Charlie and the Credit Factory - Student Debit Cards

Student Debit Cards

When your child heads off to college, chances are he won't be working a part time job unless he has transportation to get to and from work. And that's assuming that a full-time class load leaves time for studying and working. So before your student heads off to college, you should figure out what they'll do for money.

There are Options

Obviously, in a best-case scenario, you'll have a financially mature child. Maybe he worked all summer and saved his money for college expenses. That's a rare situation, and your child still needs things like shampoo, conditioner, deodorant and other such toiletry items, not to mention a little extra for pizza! As a parent, your obligation doesn't stop at tuition and books. However, you can set limits. Perhaps you can hit Costco and stock your kid up on enough toiletries for two semesters before he heads out. Then you can put a limit on spending cash. Let's say $200 a month (which is pretty generous). Giving them this much cash isn't wise. What if they have a roommate with sticky fingers? What if they lose it? Or what if they spend the cash too fast? Then you should consider one of the many student debit cards out there.

Student debit cards are prepaid debit cards. That means you pay $200 (or however much you decide on) to the company issuing the debit card, and as your child needs the money, he withdraws it. Student debit cards can be used at stores for purchases or at ATMs to withdraw cash (standard ATM fees usually do apply, however).

Let's go back to our best-case scenario above. If your child is at least 18 years old and he's been working, he probably already has a bank account, and it probably came with a debit card. But if he closes the account while he's at school, he can take the money he saved and get a student debit card. There's no credit check, and since student debit cards can be reloaded through the phone, if he runs out of money, you can help him out by adding funds to it.

The main benefit of student debit cards is that they help students control spending without incurring debt. That's the problem with student credit cards. Many times students can get credit cards in college with small limits, but they usually aren't wise in using them. They might get a card with a $200 limit, charge it up and pay the $20 monthly minimum. The credit card companies like this and eventually will raise the limit. The vicious circle continues and when your child graduates, they have a degree in their chosen field as well as a degree in spending! Don't get us wrong--used responsibly, a student credit card can help a child build a credit history, which will be essential when he takes his first step out into the real world.

That's another way student debit cards help students control spending. If they run out of money, a transaction cannot be completed, so there's no over-the-limit fee. There are, however, fees to set up student debit cards and reload them (unless it's through a checking account at a bank or credit union).

Hopefully you'll consider this information about student debit cards when deciding how your child will get money during college. A student debit card is what you need. Get some prepaid debit cards with the quickest speed!