Thursday, August 19, 2010

National Foundation For Credit Counseling

It is not uncommon for students returned from vacation with new ideas and interesting, a few extra pounds and a couple of tattoos. But here is something most college students do not take home this Thanksgiving: a credit card. Law reform credit card enacted last year prohibits lenders from issuing cards to persons under 21 years unless they can prove they can make payments or obtain a parent or guardian sign together. The provision came into force on February 22, so that when he starts college this fall, students will not be received by the CC issuers covered pizza coupons and T-shirts. The requirement is to prevent students from accumulating debts that are unable to afford. But it could also prevent us credit cards responsibly to build a good credit profile. On Twitter: Follow Sandra Block Young adults are graduating from college, no credit history may have trouble qualifying for car loan, rent an apartment, even get a job, "said Gail Cunningham, spokesperson National Foundation for Credit Counseling. Even with the restrictions, parents can help children build a college history credit. Alternatives to consider: • Add your child a credit card as an authorized user. In doing so, the child can use the map, but you are responsible for the account. The history of the card will be reported to credit bureaus on behalf of his son, who will help the child build a credit history. Parents, meanwhile, can track how the card is used. If the child is abused for your card, you may have abducted the child as an authorized user before things of hand, "said June Walbert, a financial planner with planning services Financial USAA. There are some drawbacks. If your child is running a huge bill and can not afford to pay, your credit will be damaged. Similarly, if you lose your job and fall behind in their payments by credit card, he, the damage is not limited to your credit file. The story of his son will be tarnished credit, too. Another drawback to authorized users is the amount of available credit. If you have had your card for a long period, you may have a credit limit of 10,000 or more y. Parents have to think about whether they trust their children with a lot of credit, adding that authorized users, Walbert said. • Co-sign a credit card for your child. This map is the name of his son, he also helps children build a credit history. As co-signer will receive a monthly statement, and the limits of the credit card can not be increased without approval. And because the cards will be issued in the name of your child, you probably have a lower limit on its own credit card, which limits the amount of damage it can do. But as co-signer will be responsible for the debt if the child can not make the payments, Walbert said. In addition, 'If there is a late payment or a payment or underpayment, if they go beyond their limits, which will affect the credit report with his parents, he said. Another inconvenience as possible: As co-signatories, you and your child have the same control account, "said Cunningham, which means it can not close the account without the consent of his son. For this reason, adding a child as an authorized user is generally a better option than co-signing a credit card, says Cunningham. 'If you put your student on your existing credit card, an authorized user, you have total control of this letter, "she said. "If Junior does not comply with the rules, I will not ask permission to close the map." • Find out if your child is still eligible for a credit card. Some students who get a part-time employment may be able to qualify for credit cards without a co-signer, Walbert said. The card can have a very low limit, but this is not a bad thing, because it limits the amount of the child can go. • Ask your child a debit card. With a debit card, you can control the cost of your child, and replenish the account, if necessary. The disadvantage of debit cards is that they will help your child develop a credit history. However, if your goal is to teach children to handle money responsibly, a debit card is a good first step, "said Cunningham? "Say:" If this person is, you get a credit card. "
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