It’s getting harder for parents to raise financially independent young adults.
Many banks refuse to open inidual checking accounts for 16- and 17-year-olds, requiring parents to jointly own the account, even if the youngsters have a job. Colleges urge parents to link their bank accounts or credit cards to the prepaid cash cards that double as their students’ ID cards, to ensure a regular flow of funds from the Bank of Mom and Dad.
And under the new credit-card law that goes into effect early next year—part of a broader move toward aggressive consumer protection—parents of those under 21 will have to agree to take responsibility for their kids’ credit cards unless the young applicants can show they have the income to qualify.
All of this seems to encourage parents to interfere with—and maybe even bail out—these young adults. And it comes at an age when the youngsters themselves should be taking on personal responsibility and making their own financial decisions.
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Ryan Heshka
So this is the kind of mean and rotten parent I’ve become: Recently, I vigorously persuaded my 19-year-old daughter to get her first credit card.
Most young people should consider getting a credit card in college because they will need a credit record to lease an apartment, land a car loan, qualify for a good rate on car insurance and maybe even get a job. My daughter wanted to wait until next year to get a card, but I would have had to cosign for it—something I was unwilling to do, even though she’s very conscientious.
The reason? I believe youngsters need room to make their own mistakes—and learn from them when the consequences (and dollar amounts) are low. It’s a parenting theory I learned from Jim Fay, co-founder of Love & Logic Institute Inc. in Golden, Colo. Since …
Read the original article at WSJ
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Tags: account, Banks, Car, Cards, cash, consumer, Credit Cards, financial, fund, Insurance, Job, money, rent
