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: 8

Members

Latest Activity

True Mechanical Corp posted a blog post

The Future of HVAC has arrived and that means 50% less electric.

The Future of Heating and Cooling your Home means a reduced HVAC electric use of 50 to 60% The Future of HVAC just made a big leap forward. The newest technology and most cost effective HVAC options have been introduced in just the past 6 months.…See More
yesterday
David Gussin posted a blog post

516Ads.com - Nassau Luncheon, North Shore Breakfast, Panera Suffolk, Ramada Plaza, 718Ads @ TRIO, Recap/ Reviews, Happy Sunday Morning, Quick Hits, Quote...

516Ads.com - Nassau Luncheon, North Shore Breakfast, Panera Suffolk, Ramada Plaza, 718Ads @ TRIO,  Recap/ Reviews, Happy Sunday Morning, Quick Hits, Quote...Hello everyone!  LOTS of events, LOTS of info, LOTS of good things happening!!! Hope to see…See More
Sunday
David Gussin posted blog posts
Friday
David Gussin posted blog posts
Jan 10
David Gussin posted an event
Thumbnail

516Ads/ 631Ads - Nassau Business Luncheon @ Nautilus Diner! at Nautilus Diner

January 16, 2018 from 12pm to 2pm
516Ads.com & 631Ads.com Nassau Business Luncheon Tuesday January 16,  2018 12PM @ Nautilus Diner - 5523 Merrick Rd, Massapequa Park, NY 516Ads & 631Ads is proud to team up with event sponsors…See More
Jan 9
David Gussin posted a blog post

COMING UP NEXT: BUSY THURSDAY 12PM Suffolk Luncheon, 6PM North Shore Towers ...

516Ads.com & 631Ads.com Suffolk Business Luncheon Thursday January 11,  2018 12PM @ AlaTurca Mediterranean Restaurant & Catering 691 Route 109, West Babylon…See More
Jan 8
Steven Warshaw RealtyConnectUSA updated their profile
Jan 6
Steven Warshaw RealtyConnectUSA is attending David Gussin's event
Thumbnail

718Ads - Kicking Off 2018 - FREE Networking Night at North Shore Towers & Country Club

January 11, 2018 from 6pm to 7pm
718Ads - Kicking Off 2018 FREE Networking Night Thursday January 11, 2018, 6PM @ North Shore Towers & Country Club 27240 Grand Central Parkway, Floral Park, NY…See More
Jan 6
David Gussin posted blog posts
Jan 6
Lisa Albinowski Coldwell Banker posted an event

Calling All Boomers & Seniors: Housing Options & Issues at Middle Country Library

January 12, 2018 from 10am to 12pm
Lisa Albinowski, Seniors Real Estate Specialist  & Sharon Ritter of Care Patrol: Winter 2018Housing Options & Issues will focus on alternatives to traditional family housing that can help older adults transition to a new, less stressful…See More
Jan 5
Deana Caraballo might attend David Gussin's event
Thumbnail

516Ads/ 631Ads - FREE Networking Night @ Ramada Plaza at Ramada Plaza

January 25, 2018 from 6pm to 8pm
516Ads/ 631Ads Ramada Plaza: FREE Networking Night Thursday, January 25, 2018 6PM @ Ramada Plaza516Ads & 631Ads is proud to team up with…See More
Jan 5
Deana Caraballo posted a status
Jan 5

© 2018   Created by 516 Ads.   Powered by

Badges  |  Report an Issue  |  Terms of Service