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Money Minute: Student credit cards


by Stephanie D. Neely, Treasurer City of Chicago


Starting college is a major milestone for parents and chil- dren. For most young people it is their first time living away from home. Every aspect of fending for themselves will bring new lessons, and that includes lessons in using and managing credit cards.


Stephanie D. Neely


One of the biggest considera- tions for students and their fami- lies is how to handle everyday expenses, and how to budget for future costs. There is no doubt


that using a credit card can make paying for things easier, but fam- ilies need to think carefully before giving a student more credit than he or she can handle. Families need to spend some time talking with their student, planning a budget and consider- ing different credit cards that fit the student’s level of responsibil- ity and needs. As Treasurer for the City of Chicago I am all too aware of the perils of overspending. I want to tell parents and students to be very cautious before they sign up for a first-time credit card.


A credit card is not for every- one, and not all credit cards are a good deal. Parents need to weigh the benefits and risks of a credit card. They provide flexibility, and the chance to build a credit score. But they also provide temptation to overspend and they require diligence and discipline to manage.


Even adults often have diffi- culty sticking to a budget, young people can be overwhelmed. Financial discipline is the key to successfully managing a credit card. Students who aren't ready for the responsibility of a credit


card can still get the convenience without the risk by using an alter- native bank product, like a pre- paid card.


If you decide your student is ready to handle a credit card, shop around and compare prod- ucts. There is absolutely no rea- son to get more than one credit card. Do not get tricked by teaser rates and giveaways.


Whatever your decision you will be helping to create habits that form the foundation of your child's financial future. Remember: it’s your money, your choice.


Chicago Defender • ChicagoDefender.com • November 30-December 6, 2011


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