What to Know Before Getting a College Student a Credit Card

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Financial literacy is an important lesson all parents want their kids to learn. From textbooks, tuition and library fees, it all adds up for a college student. A credit card can help your student build credit and discover a new level of responsibility while covering some of their new expenses.

Although many parents fear that their college-aged child may max out their credit within the first year, there are still real benefits to starting early! For example, having a credit card can help a college student qualify for loans, car insurance, rental application and even help their future job search. Here are some things to consider when getting started.


When a parent makes a child an authorized user of their credit card, it’s called piggybacking. If the parent has good credit, the child’s credit gets a boost. Building good credit is a must if you ever want your child to gain financial independence.

While becoming an authorized user has long been a popular choice for students with no credit, in some cases it’s the only choice. That’s because if a student can’t prove to the issuer that they have the means to pay their balances, then they probably won’t get approved for a card in the first place. The 2009 Credit CARD Act says people under the age of 21 now must have a cosigner or show proof of independent income if they want to get approved for a card in their own name. Many banks have student card options available now with extremely high interest rates which makes piggybacking more appealing.

The downside of piggybacking is that a college student’s decisions will affect the parents credit too. In some cases, parents are stuck with a hefty bill for the choices their children made. That’s why it’s so important that parents educate their children about financial responsibility and terminology before beginning this process.

Choosing the Best Card

A college student’s mailbox is usually overflooded with credit card offers! It’s easy for credit card issuers and banks to justify high interest rates because students normally don’t have a long line of credit history. Their pressing need to cover all their new adult expenses makes college students great targets for credit cards.  Depending on which card you select, there are benefits like free FICO scores or fewer penalties and hidden fees. This is why students should take their time to choose carefully. Because it can be difficult to get a credit card without credit history, college students tend to jump at the first offer even if it’s not the best offer.

Financial Life Lessons

As a college student continues to have a credit card of their own they will likely learn pertinent money lessons. Interest rates and rewards will become second nature to them over time. Responsible on-time repayments will help students build credit in the process. By growing accustom to the monthly bill, they’ll naturally feel discouraged from splurging on big-ticket buys outside of their means. These are all lessons that will carry with them for a lifetime.

On the flipside, if a younger person does not understand the value of money, missed payments and cannot manage their income, they may find themselves in a hole tough to dig out of.

At Litchfield Bancorp, we can equip you with the good, the bad and the ugly truth about credit cards for college students. After all, it’s important to encourage college students to do their homework before the test!

When did you get your first credit card? Tell us in the comment section below!







Jane Vannini
Assistant Branch Manager, Watertown

Author: Jane Vannini

Jane T. Vannini is the Assistant Branch Manager of Litchfield Bancorp’s Watertown Office. Jane is a graduate of Northwest Chamber Commerce Leadership program and has been a yearly reader for 24 years for the Chambers read-a-loud day. She is the treasurer of The Kathy Aeschliman scholarship. She was awarded a Paul Harris Fellow award from the Watertown Rotary. Jane is a United Way volunteer. She serves as Litchfield Bancorp’s chairperson, a small business volunteer, a member of the citizen’s review committee, a golf volunteer and has received twice, the volunteer of the year award. She serves as a volunteer to AKC at their Festival of Trees. She is a graduate of the University of Connecticut. She resides in Torrington with her husband of 38 years.