Student's first credit card

[Joan.of.the.Arch]

Any idea how much credit a college student typically has on a single card? My 19 year old just got his first card with $8000 credit. This amount surprised me. He did not use one of those student-geared applications that are all over the campus, but one that came in the mail at his permanent address. I do have complete faith in his being able to use the card only appropriately. He is as careful with money as his parents are. But still --- $8000 with only the promise of a rosy future career?

[poundwise]

The credit card companies do this with students because they have the expectation that if son or daughter gets into trouble with the card, mom and/or dad will bail them out.

[Like2Plan]

Originally Posted by Joan.of.the.Arch

Any idea how much credit a college student typically has on a single card? My 19 year old just got his first card with $8000 credit. This amount surprised me. He did not use one of those student-geared applications that are all over the campus, but one that came in the mail at his permanent address. I do have complete faith in his being able to use the card only appropriately. He is as careful with money as his parents are. But still --- $8000 with only the promise of a rosy future career?

My DS started out with $500.00 the first year. I think it increases by $500.00 each year. DS has also started to receive a bunch of CC offers in the mail. (I am trying to remember what I did to get DH and my names off the list of CC offers and get DS added to that, too. That will cut down on the need to shred incoming mail. )
DS doesn't use his CC much and when he does, he wants the charge paid off the next day. (I don't know what they taught him in HS about CCs, but it was pretty effective. )
Is your DS's CC in his name alone?

[disneysteve]

Keep in mind that for credit score purposes ideally you should keep your utilization ratio at 30% or less. So with a $500 credit limit, that means not charging more than $150. That's pretty worthless for a college student who wants to charge textbooks, school supplies and the occasional pizza or movie ticket or trip home. I would think something more in the neighborhood of $3,000 or so would be a good starting point. If a card is issued with a much higher limit, you can always call and ask to have it lowered.

[Like2Plan]

Originally Posted by disneysteve

Keep in mind that for credit score purposes ideally you should keep your utilization ratio at 30% or less. So with a $500 credit limit, that means not charging more than $150. That's pretty worthless for a college student who wants to charge textbooks, school supplies and the occasional pizza or movie ticket or trip home. I would think something more in the neighborhood of $3,000 or so would be a good starting point. If a card is issued with a much higher limit, you can always call and ask to have it lowered.

The two cards that DS signed up for both started at a $500.00 limit. I did call one to see if there was anyway it could be increased and was told no--it is incrementally increased after having a payment history (increases $500.00 per year I believe).

I was pretty dismayed at the limit at first because I was worried that it would not even cover his textbooks (and it was the main reason we wanted him to have a line of credit). The CC was specifically earmarked for school supplies only and he wanted all charges paid off immediately, so it worked out okay.

For the extras like pizza or movies and things of that nature--he receives a cash allowance.

[Joan.of.the.Arch]

Originally Posted by Like2Plan

Is your DS's CC in his name alone?

Yes, it is in his name only. For more than a year has carried a card from my account, on which he is an authorized user. But I did not think think the account was set up in a way that would allow credit reporting on him.

[Coleroo]

my gosh!


...my first credit card, which i received in March of 2001 (a few months after i turned 18) had a limit of $500 on it.

I still have the card today - and although I've received much higher limits on other cards, that one card has only been increased to $1200 thru the years.

[Joan.of.the.Arch]

Yah, you know, I think my own first card had a $400 limit, but that was years ago, before the card companies decided to recruit all the customers they could and charge huge interest rates and make much more money on fees and interest.

I was wondering what is the typical first card limit nowadays.

[mekish]

its good that they've shown so much trust in a 19 year old, if he manages it well, i'd have no trouble being approved for credit cards in the future!

[veronak]

CC debt get students all the time, I think it is wrong of these companies to prey on these kids. I actually got my first card at 16 when I had not clue and we all know what happened; thank God I grew up

[disneysteve]

Originally Posted by veronak

CC debt get students all the time, I think it is wrong of these companies to prey on these kids. I actually got my first card at 16 when I had not clue and we all know what happened; thank God I grew up

Ultimately, I think it really depends on the kid. I got my first CC when I started college. That was 25 years ago. I've never carried a balance, I've never paid a penny in interest charges. Credit card does not automatically equal debt. I think we've done a good job teaching that to our daughter and when she is a bit older, I will have no problem getting her a credit card of her own as I trust that she understands how they work and how they are to be used.

[Joan.of.the.Arch]

I had to keep reminding my kid to please use the credit card!