Like it or not, it costs money to go to college. And parents are usually involved that transaction – what’s the best way to handle that.
"There’s several options. The first would be a debit card that’s linked to a checking account. So it could be a joint checking account with the parent of the child. Second would be a credit card and third would be a pre-paid card," said Susan Utsugi of Central Pacific Bank.
A pre-paid card is something like a mobile checking account.
"A pre-paid card is sort of like a credit card – - you’re loading cash onto that credit card. There’s a specific amount that the parent would load onto the pre-paid card and the student could spend up to that limit."
The primary advantage is for parents, obviously.
"One of the good things is a parent can control exactly how much is available to their child by loading up a specific dollar amount. One of the pros is that you can replace the card if it’s lost and it’s not like your credit card where there’s a lot of other issues if you lost your card."
The disadvantage to the pre-paid card is it may not be as widely accepted as a debit or credit card. What other tips are there when it comes time to sending the student out of the nest and off to college.
"Practice always helps. So before the student goes away to college, it’s a good idea to establish an account and give them a responsibility of handling a budget and that way, while they’re still at home, the parent can monitor the account and make sure that the account is being used responsibly."
See the original article at: KHON2 Developing Stories
