Before sending your student off to college, one topic they should be well-versed in is credit. Every college student should understand what it is, how it’s used, why it’s important, and why it’s critical that they learn how to manage it properly.
Tips for talking with your student about credit
Talking with your student about money and credit can be daunting. They may not have a lot of interest in learning the details, and you may find it challenging to explain money and credit concepts to your high schooler in a way that keeps them engaged. The following are tips that can help you get started with these all-important conversations about credit.
- Keep it real. When talking with your student about credit, try working it into everyday life. Are you pulling up to the gas station together? Ask your student to fill up the gas tank and show them how you use your credit or debit card. Mention why you’re using the particular card you are. Do you try to put everything on one card to maximize reward points? Do you use a debit card to avoid debt? Share your approach to credit whenever you’re out together shopping or spending money in any way. It’s a great way to supplement any talks you’ve already had about money, or it can be a natural way to pique your student’s interest in credit and open the door for their questions.
- Open a bill together. Are you comfortable opening up to your high school student about your finances? If so, the next time your credit card bill arrives, take it out and share the details. If you manage your payments electronically, print out this month’s bill so it’s easier to share and talk over together. If you do manage your finances electronically, that’s another good topic to cover. Let them know the advantages of things like automatic bill payment and other online features you use.
- Let them test it out. Consider working together with your student to help them understand credit. If you loan your student money, be diligent about securing repayment — even if it seems silly at first, it’s a good idea to reinforce for your high schooler what a loan is, and allowing them to take on the responsibility of repayment. If you’re comfortable with it, let them review your bill when it comes in and help decide whether to pay it off all at once, or make the payments over a few months. Work together to see how much interest might accumulate. These exercises in credit are like training wheels that provide great lessons for managing credit as a college student.
For more information, check out our Credit Education page at wellsfargo.com/financial-education/credit-management
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