Now that another college year is beginning, I want to make sure that all the Moms and Dads have packed off the kids with one very important item:

A credit card.

Yep, you heard me right. And I do mean a credit card, not a debit card.

Listen up.

I love debit cards. Prepaid or linked to a bank account, debit cards are a great way for anyone to live within their means. Your adult children should definitely have a debit card.

But they should also have a credit card right now, for two related reasons:

– Having a strong credit score once they graduate will make their lives so much easier and affordable.

– Debit cards do nothing to help build a credit score. Credit cards do.

I wish it were different, but responsibly paying your bills and living within your means by using a debit card currently isn’t a factor in determining your credit score. And you better believe that today’s college students will be in better shape if they have a strong credit score once they graduate.

– A strong credit score can make it easier to qualify for a better car loan deal

– A strong credit score can help land a rental; many landlords check credit scores.

– A strong credit score can help open cell phone and utility accounts without having to make a deposit.

If your adult child doesn’t yet have a credit card, I would encourage you to reconsider. Of course, you need to step up to the plate and make sure they understand how to use the card responsibly.

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    Categories: college, credit cards, credit score, family, fico score