| Is your college-age child finding it difficult to get a | | | | will often issue credit cards to clients who have |
| credit card? Many students face a catch-22 when | | | | proved, over time, to be financially responsible. |
| applying for their first card. Some card companies | | | | Retail Cards |
| market their products specifically to students, yet | | | | Like bank cards, credit cards from retail stores are |
| the students often get rejected when they apply. | | | | relatively easy to obtain. Try to select a store that |
| Why? Insufficient credit history. If you don't have | | | | your child will shop at, but not one where you think |
| credit, many companies won't extend credit to you. | | | | they might be tempted to spend beyond their |
| Thus, the dreaded credit catch-22. | | | | means. Make sure your child understands that the |
| If you're a parent who is concerned about your | | | | key to building a good credit history is to charge a |
| child's credit score, take heart. Here are five | | | | small amount every month, then pay off the balance |
| strategies for getting them started down the path to | | | | in full. |
| good credit. | | | | Secured Cards |
| Car Loans | | | | Secured credit cards are another option for teens |
| Teenagers eventually need cars, and it often falls to | | | | and young adults who are trying to build up their |
| parents to provide those cars. But the teens should | | | | credit. These cards are secured by a deposit made |
| be involved in the paperwork, too. One of the | | | | by the card holder into an account that is set up |
| simplest (and most overlooked) ways to start building | | | | specifically for this purpose. Then, if the card holder |
| your child's credit is to get them to co-sign for their | | | | doesn't make their payments, the card issuer can |
| car loan. Once their name is on the contract, they will | | | | take the money they're owed out of that account. |
| begin to receive credit for timely car payments. | | | | Since this significantly reduces the risk to the issuer, |
| Your Own Cards | | | | banks and credit card companies will issue secured |
| If your child is trustworthy, you can add them to | | | | cards to applicants who might not qualify for |
| your own credit card accounts. Any credit history | | | | non-secured cards. |
| associated with your credit cards will then influence | | | | With a little pre-planning and strategic thinking, you |
| your child's credit score. | | | | can have your child's credit up and running in no time. |
| Bank Cards | | | | Whichever card you and your child decide to go with, |
| Start a checking or savings account for your child | | | | emphasize to them the importance of not carrying a |
| while they are in their early to mid teens. Make sure | | | | balance, lest they get mired down in fees, penalties |
| that the accounts maintain a positive balance. Then, | | | | and interest. Your child might think you're nagging, but |
| by the time your child is ready to head off to | | | | since when has that stopped a good parent from |
| college, they will already have a positive history with | | | | getting their point across? |
| their bank. This can be very beneficial, because banks | | | | |