How Students Can Apply for Their Own Credit Card
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Here's your Money Briefing for Tuesday, August 6th. I'm J.R. Whelan for The Wall Street Journal. Tighter banking laws have made it a lot harder for students to get their own credit card. But there are still ways for young people without credit history or established spending power to be approved for plastic.
You can have a camp job. Even babysitting money, if you have enough of it, can help. You may have to give bank statements and the credit card companies may ask you for a note from your employer in some cases. The important thing is to have the income on your own that you've earned previously.
Wall Street Journal contributor Cheryl Winokur Monk has been researching the types of credit cards geared to students and the rules around them. We'll talk with her about it after the break.
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It's becoming harder for students to get a credit card. Wall Street Journal contributor Cheryl Winokur-Monk joins me. Cheryl, how does establishing good credit as a student help them in the years to come?
Having good credit can help you with so many things. Buying a house, getting better rates when you buy a car, taking out other types of loans, and more. It's really an important underpinning of a healthy financial life.
But you're right that it's getting harder for students to get credit cards. For one thing, why don't we see banks setting up tables on college campuses anymore and offering credit card promotions to students? That went on for years.
How have regulations changed the process for students under 21 to get a credit card?
Well, it's actually a simple answer. They're not allowed to. A 2009 federal law clamped down on banks' ability to hand out that free gear that so many of us remember from our college days. I remember practically being chased with free stuff just to entice me to apply, you know, hats, Frisbees, T-shirts. But they just can't do that anymore.
So how are credit card companies connecting with students?
Honestly, a lot of it is just the students reaching out, realizing it's time to get a credit card. Because I had kids in this age range, I'm on a lot of parent forums, and so many times parents are asking, time to get a credit card for my student, time to get a credit card, how do I do it, how do I do it? And that's actually one of the reasons I wrote this story, just because so many of my friends were asking.
Last month, we discussed students building a credit profile by being an authorized user on their parents' account. But if a student wants to get a credit card on their own before they turn 21, what kind of information would they typically have to supply?
you're gonna have to show you have earned income of your own, and that could be income earned on a W-2 or a 1099. Students shouldn't get so hung up on the kinds of jobs, and you can have a camp job. Even babysitting money, if you have enough of it, can help. You may have to give bank statements, and the credit card companies may ask you for a note from your employer in some cases. The important thing is to have the income on your own that you've earned from a full-time job, part-time job, or like I said, even babysitting or odd jobs around the neighborhood.
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