Should Students Have a Credit Card?

A common question I receive from parents is whether or not their son or daughter heading off to college should have a credit card. While it isn't a simple yes or no answer that applies to everyone, there are some significant advantages that a credit card at a young age can offer. Building a strong credit history is extremely important these days, and the sooner you can establish this history, the better. From obtaining loans, to even getting a job, credit score is increasingly coming into play.

But the real determining factor is whether the parent educates their child on the benefits and drawbacks of a credit card. Parents need to take an active role and teach them how credit cards work, how the monthly payment is calculated, and the severe consequences of missing a payment or buying more than they can afford. If done right, a student armed with a credit card will be well on their way to building a strong financial foundation.