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boop21197 · Aug 31, 2007, 08:03 PM

I have a 17 year old son, who will be turning 18 this year, he wants to start a credit history, which means he wants to start building his credit, is there a credit card out there that he can get with NO annual fees, with a credit limit of 2 to 3 hundred dollars, until he proves himself. I have looked and can't seem to find one that he can get on his own with out a co-signer and I'm not going to co-sign, I can't co-sign. I've had to file bankrup cause of his sister.

Fr_Chuck · Aug 31, 2007, 08:23 PM

Most likely there will be some for a 18 year old that has a 50 dollar annual fee, and a credit line of 500 dollars,

And let me see you want a 18 year old to be able to charge up to 3000, I would say this is about as stupid an idea as I have ever seen.
Sorry they don't need credit cards,

sGt HarDKorE · Aug 31, 2007, 09:11 PM

She said 300 not 3000. And you shouldn't say he doesn't need it or w/e if you don't even no him. If I had a credit card, I wouldn't screw up with it. I would only use it if I had money on my credit card.

CaptainForest · Aug 31, 2007, 10:42 PM

A lot of CC companies off student credit cards, also "youth"/young adults ones too.

Then again I live in Canada, but when I turned 18, I got a credit card, no annual fees, with a 500 dollar credit limit.

Call the credit card companies and ask them if they have a student/youth account.

Upon further looking into this, I have found the following:

Regarding the VISA credit card: Different option types can be found here:

The first one on the list, Citi® Platinum Select® Visa® Card, has NO Annual fees

In fact, the first 5 all appear to have no annual fees.

However, if your son is not longer a student…

Go to page 2, third one down, the U.S. Bank Young Adult Visa. It says there is no annual fee as long as at least one purchases is made with the card each year.

Check into that list, I am sure you can find tons of others as well.

Remember the rule you must teach him. He should not use his credit card for ANYTHING unless he has the cash in the bank to pay it off today.

ScottGem · Sep 1, 2007, 07:11 AM

Will he be going to college? Lots of credit cards offered to college students that meet your criteria.

KCDave · Sep 5, 2007, 05:51 AM

Originally Posted by CaptainForest

Remember the rule you must teach him. He should not use his credit card for ANYTHING unless he has the cash in the bank to pay it off today.

And if they have the cash in the bank, why not just use, ummm cash? Why everyone feels they have to have a credit card is amazing. Why not try something out of the ordinary and pay cash for everything? Teach your kids how to save and they won't need to worry about a credit score.

ScottGem · Sep 5, 2007, 06:47 AM

Originally Posted by KCDave

And if they have the cash in the bank, why not just use, ummm cash? Why everyone feels they have to have a credit card is amazing. Why not try something out of the ordinary and pay cash for everything? Teach your kids how to save and they won't need to worry about a credit score.

Because its impractical to pay cash for "everything". If someone has to wait until they have saved enough money for a car or a home or any one of several other big ticket items, they may never be able to get them. So credit has to be used for some things, which means establishing a good credit history can save money by lowering interest rates.

KCDave · Sep 5, 2007, 07:24 AM

Originally Posted by ScottGem

Because its impractical to pay cash for "everything". If someone has to wait until they have saved enough money for a car or a home or any one of several other big ticket items, they may never be able to get them. So credit has to be used for some things, which means establishing a good credit history can save money by lowering interest rates.

It's only impractical when you live beyond your means, like most of America does. A home is a little different, but like I said a person should be able to put a huge chunck down, get on a 15 year fixed rate mortgage and they will have no debt when they are in their forties, provided life doesn't throw them a curve ball.

Instead of getting my 17 year old a credit card I'll be teaching him to put $500 in the bank so when his car breaks down he has the money to fix it. I'll be showing him how to make a budget and how if he starts saving $300 a month at age 25 he will be a millionaire at age 65.

ScottGem · Sep 5, 2007, 07:45 AM

Ok so you acknowledge that a home is a "little different". But that leads you down a slippery slope. Using your example, lets say a person paid off a 15 yr mortgage at 45. This means they got their mortgage at age 30. Now lets say they put down a "big chunk". The average home price in Oct 2004 was $264K. So lets say a big chunk was 30%. That means the person would have had to save more that $75K. Now assuming this person graduated college at 22, that means they had 8 years to save this money. Assuming compunding that would mean they would have had to save about $8K a year. Now in 2002 the average salary in the US was $36K. But even assuming a college grad would have higher earnings, we are still talking that they would have to save more that 20% of their take home pay. By the way that 15 yr mortgage would cost our hypotehtical person $1500 month (not including taxes and insurance. Which means they would need a take home salary of over $72 a year to be able to afford it.

And that doesn't take into account other living expenses.

Sorry Dave, but your idealistic look at finances is totally impractical. If you do the math it just doesn't work. Indeed our youth needs to be taught more fiscal responsibility. Credit cards should only be when the money for the purchase is in the bank.

But building a credit history is important. Most people will need to purchase certain things on credit. With a high credit score, you lower your interest rate. So having a good credit history is actually a cost saving and an investment in your future.

Oh and that million your son will have at 65, what will he be going without to make that?

KCDave · Sep 5, 2007, 08:53 AM

Originally Posted by ScottGem

Oh and that million your son will have at 65, what will he be going without to make that?

Probably the waverunner, fourwheeler, motorcycle, second car payment, boat or numerous other things people buy each year that they can't afford or put before saving.

I think your figures are right on and this is what most of America is doing. Buying way too much with the income they have. There is no way a person making $36,000 a year should be buying a $264,000 home. That's a home that's 7x their annual income! Most mortgage lenders say it should be 2 1/2x and I think that's high.

I never said it's easy, but this is what we should be teaching our kids. All we teach them now is how easy it is to buy on credit.

I may be talking on the extreme side, but that's what our goals should be. Maybe at first its as simple as saving that $8,000 the first year and paying cash for a decent used car instead of getting that $40,000 Tahoe.

The only thing you would ever need a credit score for is to buy a home and I'm willing to bet if you buy within your means and have a downpayment in the bank and no debt you'll get the loan.

It may seem idealistic or impractical but it's not, I know plenty of average working 40 year old people who are debt free.

Some people can handle credit just fine, most can't, just read the posts on this board.
"collection agency-law firm placed lien on property"
"credit card debt settlement?"
"Too young for bad credit! what to do"
"credit card company using questionable tactics:"
"1999 credit card debt , sued 2007 cali, satute?"

Now go to the retirement board and read about all the people that want to cash in their
401K.

ScottGem · Sep 5, 2007, 09:28 AM

I think you are missing the point here, Dave. As I've said, I agree with you that teaching fiscal responsibility is very important. I agree that many people can and should be debt free with the possible exception of a mortgage. Its obvious from the posts here that many people do mismanage the use of debt.

But, I also think its impractical to ignore credit as a tool. Many people live in areas where a car is a neccessity. And yes, they shouldn't be buying the $40K Tahoe, when a $10K Rio does the job for them. But even saving $10K may take a long time for a lot of people. Having that car may mean a difference in being able to get to work on time or in a reasonable amount of time.

Its also not a matter of just getting a loan or mortgage, its also a matter of getting a favorable rate. A half percent of interest can save significant amounts over the course of a loan.

Our only disagreement seems to be that you feel that using credit should be avoided at almost all costs. While I believe that judicious and responsible use of credit is a necessity in today's world.

Megalomaniac · Sep 14, 2007, 05:31 AM

I think it is very important to teach your children about credit. There is nothing wrong with helping them get a credit card, but they also need to learn about credit and realize how important it will be when they get older. If you never teach them that, they will eventually do something to mess up their credit and then it will be harder for them to buy that house or car.

Plus, getting a credit card with a low limit now will help build their credit which will help when they want to buy a house. If you tell them that they should never use credit and always pay cash, when the time comes to buy a house, they will have no credit and that usually looks as bad as having bad credit.

Shell_Lee · Sep 14, 2007, 07:47 AM

ScottGem - I agree with you 100% on what you have been saying. It is very important in today's society to build good credit. It is also important to teach the youth how important it is not to abuse credit cards. To add another thing: many times you need a credit card for making hotel reservations or even booking flights. Some places don't accept debit cards. Yes you may be paying cash, but just to reserve it you need a credit card.

But back to the OP - you could try this if your son will be going to college:

Bank of America Student Visa® Platinum Plus® Card

Who it's for

Student Visa Platinum Plus may be for you if you are:

* A part-time or full-time student attending an accredited two-year or four-year college or university
* At least 18 years of age and a U.S. citizen or permanent resident of the U.S.

Value and pricing

* No annual fee
* No co-signer needed

Platinum benefits

* Online Banking service***
* Total Security Protection®, our free package of security features, including zero liability from unauthorized card use if you notify us promptly***
* Travel and emergency assistance***
* Automatic auto rental insurance***
* Purchase Replacement***
* Purchase Guard***
* Cash advance checks at no extra charge***
* Additional cards at no extra charge

AKaeTrue · Sep 14, 2007, 07:56 AM

Originally Posted by KCDave

And if they have the cash in the bank, why not just use, ummm cash? Why everyone feels they have to have a credit card is amazing. Why not try something out of the ordinary and pay cash for everything? Teach your kids how to save and they won't need to worry about a credit score.

Just paying cash all the time would defeat the purpose of "building credit".
Having a credit card, using it, then paying the bill when it comes in, shows that you can borrow money and pay it back, therefore building good credit.

GlindaofOz · Sep 14, 2007, 08:09 AM

Considering that nowadays you need a decent credit history to get pretty much anything. I have a friend who cannot join a gym because she has no credit history nor can she get a cell phone. She always thought it would be smarter to save her money and pay cash and have no debt. Now that she is nearing 30 she is realizing she made a huge mistake since not having credit has caused her problem after problem.

This young man should start learning how to use credit responsibly. Its an important thing to learn. If he has a small credit limit he can learn to use it smartly. My mom taught me to never spend more then I could afford when I was 18. I used my credit card but would pay it off. You have to be instill those things into kids they typically only learn the hard way how to be responsible.

ScottGem · Sep 14, 2007, 08:17 AM

Just an aside here. My dtr got her first credit card bill and she was incredulous that, on a balance of just over $100, the minimum payment was $10.

The money for the 2 items she charged are in her bank account and I think she plans on paying this off in 2 payments. But this points out how easily someone can get in toruble if they don't manage things wisely. Just paying the minimum would probably wind up costing more than 20% more.

KCDave · Sep 15, 2007, 06:54 PM

Originally Posted by ScottGem

Just an aside here. My dtr got her first credit card bill and she was incredulous that, on a balance of just over $100, the minimum payment was $10. The money for the 2 items she charged are in her bank account and I think she plans on paying this off in 2 payments. But this points out how easily someone can get in toruble if they don't manage things wisely. Just paying the minimum would probably wind up costing more than 20% more.

She will pay interest on the balance thats not paid, in this case it sounds like $50.

Originally Posted by boop21197

I have a 17 year old son, who will be turning 18 this year, he wants to start a credit history, which means he wants to start building his credit, is there a credit card out there that he can get with NO annual fees, with a credit limit of 2 to 3 hundred dollars, until he proves him self.? I have looked and can't seem to find one that he can get on his own with out a co-signer and I'm not going to co-sign, I can't co-sign. I've had to file bankrup cause of his sister.

Sounds like this plan worked well the first time around, even mom's paying for it now.

Originally Posted by Shell_Lee

To add in another thing: many times you need a credit card for making hotel reservations or even booking flights. Some places don't accept debit cards. Yes you may be paying cash, but just to reserve it you need a credit card.

Name one place that accepts a credit card but doesn't take a debit card. My debit card has this little "Visa" insignia on it. Which means anywhere Visa is accepted, so is my debit card.

According to "Young Money" magazine the average credit card debt owed by college students is about $2,700, with close to a quarter of students owing more than $3,000. About 10 percent owed more than $7,000! I would like to see the stats on teenagers who have credit cards.

ScottGem · Sep 15, 2007, 07:30 PM

Originally Posted by KCDave

According to "Young Money" magazine the average credit card debt owed by college students is about $2,700, with close to a quarter of students owing more than $3,000. About 10 percent owed more than $7,000! I would like to see the stats on teenagers who have credit cards.

So? We've all agreed that irresponsible use of credit can cause major problems. That doesn't change the fact that responsible use of credit can be a necessary evil in today's world.