When preparing to send your child off to college, one thing that may be on your mind is whether or not your child should have their own credit card. Credit cards for college students have their pros and cons.

The reason you’re likely asking yourself this question is that you know credit cards can be extremely beneficial in certain situations. Yet, they also have the potential to become financial burdens. To best answer this question, begin by reviewing some reasons why your child should have their own credit card.

Benefits of Having a Credit Card

As a parent, you want nothing but the best for your child. Throughout their lives, you’ve been able to provide for and protect them. Now that they are in college, you won’t be there to help them as quickly as before. That is where a credit card can provide peace of mind for you and your child.

  • Emergencies: Should unexpected expenses arise, such as a car breaking down, a credit card would provide the ability to pay for repairs immediately. This is extremely helpful if they are unable to get into contact with you right away, or you don’t have the cash on hand to pay for the repairs.


  • Supplies: Students will need to purchase books and other materials for their classes throughout college. A credit card would ensure your child will not fall behind in their classes because they cannot buy the required supplies.


  • Credit History: Time spent in college is an excellent opportunity for your child to build their credit history and score. This will be helpful when they purchase a car or begin looking for an apartment or home after graduating.

While there are many benefits to credit card for college students, there are also potential negatives.


Credit Card Challenges

It’s no secret credit cards can become tempting, especially to those without first-hand experience managing debt. You may be worried that your child will fall into the trap of frivolous spending or purchase items you wouldn’t approve of, such as expensive electronics, phones, or even trips with friends.

However, college is a time when many young adults will open their first credit card, frequently without parents knowing. Being hands-on in their decision to get a credit card will allow you to help them make smarter decisions and understand the importance of managing their credit card use.


Be Proactive With Credit Cards for College Students 

Being part of the decision for your child to get their own credit card allows you to help them avoid the harmful pitfalls of credit cards. Aside from simply providing guidance on spending and managing debt, there are two strategies to help keep spending under control.

  • Request a Lower Credit Limit

When you help your child apply for their credit card, request a lower credit limit, such as $500. With a lower limit, your child will not be able to amass substantial debt. They will have smaller, more manageable monthly payments. If they need assistance, the balance would be low enough that you could step in and help without burdening your own finances too much.

  • Open a Secured Credit Card

A secured credit card acts exactly like a normal credit card, but with one key advantage. You or your child will put money aside with your financial institution to cover the balance of the credit card, for example, $500. If your child is unable to make the monthly payments, the financial institution will use the money set aside to make the payments. This is a perfect option for those just learning to manage credit card debt.


Alternatives to Credit Cards

Line of Credit

If you want to avoid credit cards altogether, another option is a line of credit with the Credit Union. Just like a credit card, your child would likely need a co-borrower or co-signer to qualify. You can establish a line of credit with a small dollar amount, say $500-$1,000, which is then attached to your child’s debit card and checking account. If they need to use it, you have the control to advance the line as needed.

What’s the benefit?

  • The parent/joint owner can monitor activity and transactions online
  • Lower interest rate than most major credit cards
  • Builds good credit history
  • Is ready and available in case of emergencies
  • No chance of the line being increased without parent/joint owner’s knowledge
  • No chance of over-limit fees (transaction is simply declined)
  • 15-day courtesy period on payments

Linked Accounts

When your child has an account that’s joint with a parent/guardian at the Credit Union, you’re able to view their account activity and transfer money to them right from your own online account. This is a good option if you’re secure with your own money and have the ability to help financially in an emergency situation.

What’s the benefit?

  • Monitor their spending to help teach good money management
  • Transfer money online immediately if they need it
  • One-way access (they do not have access to your account, but you have access to theirs)
  • Freeze their debit card if you see suspicious activity
  • Doesn’t involve new credit at all
  • No way to overspend since you control how much money you give them from your own account


We’re Here to Help!

Not all credit cards are the same. Extravagant rewards-earning credit cards often come with high-interest rates and other hidden fees. These costs can lead to even more financial hardships.

As a not-for-profit financial institution, the credit union offers low-rate credit cards for college students without high fees along with alternatives to credit cards. To learn more about our credit card options, visit the credit card center on our website. If you’d like to speak with us about setting up a line of credit or joint account at the Credit Union, call, chat, text, or stop in. We’re here M-F 9am-4pm ET. (315) 671-4000.


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.