should i do this?

[irmanator]

My Daughter who is 18, graduated highschool, is signed up for college this fall, paid for it herself, has a full time factory job, has been pretty responsible with paying the 2 bills (cell phone and internet) and tuition. She wants me to co-sign for a laptop on pmts for college. Because of her age she has no official credit history. She plans on paying it off asap. Her reasons - she doesnt have time to save that much and she needs to build a credit record. (she paid tuition cash so no loans)

would you do it and why or why not?

I am sure it will be paid but do i want her to get into the habit of financing things this young?

[disneysteve]

The standard advice is to never co-sign a loan, but there are certainly exceptions. My father co-signed for my first credit card (back then college students couldn't get cards because they had no income - imagine that).

You know your daughter best. It sounds like she is financially aware and responsible and understands the consequences of her actions. As long as you have the money available to make the payments if something goes wrong on her end (loses her job, for example), this is probably one of those cases where co-signing is perfectly ok.

I think the "habit of financing" is a non-issue here. This isn't a impulse or luxury purchase. It is a computer that she is most likely required to have for school. Make sure she shops around and gets the best price, but beyond that, she probably can't be without it.

[red92s]

A computer is becoming increasingly necessary for school, and having a laptop is exceedingly convenient for getting school work done wherever you end up.

Why not open a low-limit student credit card in her name to establish a payment history? She should be able to qualify without a co-signer, and with the 6 months 0% APR intro many cards offer she should be able to pay it off without accruing any interest.

It sounds like she is pretty financially responsible already (good job on your part). I don't think I'd worry too much about her becoming dependent on financing. Sounds like she is much more financially literate than many of her classmates. It'd probably be out of character for someone that has worked very hard towards savings goals in the past to have a radical departure in habits.

[irmanator]

thanks, I wanted to say yes to her but sometimes i doubt myself. She is pretty good, it just gets very tempting once you can get credit to go crazy. Maybe it would be better if i just did it and had her make pmts to me to pay it then she wouldn't get a ton of new preapproved offers to temp her? I guess I am on the corner of she's a kid in need of protecting and she needs to be allowed to be a grown up and i can't draw the line.

[red92s]

Maybe it would be better if i just did it and had her make pmts to me to pay it then she wouldn't get a ton of new preapproved offers to temp her?

. . . You'd loose the benefit of building a credit history. You could have her get a card and do the Pre-Screen opt-out, preventing most pre-approved offers. Why not have her make the laptop purchase on her own card, then turn the card over to you to hold while she makes the payments. It's still available should a true "need" arise, but not carrying it or having impulsive access would reduce the temptation to go on a "I got an A" spending sprees.

[kork13]

I'll just echo red on this.... you can opt out of those credit card offers. you call a phone number and they'll stop. I did that over 2 years ago and have only gotten 1 offer since then--from my college alumni assn.

I would also recommend getting her a card. check out the options online. if you get her a credit card to start out with, she can just use it to pay little things, like her phone and internet, pay the card off every month, and that will build a credit history very quickly. I did the same when i started college, and now i have a good history behind me to back myself up with.

[Coleroo]

i agree completely on the credit card idea. She'll be able to get one on her own easy. I got my first CC at age 18 in 2001 while working a min wage ($5.15 / hr) job. Credit limit was $500 and I had no credit history whatsoever. A laptop can easily be had for $500 nowadays.

In today's credit happy world, I dont believe co-signing is ever a good idea.... there are too many ways to get credit on your own to warrent the need for a co-signer.

[maat55]

I did it for my daughter on three occasions and all three times she paid on time and paid off early. I KNEW my daughter would do the right thing. Are you that sure of yours, is for you to know.

A better plan would be to have her save and pay cash. Or you buy it as a gift.

[Joan.of.the.Arch]

I, too, have a college kid with a good head on his shoulders and if he asked me to do this I would do it with no hesitation. I sent my kid off to college with my own lap top as I no longer needed mine for work while occasionally traveling. He used it a lot and it gave up the ghost this year. I offered to buy him another. He is a heavy user of computers for his studies, but he declined my offer. It turns out that computers are so very, very available on campus that is not a huge advantage to carry one. And back at home, he has his laptop which serves him even better in many ways. So while I agree that a computer is a necessity for students, they are so omnipresent that there is no trouble getting to use one (including computers that you can load your own software onto!). And with the portable storage devices, laptops are less necessary. If she has a desktop at home, she is probably well set.

My son says he has only seen two people take notes in class on laptop. Everyone else uses the old pen and paper method.

So, she just may need to think twice about whether the laptop is a want or a need.

Lastly, some payment plans for computers are a rip-off. One can end up paying three times their usual value, so have her watch out for that kind of scam.

All that said, I would still co-sign if my responsible daughter needed one.

[Coleroo]

My son says he has only seen two people take notes in class on laptop. Everyone else uses the old pen and paper method.

So, she just may need to think twice about whether the laptop is a want or a need.

I'm only 25, and I never saw anyone in college taking notes on a laptop. It's something I would imagine would happen only in a class of 100 or more when, of course, the ratio would make it probable that laptop note takers would show up.

That said, I couldn't imagine getting through school nowadays without a computer. Every paper and report in today's classroom MUST be typed (teachers don't accept handwritten anymore...at least in my experience...and that's been the case since 1999). Going to the library to type up every single report is quite burdensome as well and not always easily done. So I would say that the laptop is definitely a necessity.

[disneysteve]

I never saw anyone in college taking notes on a laptop.

I don't know about taking notes, and certainly it depends on the school, but I know at some schools the lectures actually involve the computers. The professor, rather than putting a diagram on the board or projecting it on a screen, will send it right to the students' laptops that they have with them at their seat via the wireless network. That way everyone has a perfect view and everyone has the info to review later. Some schools have gotten very tech dependent. Many require incoming students to have a computer and give particular specs so that all students have compatible systems.

[MonkeyMama]

The rule is never do it.

My parents taught me about money and were always willing to help. Though I don't think they ever co-signed a loan we asked them to once and they agreed. I appreciate the help. I think there are exceptions to every rule.

I think you just have to be comfortable that if anything happens you are responsible for the loan. Likewise, it should be a rather small loan - much better than financing a car or a student loan. Maybe she won't have to ask next time as she builds credit.

(I'd also recommend her getting a credit card and paying it off monthly so she can build her own credit. I got my first cc at 16).

[Like2Plan]

irmanator,

There are several goals you are trying to achieve establishing credit and buying a computer.

Do you know how much it is for the laptop ?

If your DD is enrolled in college, it may be possible for her to get a CC with a $500.00 limit. Each year they increase the credit limit by $500.00 until graduation.

As far as co-signing. That is a tough one. Here is a problem which sometimes crops up. For whatever reason, the payment is made late (or not at all). This will reflect on your credit score. Sometimes, the co-signer does not find out in a timely fashion. Ultimately, if the payment is not made, the co-signer is responsible. It sounds like your daughter is very responsible. But, you must be prepared to make the payments if something comes up. You should also have a way to verify the payments are being made (and are on time).

[disneysteve]

As far as co-signing. That is a tough one. Here is a problem which sometimes crops up. For whatever reason, the payment is made late (or not at all). This will reflect on your credit score. Sometimes, the co-signer does not find out in a timely fashion.

Very good point. If you do co-sign, make sure the bill comes to you directly. You can tell her when it arrives and she can pay it but you always know the status that way.

[ActYourWage]

Sounds like she needs to be rewarded for her diligence. Buy her a laptop for a college gift.