College Students and Money (1)

Now that you've paid the first semester's tuition bill, you can sit back and breathe a sigh of relief, right? Brace yourself, you're about to face the ultimate college financial crisis: sending an 18 year old off with a book of checks and access to credit. To avoid a call of "Help, I've fallen into credit card debt and can't get out", don't let your kids leave home without knowing the family's financial aid policy.

Downplay credit cards - kids over 18 don't need your permission to get them but your advice on how to use them can help avoid common student traps. Parents need to define "emergency" before counting on their kids to reserve their cards for emergency only use. To a student, an emergency could be a weekend ski trip or a pizza party for the entire dorm the night before finals. One solution, is to provide your student with a credit card to buy books and school needs at the beginning of the year and then get the card back.

Source: Bodnar, J. (1999, September). Making cash king on campus. Kiplinger's Personal Finance Magazine, p. 116.