Current college students have found that there are multiple banking options available when it comes to accessing funds that may be required to make certain purchases, like books, food, or for emergencies during the semester, but parents have often wondered how they can reduce the risk of student debt in relation to certain lines of credit like student credit cards, as many are currently concerned about rising debt costs related to student loans and do not want their students to have other debts, like those from credit cards, when they graduate college. While there are opportunities available for students to get credit cards even though changes were made as a part of the CARD Act that limits the accessibility of unsecured student credit cards, parents and students also have options that may be available beyond a simple credit card.
Many argue against giving a young student a credit card, or even students who may be upperclassman, due to the fact that it can lead to financial troubles if responsible use is not implemented. We have seen numerous cases of students who get a credit card, charge an excessive amount, and are unable to pay even minimum monthly payments on this obligation, which can do damage to not only a student’s financial situation but it also hurt their credit score and set them in a position where they are starting out their life as a young consumer in from negative point.
However, the students are also looking into opportunities that may be available from a simple checking account as this can be one way that students not only can save money but parents may also be able to help finance certain purchases without the student going into debt as a result of credit card use. Many students have, in the past, been able to responsibly use credit cards but there are problems that arise, which is a similar situation with student loans as well, but a checking account may help reduce risk when it comes to a student’s spending practices.
There are those who argue that students can benefit from using a credit card, if they are properly instructed on how to make charges, budget, and repay their debts in a timely manner, but for parents who have been hesitant to co-sign for a student credit card, many student checking accounts has been an alternative as they allow parents to, once again, offer funding assistance to their student without the worry that of student may go beyond their means to repay when using unsecured credit.
Despite the fact that there are arguments both for and against student credit cards, if a parent decides that a checking account would be best there are still some issues that may arise if financial responsibility is not used. Many student checking accounts will not require a minimum balance, allow for online access so that students can monitor their balance, and also come with a debit card that can be used for a variety of purchases, but both students and parents need to understand that there are still issues that can arise like overdrawing. As a result, students and parents who feel that these alternatives to credit cards, specifically student checking accounts, many to be well researched so that a parent or student can explore what offers are available, look for ways to avoid overdrawing that may come from linking one of these accounts to a savings account or putting other certain protections in place, but we have seen more parents and students looking closer at these checking accounts simply because each bank may offer different benefits to the customer which will obviously have to be explored on a personal level to see which account is best for a student’s needs.