Youth & Money
Parents Can Promote Good Credit Card Skills
Monday, September 15, 2003
Meg Richards
The Post & Courier
A: The move from mom's house to the dorm is fraught with so many perils, preserving a fledgling credit rating hardly makes the list. But college students graduate with an average of $2,327 in credit card debt, according to a 2002 study by student lender Nellie Mae, and the number of personal bankruptcy filings by consumers aged 18 to 25 is on the rise.
Most students head off to school with a tight budget, a stern parental warning not to overspend and virtually no experience paying their own bills. Cash-poor, homesick and easily lured by the promise of instant gratification, college students are a top target for banks that issue credit cards.
"They're going out there like sheep for the slaughter," said Howard Dvorkin, president of Consolidated Credit Counseling Services, a non-profit group based in Fort Lauderdale, Fla. "It's like giving the keys to your car to someone who can't drive."
Banks and other credit card issuers converge on campuses every year, offering free T-shirts, Frisbees and coupons to students who apply for accounts
For parents who want to promote good habits from the start, Dvorkin said, the best defense may be a good offense. Before the school year begins, help junior set up a bank account with a debit card, which draws directly from a limited cash balance -- and can be good training for eventual credit card use.
"You have to have some faith in your kid, but you've got to teach them what to do," Dvorkin said. "You can't send them out there with no information." Parents who want to keep a closer eye on student spending can arrange for a duplicate bank or card statement to be sent home. A credit report can be another tool. If your college kid is already racking up debt, you can review their credit report with them periodically to see how they're doing.
