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Credit Card Tips for Your College Student

These do's and don'ts will help young adults keep from racking up debt

4. DO discourage your child from applying for several cards at a time

Suggest to your child that he be selective in choosing which credit cards to apply for, so it doesn't hurt his credit score. All credit card applications show up as hard inquiries on a credit report.

Too many inquiries drag down your credit score, since inquiries stay on your credit report for two years, and they count against you — for the purpose of calculating your FICO credit score — for one year.

1. DON'T overlook student credit cards

If you think your student is responsible with money and can manage to pay off credit card balances before the end of each month, consider the benefits of a student credit card.

These cards offer rewards such as cash back on certain types of purchases or airline miles and discounts for travel.

Just make sure to read the fine print for information about annual fees, interest rates and other terms.

2. DON'T forget to set specific guidelines and spending limits

Whether or not you add your child to one of your credit accounts or you advise her to apply for a separate credit card, it's important to talk to your college-age child about the prudent use of credit and when credit cards shouldn't be used.

It's far too easy to lose track of money spent while in college, with tuition bills each year — not to mention books, supplies, food and other expenses.

Create realistic spending limits and urge your child to stick to those limits. Also, recommend that your child avoid using credit cards for routine day-to-day purchases that could easily be paid for with cash. Ditto for big-ticket items that he or she may not be able to pay off within the month.

Similarly, if you want your child to use the credit card for emergencies only, say so.

Despite the high credit card bills often racked up by college students, those four years spent earning a degree don't have to burden your young adult child with unmanageable debt.

By following the do's and don'ts listed above, your son or daughter can learn lifelong money-management skills and keep credit card debt to a minimum — even while he or she is pursuing a higher education.

Lynnette Khalfani-Cox, The Money Coach(R), is a personal finance expert, television and radio personality, and regular contributor to AARP. You can follow her on Twitter and on Facebook.

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AVOIDING FAMILY LOANS: Personal finance expert Lynnette Khalfani-Cox discusses why you should avoid lending money to friends and family and what to do if it's unavoidable.

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