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Your Take: Should Students Get Credit Cards?

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Student StudyingOne of the big debates in personal finance is whether a college student should get a credit card. On one side you have people who believe that credit cards are evil, credit cards prey on the financially weak, and credit cards will bleed you dry. On the other side, you have people who believe that credit cards are dangerous but can be a useful financial tool for the financially educated and fiscally prudent.

I personally find myself in the second group and I liken credit cards to fire. Use properly and you can keep yourself warm and cook food. Use it recklessly and you can burn down your house and kill someone.

The problem with credit cards is that it’s so easy to get into debt. You can get your instant gratification without any of the hard work involved and you don’t feel the pain for many many years. This is a recipe for disaster for a student because it’s unreasonable to expect them to use them responsibly in the midst of their greatest taste of freedom.

When I wrote about the best student credit cards and listed some smart tips for college students, I understood the comments I got from people who said credit cards are evil and I was being irresponsible writing a post about them for college students. I wrote it because I think it’s better to educate someone than to shield and protect them.

What do you think? Should students get credit cards? Or should they avoid them like the plague?

(Photo: m00by)

{ 52 comments, please add your thoughts now! }

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52 Responses to “Your Take: Should Students Get Credit Cards?”

  1. Sizzle says:

    I graduated College a year ago, I only had a debit card and that alone gave me enough trouble

  2. Kyle says:

    I Don’t think students should get credit cards, college age kids just don’t seem to have the level of maturity to responsibly manage their spending to not overuse the cards.

    • Jim says:

      I disagree, I think college kids are mature enough, they just aren’t educated enough. They’re being trusted to make good use of a very expensive education and many succeed, having a credit card should be less difficult if properly guided and educated.

      • Aw, Kyle thinks I’m immature! (It’s ok, I still love you Kyle.)

        I got my student credit card at 19 (almost 4 years ago). I got into trouble with my credit card six months later, even though I knew better. But I got myself out of that trouble before graduation, as well.

        I think that, for some college students, a credit card is their best option to build a credit history. It’s not always a good idea to wait until after college – you’ll have a lot more trouble building a credit history. College students are given credit cards like candy – we know this. But after you graduate, if you have no credit history? Good luck starting one!

        Take my boyfriend for example – super responsible, but that also means he has no student loans, which means absolutely no credit history. I convinced him to get (and use responsibly) a student credit card before he finished grad school, so that he could get a credit history started. Because I’ve seen what it looks like when someone who’s not a student, and has no credit history, tries to start one. It’s not pretty.

  3. Eric says:

    I think you and I are in the minority Jim but I agree that students can and should benefit from credit cards. The root of the problem is learning about finances and that problem isn’t solved simply by banning cards for younger people.

    • Jim says:

      I would be OK with banning cards for younger people if it didn’t have an adverse effect. Right now your credit score is very important because lenders don’t want to lend and are seeking safety. If you have a good score, you’re getting deals that were give to people with “ok” scores two years ago. If you have an “ok” score, you are getting horrible deals now.

  4. Just because someone believes that credit cards are a bad idea for students doesn’t mean they are shielding or protecting them.

    You can fully educate someone on why not to use a credit card. That’s the ultimate approach I’d go for. Don’t hide it or just not talk about it. Put the pros and cons out on the table and then tell them to run like a mofo in the other direction!

  5. Ryan says:

    Hell yes they should, how else are they going to understand what debt is until they pile up soo much that their parents have to bail them out?

    Really though, I had the most fun thanks to some of the credit cards that I procured in college. I didn’t worry about the money I was spending only because I was confident that, one day, I’d be able to pay all of it back.

    If we have kids, I’ll try to make sure they understand what it means to have debt, and try to monitor it to a point. If they really want to do something bad enough, when they’re old enough, they are supposed to be their own person and develop their own responsibilities.

    No pacifiers Kyle, your kids are going to grow up to be pussies.

    • Courtney says:

      Agreed! If you don’t think your kids are responsible enough to handle a credit card (or at least learn from a couple mistakes), you really shouldn’t be allowing them to go off to college.

  6. SaveBuyLive says:

    It all depends on the student. Some people are just more financially responsible than others. If parents feel that their child is financially responsible then I think its fine for them to have a credit card.

    If they aren’t responsible maybe they should start with a a debit card or a card with a very low credit limit so that it’s harder for them to shoot themselves in the foot.

    It’s easy to imagine a number of different ways that students could be rewarded for responsible use and punished for irresponsible use. I don’t think we are doing ourselves any favors by flat out denying people credit cards just because they are students. They are going to have to learn how to use them eventually.

    • Jim says:

      I think starting with a secured credit card, which is like a debit card, is something that could be a very effective strategy. It’s like a learner’s permit, you only get so much freedom and you slowly grow into it.

  7. Justina Ee says:

    I think the question should be more of, should students be made to attend a compulsory class in their first semester, on ‘good money management’, which would also teach them the pros and cons of credit cards.

    I was fortunate enough to have an aunt who taught me to pay off my card in full each month, or not to use it at all. It’s not just about those free t-shirts and frisbees they give you when you sign up for cards. I used it to pay my College fees, and use the cash-back rebates to pay for a few meals!

    Why should students who are responsible be penalized because of their ignorant counterparts? The problem won’t go away, it’s merely being post-phoned!

    Also, I feel credit limits should be limited for college credit cards. Like, maybe a $200 limit. Even if they get 10 cards, $2000 is the max they can go into debt.

    • Jim says:

      I like the idea of a compulsory class but no colleges offer it! It’s important to make these decisions in the context of the world we live in and there simply aren’t many colleges with those types of courses.

  8. Susan says:

    My daughter is a sophmore in college and just recently got a credit card. I supported her decision – preferring her to use a low limit credit card for online book purchases than her debit Visa. I think it depends on the person…she is extremely responsible and pays her card in full each month (with her own money earned at her work study job). I view it as a way to build her credit score.

  9. ChristianPF says:

    Jim, that is a tough one – I am not quite to the Dave Ramsey extreme, but I don’t really recommend them… But at the same time, I have seen too many cases where parents said they are EVIL, EVIL, and so the kids stayed away from them UNTIL they got out of the house and then destroyed themselves financially because they weren’t educated about them… I lean towards the side of avoiding them, but it is a tough call…

  10. I know that my parents were always telling me not to get a credit card, but I have only benefited since I got one. I have ALWAY paid my card in full each month. In fact, I go online and pay it off after every purchase. I think students should be encouraged to get credit cards, but only after they have been very thoroughly educated about how they work and the dangers involved with them. I actually wrote a post about the dangers of credit cards written specifically for college-aged students: http://independentbeginnings.com/2009/02/warning-warning-credit-cards-can-be-dangerous/
    Articles like this are what students need to read. I think the same holds true for making big purchases (like automobiles) and financing them. Students just don’t typically think about how much they will spend in the long run.

  11. Fairy Dust says:

    I think credit cards are perfectly fine for individuals who can handle them responsibly — and those people come in all ages.

    Personally, I don’t think our son can (he’s a junior in college). He has a debit card right now and I see all the problems he has with that – money just burns its way through his pockets and there’s no thought of tomorrow or saving or worrying about any aspect of it regardless of how many talks we have or overdraw fines he’s had to pay. So giving him a credit card, even with an accompanying lesson in paying it off in full each month or using it “wisely,” would just be like offering food to a starving person and advising them to eat slowly so they don’t get stomach cramps.

    Meanwhile, my husband and I learned our lesson on the “evils” of credit cards the hard way (bankruptcy 25 years ago) so while we’re responsible cc holders now, I can’t say we’re exactly glowing models for our son to follow either.

    But I completely agree that other kids his age are fully responsible and able to handle credit.

    • For the reasons you mention, that is EXACTLY why you should get your son a credit card as fast as humanly possible. Don’t be a signer on the account, but get him setup with a credit card ASAP.

      This appears to be counterintuitive, but a credit card will allow him to fail faster and cheaper in the hopes that it will teach the lesson of responsible money management. The way this happens is (1) overdraft fees can stack up and surpass the fees of credit cards–over the limit, late charge, and interest paid–so this will be cheaper, (2) once he falls behind, creditors will harrass him from 8 a.m. until 9 p.m. daily, and (3) assuming he completely screws up, he’ll have difficulty in obtaining future credit to hurt himself with.

      Given a choice of fail now or fail later, I’ll always suggest failing now for a college student. That is the best time to fail compared to when he grows up and is raising a family only to have the problem persist and ruin his finances and potentially his marriage and relationship with his children.

      To execute fail fast, fail cheaper, do the following:

      1. Get rid of the debit card completely
      2. Have him sign up for a credit card
      3. Obtain cash advance pin number for said credit card
      4. Sit back and wait for life to teach in the best way it knows how…through failure

      • Beth says:

        Might as well say “Here’s a car, go crash it so you’ll learn what not to do on the roads. And by the way, I’ve tampered with the brakes to make it easier for you to fail.”

        While I do agree that making mistakes is a powerful part of the learning process, I think sabotaging someone is going to do more harm than good. Let him get a credit card, guide him how to use it, and then let him make mistakes (or not). Stacking the deck against him is just going to a) make him resent you, and b) not really teach him anything because he doesn’t have all of his financial tools at his disposal (you’re taking away the debit card).

        • Beth:

          You’ve missed the point. This individual is already demonstrating misuse of a debit card and it is more expensive than had he simply used a credit card. Having worked at a bank branch that collected over $1.5 million in overdraft fees, I can assure you that the overdrafts are more expensive than the fees and interest from a credit card. It is commonplace to see accounts that average double digits in overdraft occurences.

          The benefit here is that the credit card company will call him relentlessly until the situation is fixed. When he overdrafts his checking account, the bank won’t call unless it is a severe overdraft or two weeks has passed without a deposit.

          Your analogy again misses. He’s already driving the car over mailboxes on his way to a telephone pole in the future with no one screaming at him to stop. Having a credit card adds people on the side of the street screaming at him to stop driving recklessly.

          The deck is stacked against him currently and having a credit card can actually put them more in his favor over the long run.

          Ultimately when someone overdrafts but is still living comfortably, it is a matter of responsibility and self control. However, when third parties (collectors) get involved, the stakes are increased and attention is paid.

          This is true in this instance and it is also true that goals shared with others increases accountability and the likelihood of achieving those goals. Adding the element of the third party serves as a benefit.

          • Beth says:

            No, I’m not missing the point. His parents say he can’t handle a credit card because he already can’t handle the financial tools he’s got (a debit card). I don’t think a credit card will be a cheaper way to fail than a debit card. It will just be ANOTHER way for him to fail.

            The mom mentions overdraft fees, but doesn’t say whether the overdraft is a mounting debt, or just fees incurred because of careless use (but then the money is replaced). If it’s the former case, then your strategy might make sense. If it’s the latter, then I’d have to agree with the mother’s point that it would be just too big of a temptation. If a person can’t handle one responsibility, it can be very damaging to heap more on them that they’ll inevitably fail.

            But here’s a thought: What if they got rid of the debit card as well and went to a cash-only system? If he has to pay in cash, he’ll have a visual reminder of when he’s running low, and when it’s gone, it’s gone. No overdraft fees, no credit card debt. Maybe that way he’d learn how to plan and prioritize.

          • Beth:

            No doubt a cash only system would be best for this guy. Banks do still offer ATM cards that do not act as debit cards and this is the best alternative.

            BTW, here’s the math on the overdraft versus credit card assuming similar fee structures:

            Debit Card Overdraft: $35 initial fee + $5/day fee

            Overdrawn 2x in one month over the weekend and it’s $100 in fees for the month.

            Credit Card: $35 over-the-limit fee + $35 late fee = $70 in max fees.

            Interest charge would need to be $30 or more which would equate to a $1,200 balance @ 30% interest.

            A credit card would be less expensive than a debit card assuming he requires swipe-able plastic and won’t go for an ATM card. The real devil of debit cards is the way banks hit folks with multiple fees on the same day for transactions as little as $1.

            John Maxwell wrote a book and created a whole curriculum around Failing Forward. In it, he explains that it can be a very good thing to fail, fail, fail, and fail, but in the end succeed in the bigger picture. I don’t think a $1,000 credit card that he will ultimately implode will rise to the realm of catastrophic, but I’d much rather him fail often now before he has REAL responsibilities like a wife, kids, house payment, job, etc.

          • Beth says:

            Yikes! I had no idea overdraft fees were so high. (I don’t think mine are that high, but I’m in a different country so I don’t know what would be comparable).

            That book looks interesting. Thanks for pointing it out :)

  12. I like your “fire” analogy.

    We have to take off the training wheels at some point with our kids and it’s up to the parent to decide when the wheels come off.

  13. Alan ZHeng says:

    definitely not. Not just because I’ve fallen into the college CC debt hole…but just the fact that its human nature as a young kid in college to spend. Especially if they’re in a out of state school with no parental supervision. If a college kid has a credit card, it should be their parents, so that the parents can monitor the spending.

    With no oversight, any 18 year old will swipe over and over again…

  14. Steven says:

    At the beginning of the semester, you’re without financial aid for 1.5 – 2 weeks, and you’ve got rent, food, and books to pay for.

    I don’t have rich parents, and they couldn’t pay the bills for me. And when I did receive my financial aid, I paid everything off and I didn’t blow my money on random crap, I made it last the whole semester. I put everything on the credit card and paid in full at the end of the month. I treated my credit card like a debit card. Never bought anything I couldn’t pay for.

    Since I just graduated from college, my comparison of credit cards is with alcohol. Ease into the world with parental supervision, or have a block party away at college where anything goes.

  15. Cathy says:

    I am 100% in agreement with Fairy Dust. I’m 21 (senior year), I got my first credit card at 18, I pay it off in full every month, and I have a great credit score. I work 10-15 hours a week at two part time jobs, and I don’t get any help from my parents.
    I do realize I’m in the minority of people my age who know what they’re doing with their finances, and that not everybody is ready to take on debt yet.
    Financial education is key, and in fact I’ve been teaching personal finance seminars to students on campus through a local credit union. There’s a career center, public service center, etc. on campus, but financial/how to live on your own services are severely lacking.

  16. Raz says:

    I believe it depends on the mentality of the student on whether to get a card or not.

    I myself have 4 cards(Senior Year college student) as well as manage my parents finances each month. I am able to keep track of the amount getting charged vs the amount in the accounts while keeping a cushion level of funds for any emergencies that might arise throughout the month.

    This requires knowing the amounts in the accounts at all times. This deters frivolous spending as you have to pay the bills in full, feed yourself and family, as well as keeps the lights on.

    The use of the cards help attain extra cash-back which charging and paying off the essentials like gas or trash bills.

  17. sara l says:

    I think getting a card before college is the best course. Your parents teach you how to respect others, cook, clean your room, and a million other things. They should also teach you how to responsibly handle credit.

    Every time I added something new my mom added a responsibility. When I got my license and permission to use her car ocassionally I also go a cell phone- with the bill. When I got a clothing retail job my mom said it was then my responsiblity to pay for casual clothes and anything else non-educational. My first credit card (with a low limit) came with the same restriction. I could only spend money I already had and needed to pay in full each month. Failure to do either meant loosing all other privilidges.

    Whatever other issues I’ve had, credit card debt has never been one of them.

  18. AverageJoe says:

    Absolutely get the card! I work at a bank branch near a university. We don’t have a student credit card, but I think we should. For our regular card, you need a minimum annual income of $15,000. If you didn’t get a student card, you’d have to start building your credit with a secured card (which not many banks offer, and which sometimes have fees) or a department store credit card (if you can get approved). Meanwhile, those who get a card in freshman year have a big head start on building credit history.

    Using the card responsibly is critical, obviously. So I would propose a low initial limit of $500, along with a website for the card that teaches how to use a credit card responsibly and gives students special rebates on campus events. As the student progresses through college, the limit goes up (as appropriate), so that by the time graduation comes, the student already has a 4 year credit history.

    For the student, better to make mistakes (and feel the pain, and learn from them) on a $500 credit card than a $5,000 credit card, or a car loan, or a mortgage!
    For the bank, potentially, a customer for life.
    For the university or college, creating loyalty among alumni who actually got some real-life skills from the card & website, not just a t-shirt and a frisbee. Everybody wins!

  19. Kenny says:

    Examples of giving cars to students, or kids playing with fire, or allowing kids to go on a vacation by themselves, or letting a 12 year old own a laptop or any of those ‘things’ that need ‘responsibility, are simply a question of ‘You and Your Kid’. So, the answer is It Depends. Why?

    Scenario 1: If your kid is irresponsible, give them a debit card. Use what you can, when you can and when you run out of money it is done. Serves the same purpose a credit card with an automatic protection / limit built-in.

    Scenario 2: If your kid is responsible, but do not have the experience of what will happen if you give him/her a credit card, give them a secure card for year 1 and see what happens. Secure cards are set for lower limits with money deposited with the bank against the limit. Automatic protection (I am pretty sure).

    Scenario 3: If your kid is responsible (like the Sr Yr student who chimed in above), then you give him/her their own card to start building credit. This is the ultimate preferred goal, and Mr Sr Year Student, WAY TO GO MAN.

    Scenario 4: If your kid really wants a credit card, but are not easily able to fit into Scenario 1, 2 and 3, give them your own card (get a new one credit card), set a low limit on it, and give them the responsibility to pay it off at the end of every month. Check the account online. In any month it is not paid off, temporarily suspend the account for 3 months, after paying it off for them.

    Bottom line is ‘Discipline’ about anything gives the person the responsibility and accountablity needed, but those features do not come easy and depends on the ‘free will’ personality.

    My kids will be in Scenario 2 since they are teenagers right now, and I have been teaching them since age 10 on what is a credit card, what is a credit card bill, and when the bill comes, why pay off the entire balance to the point that our Overall Total Debt = $0.00 (no mortgage either).

    It is not hard, but lending money is just like borrowing a shirt from a friend. There has to be an element of thought and shame going into it (although shame is an extreme word so don’t jump on me). I use that word since it is what someone is doing when they buy a shirt / dress / MP3 player and do not have the money for it. You are borrowing / lending to ‘have’ the possession, without having the ‘power to buy’.

    I teach my kids “Power to Buy” stays in the heart and the bank account.

    Frugal, Dollar, Bargaineering and other sites are great sites for such a discussion, but at the end of the day/week/month/year/decade, if you do not get the ‘internal power in your heart’, the ‘discipline’ and the ‘bank balance’, it all goes down quickly!!!!!!

    There is philosophy in the above, and I preach it, but after knowing it, practicing it, and believing in it (110%).

    Good luck y’all…..

    Kenny (KKP_Investor)

  20. TStrump says:

    Getting a credit card in school is a great way to build your credit rating … if you’re responsible.
    The problem is, most student get into trouble – myself included – and spend like crazy when they don’t have any money coming in.

  21. I have three sons, two out of college and one 1/2 way done. They are so much better off than their contemporaries because none of them had credit cards in college (and only one has one now, for business travel. All of them are 100% debt free. Those that want to play in the credit game – a game run by the credit masters – by all means get your cards and become a pawn in the finance game of life. Those who want to have a financial life that they control, forget the cards. You will not regret it.

  22. AverageJoe says:

    Debit cards are not necessarily better than credit cards in terms of fees. Depending on the bank, it may well be possible to overdraw your account by using a debit card, and cause overdraft fees. Some banks call it “courtesy overdraft”.

    In addition, if there is a dispute with a vendor on a debit card purchase, the cardholder files a “Reg E” claim, which can take up to 10 business days to resolve, during which time the money is missing from the account.

    If there is a dispute with a credit card purchase, you are only tying up part of your credit limit, not your bank account!

  23. It is so easy to forget to pay your $30.00 bill on time, thereby setting in motion a landslide of late fees, interest, etc. College students have a lot on their plates.

    So…I put my son on our AMEX and he has his own card. But we get the bill. And he pays us back. So far, he has not abused the card.

    Daughter will get the same.

  24. Hannah says:

    You’re asking the wrong question. Should stupid people be allowed to have credit cards?

    It doesn’t matter when they get their first card, if a person is stupid enough to accumulate credit card debt, they will do it at any age. It just so happens that most people turn 18 around the time they go to college and get their first card asap. But really, it has nothing to do with age. I bet we all know older adults who still can’t use a credit card properly.

    And you know what? Those of us who know how to take advantage of the credit card companies thank those stupid people who can’t manage their credit. It’s their interest payments that give me my cash back rewards.

    • Beth says:

      Hannah, I agree with you! I noticed that too many of these comments focus on how responsible the student is, not the parent. If we’re relying on parents to teach their kids good habits, shouldn’t we also be talking about how responsible the parents are with credit?

      I’m glad my parents taught me how to be responsible with money. I didn’t magically learn how to be responsible with money when I hit college. I started learning before my age hit the double digits.

    • I don’t use credit cards for many reasons and among them is the fact that should I use one and pay the balance in full monthly, I am contributing to the debt problem in our country.

      Consider this scenario: If all of the ‘smart/responsible/savvy’ credit card holders cancelled their accounts tomorrow, credit card lending would become a much higher risk proposition for banks. The result would be the lowering of credit extended to borrowers that would thereby reduce the total debt in the market.

      Your comment about ‘stupid’ is both interesting and naive. Interesting because if you know you are ‘gaining’ from the ‘stupidity’ of others, would it not be the responsibility of the ‘enlightened’ to alleviate the problem? Your comment is naive insomuch as the majority of those that have very real struggles with debt are hardly stupid. They are normal people that have struggled with debt for a variety of reasons. To believe that it is a shear matter of stupidity is…well…naive.

      • Beth says:

        So by your reasoning, those of us who use credit cards responsibly are actually responsible for the credit card debit of others?

        Does this also apply to mortgages? After all, wasn’t it mortgages that significantly contributed to the economic crisis in the US (which had a domino effect around the world?) Should I avoid getting a mortgage too because some people get in over their heads, and the bank is relying on me to be responsible? Consider this scenario: all of the smart/responsible/savvy people decide not to get mortgages (or car loans or lines of credit). That would make it impossible for ANYONE to get credit.

        I’m not attacking your points — Oddly enough, I’m starting to agree. I’m just wondering how far you could take this argument.

      • Jim says:

        I have to disagree, credit card companies make plenty off your purchases alone. Credit card companies charge merchants very high percentages (~3%) of the sale, which is often more than what you would get back in cashback (1%). They may not make as much from you as someone paying double digit interest rates but that 3% is practically guaranteed, they don’t need to try to collect it.

        I don’t think “stupid” or bad credit card users subsidize responsible credit card users.

        • Beth:

          The point I’m making relates to credit cards and other short-term consumer debt because the group that pays the balance in full each month truly doesn’t need a credit card. A debit card is equally convenient and has similar features to credit cards.

          Your point about housing is a bit mushroomy and the analogy isn’t clean. If a homeowner had the ability to pay his/her entire balance each month, then yes, I would also say he/she doesn’t need a mortgage. The same is true for someone that can afford to pay cash for any purchase but elects to use a debt instrument instead.

          As to the causes of our financial woes in the last couple of years, I’d say it was a helluvalot more than just people buying too much mortgage.

          Jim:

          The fees to merchants vary based on network (V, MC, AMEX, DISC) and the issuing credit card company does NOT collect the entire fee. A good chunk is siphoned to the network and to merchant processing companies. The issuing company would not survive on this revenue stream alone and that is why any credit card issuer relies on revenue from card holders that do not pay their balances in full each month.

          Years ago, one of the most popular credit cards in the marketplace was the AT&T Universal Card. It was the most widely held credit card at one point and the product was failing. Since the product wasn’t making money, it was sold to Citibank where there were major changes.

          First, Citibank dropped the average credit quality of the pool of card holders. Next, they strengthened the rewards program and attempted to move ‘BIF’ (balance in full) payers to other products with larger rewards to induce overspending. Finally, the card re-emerged with a much lower percentage of BIF’s and the brand became very profitable.

          The only company that truly has a model to make money without interest is American Express. If you speak with merchants, you’ll find that their fees to merchants are considerably higher AND many of their cards come with annual fees.

          One of the reasons AmEx was profitable for many years while having a balance in full card offering is because they extended credit only to those with very high credit ratings. To compete, they’ve brought their offerings down the credit worthiness scale considerably and now are paying the price.

          Credit card companies are writing off around 9% (source:Fitch’s Jan Report) of their accounts right now. There is no other way to explain their business model other than it relies on fees and interest. Fees from processing, fees from over the limit charges, fees from late payments, and interest on non-BIF payers. You can label it however you like, but non-BIF payers subsidize a great deal of the credit card issuers operations including BIF/responsible/savvy card holders.

          If you get a chance, watch ‘Maxed Out’ and you’ll see some of what I’m talking about. In addition, whenever there are hearings on the Hill involving the credit card industry, turn on C-SPAN and watch. Seeing the CC industry execs testify is very revealing about their practices.

          The bottom line for me is credit cards are useless and gaining the system corresponds to someone else paying a pretty stiff price. I don’t know, maybe I spent too much time as a collector at Citibank and heard too many God awful stories from card holders drowning in debt, but for me, I’m done with the whole lot of it.

  25. Cheap Chica says:

    I think that a credit card for anyone is a bad thing. But a debit card is fine, as long as a budget is set and followed.

    Another way, for me, is to get my kids prepaid cell phones. I don’t mind paying up front for the minutes and not have a long term contract eother.

    I got a Tracfone for $30 that cam with an equal amount of minutes so the phone was kinda-sorta free.

    • Beth says:

      I disagree that credit cards are a bad thing for everyone. I use mine like a debit card (I only spend money I have, and I pay it off every month). The credit card offers things like consumer protection and reward miles that I don’t get with the debit card.

      I’m careful with my finances, and I don’t see why people like me should be lumped in with people who aren’t. To me, a credit card is just a tool to be used if I choose, not a necessity.

      (Incidentally, my parents let me and my siblings get a card our final year of university — early enough to establish some credit, but late enough to get the “freedom” thing out of our systems).


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