Grandkids and Credit Cards
With graduation time upon us, you can be sure that many newly-minted college grads will be receiving lots of unsolicited applications for credit cards (unscrupulous lenders have been known to send actual cards, which is illegal).
Setting up a new apartment certainly will be a lot easier with a credit card, but far too many young adults are not sufficiently educated with respect to what the underlying responsibilities and exposures are when using these cards.
Our Suddenly Solo financial expert, Lynn Najman (www.lrnassociates.com), recently covered the potential pitfalls of young adult credit card use as part of her monthly newsletter.
Among the cautions she notes for new, potential cardholders:
- Compare finance and late charges on different cards
- Learn about underlying advantages (flight miles, meal discounts)
- Yearly membership charges vary greatly (some are free)
- Figure out your spending patterns and get a card that maximizes rewards for your most common usage
It is definitely not inappropriate for you as a parent or grandparent to explain the basics to the new graduate and by all means direct them to Lynn’s “Beginner’s Guide to Credit Cards” section on her newsletter.