News-Record.com

Thursday's No. 2 editorial.

For a generation of college kids that thinks money comes out of a machine, having a credit card is a no-brainer. Parents, however, may have second thoughts as bills start rolling in and budding credit ratings take a hit.

When students invade campuses in a few days, they’ll be met with a barrage of enticing credit card come-ons. Some have the schools’ blessing. Kickbacks from banks for campus exclusives can seal such lucrative deals.

And a fertile market it is. A recent survey reported that 42 percent of college freshmen have credit cards. By senior year, the number jumps to 91 percent and four cards per student.
The more sobering statistic is the average card-related debt: $2,700. Falling behind on payments inevitably leads to steep penalties and weakened credit scores. Card issuers that always seem to hold the upper hand count on, and likely will get, parental bailouts.

A little prior financial planning is in order. Rather than credit cards, experts recommend debit cards that allow parents to keep closer tabs on students’ spending. The downside can be costly transaction fees.

But if a credit card’s the choice, shopping the Internet can result in a better deal than what’s usually available on campus. Experts say a credit card should never be used for high-dollar bills like tuition. There are lower-cost, longer-term options.

Finally, parents are advised against card co-signing that can result in paying off big debts they didn’t run up.

Legislation pending in Congress could prove helpful. It would require students younger than 21 and without jobs to get written parental approval to qualify for a credit card.

That makes sense. Parents should not give permission until their sons or daughters demonstrate financial responsibility. Those lessons should be learned well before college beckons.