Back in 2003, U.S. Bankruptcy Judge Dorothy Eisenberg asked me, as Chair of the Creditors Rights Law Committee of the Suffolk County Bar Association, to become involved in a pilot project called the Credit Abuse Resistance Education program (“CARE”). CARE was the brainchild of Chief Bankruptcy Judge John Ninfo of the Western District of New York.

The program was designed to provide information and advice to students and young adults with regard to the proper use of credit and educate them as to their financial responsibility. The problem was getting into the schools to deliver the message.

School Districts found it difficult to find the time or proper setting for the presentation. Commonly it was the Business Law class or a similar elective that would invite me to speak. The class was never more than twenty students, many of which had no interest in paying attention to the visiting lecturer who spoke like a parent. Some of the students, younger than eighteen, already had a credit card in default.

I have always believed that establishing good credit is essential to a young person’s future plans. So many things depend on your credit bureau or FICO score, including the ability to secure a rental apartment, obtaining preferred lower rates on a personal loan and, eventually, in the mortgage or automotive loan application process. Therefore, having a credit card in the student’s name alone would be preferable to having an “authorized user” card on the parent’s account. In that way it is the student that builds the good credit by wisely using the card and paying it off promptly upon receipt of the Statement of Account.

When high school seniors start to obtain pre-approved applications from credit grantor banks, some of them lose all good sense and see great opportunity to live above their means. When they lose perspective in the “wants vs. needs” decision, they put themselves in jeopardy of falling into a downward spiral of mounting debt. Failing to pay pursuant to the Terms and Conditions of the card agreement can have disastrous consequences to the account holder, including future high finance charges and additional assessments in the event the account is given to a collection agency and/or attorney to collect.

If a parent is a co-applicant on the account, under the law they are held equally as responsible as their children to pay the bill. Parents who make their child an authorized user are in an equal position. As a result, there are parents who will refuse to co-sign for their child on any credit card or make their child an authorized user on their credit card account for that very reason.

The decision as to whether to send a child off to college with a credit card should be carefully examined. A lot depends on the child. There are some parents who decide to send their child off to college with a debit card, not a credit card. The student can’t overspend what she/he doesn’t have and will never incur additional fees or collection costs when they try to. They get used to having plastic in their wallet and educate themselves to exercise self-control in purchases.

Most colleges have at least one ATM on campus. If the student needs more money for books, pizza or an emergency expense, all she/he has to do is ask. The parent can feed the student’s account from their local branch or make an online transfer. In this way, the parent can maintain control over the child’s activities until they believe the student is mature enough to handle the legal responsibilities of a credit card.

For more information, please contact:

Elliott M. Portman, Principal
Portman Law Group, P.C.
1393 Veterans Memorial Highway; Suite 212N
Hauppauge, NY 11788
(631) 629-5640
www.PLG-NY.com
e.portman@PLG-NY.com

Views: 7

Members

Latest Activity

David Gussin posted events
17 minutes ago
David Gussin posted blog posts
1 hour ago
The Franchise Academy-FranChoice and David Gussin are now friends
yesterday
The Franchise Academy-FranChoice posted a video

Tom Scarda, Franchise Consultant

This YouTube Channel helps people understand the franchise industry and aids them figure out if being a franchise owner is right for them or not. The videos ...
yesterday
The Franchise Academy-FranChoice updated their profile
yesterday
David Gussin shared their blog post on Facebook
Wednesday
David Gussin posted a blog post

6 Tips to Prepare You for Cyber Monday ... Power Up w/ John Hassler

Power Up With John Hassler - Blog - November 2017Don’t Get Duped by Hackers this Holiday Season 6 Tips to Prepare You for Cyber Monday With smartphones in just about everyone’s hands, consumers don’t always wait for Cyber Monday to begin shopping…See More
Wednesday
True Mechanical Corp shared their blog post on Facebook
Tuesday
True Mechanical Corp posted a blog post

We make Ductless Sexy and efficient.

When your Honey is just way too Hot;  don't disappoint. Would you rather have this on your wall or a box?…See More
Tuesday
True Mechanical Corp posted a blog post

The #1 way to stop colds and Flu before they start.

The #1 way to stop colds and flu before they start. As simple as this sounds, simply make sure your home environment has a relative humidity between 35-50% all winter long. Our immune system functions well with proper relative humidity, and doesn't …See More
Monday
Real Estate Assessment Group Inc updated their profile
Monday
Profile Icon2 members updated their profile photos
ThumbnailThumbnail
Monday

© 2017   Created by 516 Ads.   Powered by

Badges  |  Report an Issue  |  Terms of Service