Load up the kids and grandkids! Cash in those SkyMiles! Delta’s recent elimination of the mileage expiration date makes a family dream vacation, well, a reality.

Looking to come out on top of the stiff competition between major airlines, Delta’s focus on member benefits is a winner. With the announcement of the elimination of the 24 month SkyMiles expiration date they previously had, Delta becomes the first US major airline carrier to allow reward miles to be redeemed whenever the customer wants.

The freedom to earn and use SkyMiles without worry about deadlines is of great benefit to infrequent flyers who previously watched those miles disappear before they had earned enough for a trip to one of Delta Airlines’ over 350 destinations worldwide. Now it’s possible to save those miles for a future trip, whenever it might be.

Not a member of the Delta SkyMiles Awards Program? The Platinum Delta SkyMiles Credit Card from American Express is a fantastic rewards card. For starters, new card holders earn 20,000 bonus miles with their first purchase. If you add two more card members to your account, that’s another 5,000 bonus miles. That’s already more than enough miles for a trip to Hawaii or Mexico!

In addition, the Delta and American Express team often provides members limited-time bonus offers such as the current 50% mileage bonus when you buy or gift mileage. It’s a great way of helping members who want to get away but are a few miles short. And the timing is perfect to be able to fly your college son home for spring break or to give your granddaughter the chance to get away with girlfriends before finishing the semester.

The fact that SkyMiles earned as part of Delta’s Awards Program are redeemable for more than just plane tickets makes Delta’s Awards Program even more flexible and customer friendly. Purchase your plane tickets, reserve your rental car, and book your hotel all with your SkyMiles!

With Delta and the American Express Delta Platinum SkyMiles credit card from , you really can plan that special family trip for your anniversary or for your son’s college graduation, even if he hasn’t graduated from high school yet!

Exciting new credit card offers are designed with you in mind and are just in time for spring!

Discover Student CardBuilder

In college, have excellent credit, and looking for a credit card that is a perfect fit for your lifestyle? Check out the new Discover Student CardBuilder! Not only are there no annual fees, you can also choose both the rewards you want to receive and the terms of service.

Service terms qualifiers can choose include:

• Introductory Purchase APR
• Duration (in months) of Introductory Purchase APR
• Introductory Balance Transfer APR
• Purchase APR (the rate applicable at the end of the introductory period)
• Bonus Rewards Rate

Discover credit cards are said to have the best cash back rewards in the industry. With the CardBuilder student credit card, Discover offers cash back on purchases ranging from 1% clear up to 20%.

Discover Student CardBuilder credit card is perfect for today’s college student!

Discover More Student Card – 15.99%

Nearly everyone will agree that college is a great time of life. It’s exciting to be away from home for the first time, to establish independence, and to begin discovering your own place in the world.

Discover also knows it’s the best time to begin building a credit history and planning for your financial future.

Another fantastic offer Discover has made with students in mind is the Discover More Student Card. This credit card is designed especially for young adults who are seeking to establish a credit history and to build a strong credit rating.

The Discover More Student Card is the perfect fit for young adults because of the following:

• A credit rating of “Fair” to qualify
• No annual fee
• 15.99% Variable APR
• Cash back rewards on all purchases

Check out the Discover More Student Card and get yours just in time for Spring Break!

Limited Time Offer from Citibank

Planning to take advantage of spring weather for home improvements, remodels, or lawn and garden projects? Then Citi® has an unbelievable offer you will want to check out!

The Citi® Dividend Platinum Select® MasterCard® boasts a zero percent APR on both Balance Transfers and Purchases for 15 months. That, in itself, is hard to beat anywhere.

However, Citi has outdone itself by making this credit card even more consumer friendly. The list of benefits of the Citi Dividend Platinum Select MasterCard includes:

• No Annual Fee
• $100 cash back after $500 in purchases within the first three months
• 1% cash back on all purchases
• Bonus cash back in categories that rotate every quarter (Beginning April 1, this includes purchases on home improvement, home furnishings, and in home and garden stores.)

The Dividend Platinum Select Card will make that spring spruce up a little easier to accomplish. But it is a limited time offer so act soon!

Some things in life you can count on. Christmas is always on Dec. 25. Grandma always loves to see the grandkids (and sometimes doesn’t mind seeing them go). Girl Scout Cookies have been part of the American way of life for as long as anybody can remember, and with a recent decision, the organization is ensuring they always will be.

When the cute little 1st grader from around the corner knocks on your door this year and asks you to help support her Girl Scout Troop, help her earn a cookie badge, and help her to win the sales contest, the “I don’t have any cash” excuse won’t protect you from those Thin Mints that are calling your name (as if you could say “No” to those big brown eyes and dimples anyway)!

Picture it this way.

“That’s okay, Mrs. Smith. You can use your credit card. We take VISA®, Mastercard®, Discover®, or American Express®,” rattles off little Suzy in the cutest of 1st grade business-woman voices.

Who would have imagined that Girl Scouts sporting iPhones® armed with Intuit®’s GoPayment system and a credit card reader could so easily sabotage your plans to avoid too many boxes of those delectable Samoas finding their way into your house?

“By using cutting-edge technology to help us sell cookies, we are learning the role technology plays in successful business. It’s a good lesson for us to remember when we grow up. Have you tried the Dulce de Leche? If you like carmel, they’re delish.”

No sense in shaking your head to clear your mind; you heard correctly. Trefoils® can be charged to your favorite rewards credit card using Suzy’s iPhone to conduct the digital payment. The transaction is as secure using the GoPayment application as the use of your credit card is at any merchant point of purchase machine.

“Do you need to check your birthday list to see if there’s anyone else you’d like to buy some cookies for? I can wait while you do. Oh, and if you owe someone a ‘Thank You’ note, a really fun thing to do is to send it with some ‘Thanks a Lot™’ cookies because EVERYONE loves Girl Scout Cookies. I bet Mr. Smith would really like to have some Samoas to take to his office, too.”

Boy, this girl is good, and whoever wrote her script also needs some kind of cookie badge. Surely calories don’t count when it’s for a good cause.

Transaction completed! As you turn to go into the house you notice Suzy and her ‘Tagalong® little sister doing ‘Do-si-dos’ down the street as they celebrate what may be the biggest Girl Scout Cookie order in history.

Oh well, just remember all the reward points you racked up on your credit card while you were doing your part to support an American institution!

(By the way, if Suzy hasn’t knocked on your door, you can use your iPhone or Android to find Girl Scout Cookies by downloading the “Cookie Locator” application! Happy eating!)

In 2009, the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) was signed into law and on February 22, 2010, the law went into effect. The initial reaction by consumers was positive. For years, credit card users were hit with retroactive interest rate increases that boosted their minimum payments but didn’t reduce their balances. The CARD Act would eliminate this practice, along with many others, and consumers rejoiced. Unfortunately, the last year has shown consumers that there is a darker side to this popular consumer protection act.

Photo: LotusHead

Bad – Higher Interest Rates

Would you sign up for a credit card with a 79.9% APR? While one might think the answer to this question would always be a resounding no, First Premier Bank had customers willing to pay this exorbitant interest rate for the luxury of rebuilding their credit. According to an article that appeared on CNNMoney.com, consumers knowingly signed up for a credit card with a 79.9% APR. These were typically consumers with poor credit that needed a positive and actively reporting line to boost their scores.

First Premier Bank ultimately decided that the 79.9% mark was too high as many customers went straight to charge off so they decided that 59.9% was the sweet spot – that the card is marketable and has a measure of success with this interest rate.

First Premier Bank has done this because of the CARD Act. Prior to its passing, they could charge higher risk individuals more fees to cover their bottom line. Now, all customers must be held responsible for the risk and so fees and extravagant interest rates are shared by all.

Bad – Higher Fees

Speaking of fees – they’re back! For years the majority of credit card holders did not have to pay an annual fee. Banks made their money from a variety of fees including late payment fees and over the limit fees. Additionally, the retroactive interest rate hikes helped keep many credit card issuers in the black. With new guidelines being placed on all of these types of fees, annual fees are back. If you have an open credit card account that you don’t actively use, make sure to check your balance monthly. You don’t want that surprise $39 fee membership fee to go without notice and accrue late fees and additional interest.

Good – No Credit Cards for College Students

Fresh out of high school and out on their own for the first time, college freshmen used to be bombarded with credit card offers the minute they stepped foot on campus. To help entice these students, banks would often give away free swag – want a free t-shirt? Just sign up for a new credit card. It’s easy, sign here! Then a few weeks later a credit card with $500 of available credit shows up in the mail. For many college students this was “free” money. Unfortunately, this turned out to be quite a large problem for students that fell prey to the sales pitches.

The CARD Act prohibits credit cards from being issued to college students unless co-signed by a parent or if the college student has the ability to pay the bill, for example by having a job. However, there has been a bit of controversy brewing recently because some banks are considering student loans as income when determining if a college student has the ability to repay a credit card bill. Loans simply aren’t the same thing as income and so it looks like this may be one way that banks are trying to get around this stipulation.

Good – Easier to Understand Statements

One of the most obvious positive effects of the CARD Act shows up in your monthly statement. Now consumers will see a box on their statement that shows them how long it will take to pay off their credit card if they only make the minimum payment. This is usually upwards of 20 years for a medium-sized credit card balance. Banks also show you a second option, which includes a slightly increased monthly payment. If you make this new payment each and every month your balance will paid off in about three years. This is a huge difference and allows customers to instantly see the benefits of paying more than the minimum without trying to create their own amortization schedule.

As more time has passed since the CARD Act became an active law, there have been many unexpected negative side effects of the legislation. While the main purpose of the act was to increase consumer protection, consumers need to take personal responsibility and understand how credit card accounts really work. The CARD Act does offer new protections but in the end, consumers should be accountable for their own financial security.

At the Mobile World Conference (MWC) held in Barcelona, Spain, February 14-17, 2001, MasterCard®, in collaboration with Wireless Dynamics, announced the introduction of secure, contactless payments using an iCarte™ attachment with the iPhone®.

Boasting thousands of attendees hailing from over 200 countries plus nearly 1400 displays featuring the latest technology for mobile devices, and in many cases, the unveiling of new products, MasterCard and Wireless Dynamics, headquartered in Calgary, Alberta, Canada, had the attention of the world as they revealed the pilot program will be launched in Singapore.

MasterCard’s PayPass™ technology will be programmed into the iCarte, an iPhone accessory that has Near Field Communication (NFC) abilities. NFC allows short range, two-way communication between personal electronic devices thereby enabling the exchange of information. The technology developed by the MasterCard and Wireless Dynamics will not only have the ability to authorize mobile payments, but will also allow electronic receipts, coupons, or even tickets to be either downloaded or uploaded.

The iCarte accessory is available for iPhone 3G, iPhone 3GS, or iPhone 4, which was awarded “Best Mobile Device” at the 2001 MWC. The iCarte accessory either connects to the bottom of the iPhone or snaps conveniently to the back of the iPhone. The iCarte’s embedded smart element configured as a MasterCard will essentially turn your iPhone into a secure electronic wallet able to complete transactions on any contactless-enabled point of sale terminal.

MasterCard and iCarte, making life easier and more secure.

Southwest’ Airline’s answer to the increasingly stiff competition among airline carriers is to give the consumer more flexibility and more control with the completely New Rapid Rewards program. The savvy consumer will want to pay attention and take advantage of the exceptional incentives offered by Southwest Airlines Rapid Rewards® Plus Credit Card from Chase.

Beginning on March 1, 2011, customers will earn points instead of credits with their Southwest Airlines Rapid Rewards® Plus Credit Card from Chase, and earning points has been made easy. Not only that, but the ability to redeem those points has been expanded to better serve Southwest’s clients.

Here are a few highlights of the new program:

• Points are earned for every dollar spent, including dollars spent with Southwest’s partner companies such as select hotels, car rental companies or restaurants.
• Points don’t expire as long as the customer flies or has Partner activity every two years.
• Points can be redeemed for any seat, any day, on any flight.
• Southwest’s Rapid Rewards program does NOT have any blackout dates. None. Ever.
• Points can be redeemed for international flights.
• Points can be redeemed for a variety of other products including cruises, car rentals, over 70,000 hotels or resorts world-wide, and gift cards at over 45 major retailers.
• Points can now be purchased in blocks of 1,000 with a minimum of 2,000.

If you already have a Southwest Rapid Rewards membership, you will automatically be enrolled in the New Rapid Rewards program. You’ll keep your same credit card, account number, on-line login, existing awards, and existing credits. The expiration dates on your existing awards and credits will still be in effect. Southwest has provided an easy conversion program so you can use your existing credits combined with the new, easy to earn points to obtain free flights to a Southwest destination of your choice.

In the New Rapid Rewards program, current Rapid Rewards members who have an A-list or Companion Pass status will continue their status and benefits, with a few extra perks, such as earning 25% more points each flight and priority status when flying standby. In addition, Southwest has added “A-List Preferred” status, which features all the rewards of A-list status plus several extra including priority check-in and security lane access, priority boarding, and 100% earning bonus on each flight.

One of the most customer-friendly and flexible rewards programs out there, Southwest’s Airlines Rapid Rewards® Plus Credit Card from Chase is easy to apply for. If you aren’t already a member of Southwest’s Rapid Rewards program, you’ll want to hurry up and get on board. This flight takes off on March 1, 2011, and it’s packed with limitless rewarding possibilities!

The mountain of ripped wrapping paper has been cleaned up, the presents (charged on my rewards credit card, of course) are all put neatly where they belong, and the Christmas decorations are ready to store for another year. My mind has turned toward looking back over the past year and looking ahead to 2011.

I don’t really like to think in terms of making New Year’s Resolutions because so often those who make them, break them within a short while. I do, however, feel good about evaluating where I am and setting some goals as to where I want to be in the next year. If you’re like me, one of the goals you set is to be in better financial shape at the end of your selected time period be it 1 year, 5 years, or 10 years.

It’s not coincidental that at the time of the year when most of us naturally do some assessing of our lives, credit card companies are making some amazing offers. If you are wanting to get your financial house in order – or at least tidied up a bit, check out the balance transfers offers available. Among others, Capital One Platinum Prestige, Citi Platinum Select MasterCard, Chase Freedom Visa, and Discover More cards have some great introductory terms.

Why think about balance transfers? If holiday shopping or the recent economic events have left you with a large balance on a loan or credit card charging a high interest rate, a balance transfer to a zero percent card could save you a huge amount of interest. What you would be paying in interest could be applied to the principal of your balance and help you pay it down that much faster.

If you’re tired of keeping track of payments and due dates for several credit cards, transferring those balances to one card is a great strategy. This kind of consolidation simplifies bill paying and helps to prevent accidentally missing a payment or making a late payment because of too much paperwork.

When it comes to a large purchase or trying to address credit card balances that have, over time, crept higher than I’d intended, one approach I’ve used in the past is to search out a zero percent interest card to transfer all my balances to. That card is a kind of holding card for me. It holds all my debt that I am focusing on paying down. Once I transfer the balances to the card, I do not use it to make additional purchases. I figure out how much I need to pay for each month of the introductory zero percent rate in order to pay off the balance by the end of the time period. It’s a great system that has allowed our family to eliminate debt or to make some large purchases without paying interest. Meanwhile, I use another credit card to charge things like gasoline or on-line purchases. I make sure the credit card I use for purchases gets paid off every month. (And I use the card that earns the most reward points – be they frequent flyer miles or cashback bonuses!)

As long as you have a good credit rating, zero percent balance transfer offers shouldn’t be hard to find right now. The Capital One Platinum Prestige card is offering 0% APR up to 12 months. Citi Platinum Select is offering zero percent for 24 months on balance transfers with zero percent for 12 months on purchases. Discover More and Chase Freedom Visa both have 12 months at zero percent on balance transfers with 6 months zero percent on purchases. These are just a few examples.

If you are setting some financial goals for the upcoming year, it is definitely worth your while to research credit card offers available for balance transfers. Take time to compare at least two or three credit cards to ensure you are getting the best deal for your circumstances. Look not only at the length of the introductory offers, but also check on the balance transfer fees and on the regular APR the card reverts to once the introductory offer expires. Know what your credit rating is as that will determine the credit cards for which you will qualify.

The media is reporting that we are coming out of the economic recession we’ve been in and that things are looking brighter for 2011. So here’s wishing all of us a financially prosperous New Year and success in setting and meeting our financial goals.

As a young child, I spent a lot of time with my grandparents. Some of my fondest memories are of my grandmother telling me stories. One of the ever-present favorites was the fable “The Tortoise and the Hare.” How often I heard the axiom, “Slow and steady wins the race.”

As an adult, I’m amazed at how many times that axiom has popped into my mind and been a sort of guide in my decision-making, including decisions about credit cards.

The glut of credit card options can be overwhelming for anyone to wade through in a quest to make a wise decision about which card to apply for. Many reward offers are attractive. Equally appealing are the tempting zero-percent cards. However, for anyone with a fair amount of debt to pay down, a low interest card is a wise choice.

Let’s face it. Life has a way of landing us in unexpected circumstances. Whether a temporary job loss or a medical emergency or the break down of a large appliance or a vehicle, any one of us could find himself in a unexpected circumstance where a major amount of debt is incurred. Once we get back on our feet by finding another job or recovering our health, how do we address the new debt we suddenly find ourselves saddled with?

Why not a zero-percent card? A zero-percent card is a great option if you know you can pay off the balance by the end of the introductory zero-percent offer. Read the fine print before you select a zero percent card and be sure you understand what your interest rate will become at the end of the introductory period. Some zero percent offers have a steep interest rate after the initial offer. For instance, I needed to replace car tires the other day. I could save $90 if I opened a credit card account at the tire dealership. The card’s zero interest jumps up to a whopping 26.99% after the initial six months is over. An interest rate like that could add a lot to a debt load if one cannot pay off the card balance at the end of the initial zero-percent offer.

I believe my grandmother’s axiom comes into play. Wisdom would dictate looking for a low interest rate credit card that would allow me to intentionally pay down my debt at a steady pace each month without a punishing amount of interest charged on the balance.

In taking this steady approach to debt reduction, look for a card with a low interest rate. At the same time, check to see that the card has no annual fees. On top of no annual fee and a low interest rate on both new purchases and existing balance, if you can find a card that offers a lower initial interest rate for balance transfers, I’d consider applying for that card.

A low interest credit card I’d personally highly recommend is IberiaBank Visa® Classic Card. This particular card offers relatively low interest rates, a great six month introductory 1.99% rate on all balance transfers, and no annual fees. IberiaBank Visa® Classic Card just received top ratings in the Consumer Reports Top Low-Interest / Fees Cards of 2010.

If life has handed you unexpected debt or you’ve just decided to make an effort to become debt free, this low interest rate card would be a great one to transfer balances to. With normally low rates, a great introductory offer, and no annual fees, it definitely allows the consumer some breathing room while he makes progress in paying off debt in steady, monthly increments.

Years ago I had a friend who, before I met him, had unexpectedly found himself out of work. He and his family lived in a small town, and he had difficulty finding employment in his career field. While he was out of work for 18 months, his wife was only able to find part-time employment. The end result was foreclosure on their home. He was eventually able to find a position in another state, and he, his wife, and their four children began the adventure of relocating to the town in which I lived. It was interesting to be a friend-observer as they dealt with the limits foreclosure put upon them financially. The first couple of years after foreclosure were difficult for the family, but thankfully, they had made wise decisions and had good financial practices prior to losing their home so the recovery was not as hard as it could have been. I learned quite a deal through watching and listening to my friend and his spouse.

As anyone knows, going through a foreclosure will cause your credit score to plunge drastically, and the foreclosure will remain on your credit report for seven years. With a low credit score, you will be regarded as a high credit risk, and therefore, if you are seeking to open new credit accounts, the interest rates will be quite high. This will especially be true immediately following the foreclosure. However, if you can practice good credit habits consistently, you can begin to rebuild your credit score and, with time, ease the impact of the foreclosure.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 aimed to give consumers some protection against unfair practices by credit card issuing companies. This means that your interest rates on already existing credit card debt should not increase because of your foreclosure. You may, however, experience higher rates on new debt. If so, there are steps you can take to lower those rates, but it may take time.

Interest rates are primarily based on your credit score and how great a risk you are perceived to be. After foreclosure, you will want to work hard on rebuilding your overall credit score but also work with individual card companies to maintain or establish good standing with them.

First, if your rates on new debt have have increased after foreclosure and you have had a history of on-time payments, especially if you typically pay more than the minimum payment, contact your credit card company and discuss the rate increase with them. Ask them to look at your payment history and, based on your good-standing with them, continue to keep your interest rate at the lower level. If the initial person with whom you speak does not give you a satisfactory answer, don’t be afraid to ask to speak with someone with more authority.

If you haven’t had a history of on-time payments, start today to establish one. Also, make a great effort to pay more than the minimum due each month. After six months of on-time payments, call the card company to negotiate your rate. Continue to build your good payment history and continue to make those calls to negotiate your rate every couple of months until you get the answer/rate you want. Not only will a good payment history and a history of making more than the minimum payment to your credit card company establish with that company that you know how to handle credit, it will help in rebuilding the score on your credit report.

Another practice to adhere to in this rebuilding time is to go without that which you cannot afford. If you are unable to pay off a new purchase by the end of the credit card cycle, do not charge it.

Work to make sure your credit card balance is well below your credit limit. Ideally, work to pay down your debt load to 30% or lower of your credit limit. If you have more than one card with an outstanding balance, do it for each card. You may have to focus on one card at a time. While you do, be sure you are making all the other card payments on time. When you have lowered your outstanding balance, it is another good time to call the card company and discuss your interest rate. Because paying down your outstanding balance lowers your debt to income ratio, there will also be a positive movement on your credit score.

It might be easy in a tough situation like foreclosure to give into some kind of initial panic and close all your credit card accounts. Doing so would not be wise. Foreclosure will, for a time, make obtaining new credit both difficult and expensive – because of the high interest rates. You have a much better chance of working for reasonable solutions or compromises with a company with whom you’ve had a history. Also, most people don’t realize that closing established credit card accounts can sometimes cause your credit score to drop slightly.

The above practices are pretty basic. It might take a time to see the results of these practices, but they are fundamental approaches to using credit and to recovering from a large economic setback such as a foreclosure. If you can hang in there through the initial tough period and be committed to making on-time payments, making more than the minimum payment, charging only what you can pay off at the end of the month, paying down your credit card balance to 30% of your credit limit, and calling your credit card company frequently to dialogue with them about your interest rates, not only will you be able to come to an agreement on an acceptable rate of interest, you will also be rebuilding a more positive credit score.

The short answer to the question “How old do I have to be to get a credit card?” is 21. However, like most things in life, there are exceptions to that rule. Those exceptions have important ramifications for parents of teenagers.

On February 22, 2010 the CARD Act of 2009 went into effect. The Act was designed in response to the credit crisis that, coupled with the collapse of the housing market, helped push the nation into a recession. Proponents of the CARD Act gained popular support for the Act by emphasizing that the Act was designed to protect consumers. The CARD Act seeks to limit powers and practices of credit issuing companies.

One consumer group specifically targeted by the CARD Act for more protection is that of young people. Restrictions placed on credit card issuers include raising the age from 18 (in most places) to 21 to qualify for credit cards and limiting the access credit card companies have to college campuses in order to recruit students to apply for cards. The arguments for these limitations had a lot to do with protecting unwitting students from ruining their credit before they even had a chance to graduate.

When it comes to discussing the use of credit cards, I’ll be the first to acknowledge that there is a wide spectrum of beliefs and feelings about the topic. One can hear everything from “I have never had a credit card and never will” to “I buy everything with my card and rack up as many reward points as possible.” Like a debate on politics or religion, a discussion about the ethics or morals involved in using credit cards can quickly turn heated.

This is the way I see it. Credit cards are here to stay. Because credit cards are such an integral part of both our economic system and our culture, we need to be educated in our use of them, and we, as parents, have a responsibility to educate our youth about credit cards. I can understand the reasoning behind the limitations placed on credit issuing companies in relation to extending credit to youth, but I don’t believe those limitations are the real solution to helping young people avoid problems with using credit.

Here’s another place we can apply the ancient proverb, “Give a man a fish, and he’ll eat for a day. Teach a man to fish, and he’ll eat for a lifetime.” The real solution to helping youth avoid credit-related problems is to educate them about credit and about how to use credit cards responsibility. I believe the time for credit-related education is during high school and prior to the young person moving away from home. For this reason, I believe in taking a responsible approach to the age-related exceptions offered by the CARD Act of 2009.

One exception is that a young person under the age of 21 can obtain his or her own credit card if a parent or guardian co-signs the card application agreeing to accept financial responsibility in case the young person fails to make payments, etc. With supervision and training from involved parents, a young person who knows how to use his or her own checking account and reconcile the monthly bank statements is ready to learn responsible use of a credit card.

Co-signing for a young person to receive his or her own credit card is different than adding them as an authorized user on your account. As an authorized user, the young person would receive a credit card with his or her name on it, but any charges would be recorded on the one bill/statement that goes to you. Simply adding him or her as an authorized user affords fewer learning opportunities for the youth and more risk for you. The risks include not having a spending limit imposed by the credit issuing company that is any less than your personal limit and making you vulnerable if your son or daughter misplaces the card.

On the other hand, obtaining his or her own credit card gives the student not only learning opportunities in a supportive and somewhat controlled environment, but also helps him or her to begin establishing credit in preparation for after college graduation when a good credit rating will make things, such as getting a car loan or perhaps obtaining housing, easier or more affordable.

The wise parent will help the young person obtain a low limit credit card with a limit of perhaps $200 or $300. This limits the liability the parent has while supporting the training of the youth. During the hands-on experiment with credit, the parent can teach the youth several important lessons about credit including the following:

• What a good credit rating is, how you establish it, and why it is important.
• The importance of on-time payments.
• The importance of carefully reviewing your monthly credit card statement.
• The principle of interest and how it works (ie: The danger of making only a minimum monthly payment).
• How to figure debt to income ratio and what percentage of credit card debt is manageable to carry.

As a youth demonstrates responsibility in handling his or her own credit card and an understanding of the lessons the parent has taught, it may be wise to raise the limit on the card or to obtain a credit card with a higher limit. Ideally, by the time the youth is ready to establish himself independent of his parents, the allure of easy credit will not be a temptation to which he will succumb.