twice an entry wasn't made into the register, but I caught it within a few days.
I got my daughter and son their own checking and savings account at Kaiperm Credit Union when they were 14. We are members of Kaiser HMO and they give FREE checking accounts to youth. My daughter who is now a senior also has an ATM card that doubles as a Visa card. She would complain some times when a store on Telegraph did not want to take her check but usually they did with just her Student ID card before she had a driver's license. I haven't got my son a card because he never wants to spend his money only invest it. My daughter is very responsible and I think having teens learn about writing a check and what to do with Birthday money - savings or checking accounts... Is very useful!!
Regarding the credit card for teens: AAA on University Ave. has two new cards that are essentially ATM cards that you can put a prescribed amount of money on for student's use. One is called Member One and the other is called Member Cash. My daughter used the AAA Member Cash card for her month-long trip in Germany last summer. It can be used th access money from over 480,000 ATMs in 212 countries around the world. You can choose the amount you want to put on it and add more while they are traveling if you want. The cards have a PIN number for security and are not attached to any bank account or credit account. The Member One card is designed to be used for domestic travel, everyday spending, like book-buying college, and gift-giving. Check it out!
I had a Capitol One Visa for a while. I didn't like it much, and cancelled. But some of the reasons I didn't like it might actually be *desirable* in a card for a teen (for teaching purposes)! 1) They tend to have pretty high interest rates 2) They have a very short or non-existent grace period. I recall one time where I paid the bill off on time, according to the due-date on their invoice. But the next month I had to pay interest anyway, because I hadn't paid the charge off before the 25 days they give *from the date of purchase*. 3) They are very strict with the payment date--if your check arrives even one day after the date due you WILL pay a late fee. 4) I seem to remember that I didn't like they way they calculated interest. I don't remember if they use two cycle billing or not--they might. (I know that First USA uses this method). Two-cycle billing results in you paying interest on the same charge for two months rather than one. It's insidious, but somehow not illegal.
All in all, not a pleasant card to have, IMO. But it might be a good card to train a teen with. If they can manage this one, they can probably manage any other card they would get in the future! Good luck, Dawn