Student offered credit card

CLAPTON

callum9999 wrote: »

How patronising can you get. 19 IS a "real" adult...

And how on earth do you know what "experience" he has? By the time I was 19 I'd travelled extensively and held jobs on 3 different continents - which is probably better than what many "real" adults (whatever they are?) achieve in their whole life...

reread your own post and apply some critical analysis to its absurdity

callum9999

Cerys1 wrote: »

Thanks, all, for replies. Clapton didn't sound at all patronising to me - but supportive and sensible.

My son is a young adult but unfortunately - and this of course is something that may be short lived - lacking in just about any financial acumen.

Then I feel sorry for your son. I know if my mother thought that I wasn't a "real adult" at age 19 I'd be pretty annoyed...

CLAPTON wrote: »

reread your own post and apply some critical analysis to its absurdity

There is nothing absurd in there. If you think it's absurd, why not explain why instead of trying to give a clever retort that merely makes you look pathetic.

izools

Cerys1 wrote: »

lacking in just about any financial acumen.

And if he is prevented from ever having a financial facility for which he will have to take responsibility, he will never develop financial accumen.

He's 19.

He may smoke and drink too much.
He may stay up too late at night.
He might eat unhealthy food from time to time.
He may overspend from time to time.
And any number of other things you will probably never hear about...

He's at university for crying out loud! This is supposed to be one of the most educational, but also one of the happiest times of his life. He will learn invaluable lessons not only in an academic sense but also about life at large, and the sooner he learn them, the better.

The student loans company lend him money to cover his fees despite him not being employed. Are they irresponsible?

With students being on a limited / non existent income, they need to borrow to support themselves through university.

It is understood by banks and society at large that university students have a reasonable chance of going on to earn some kind of respectable income at some point and will therefore be able to handle repaying a modest amount of debt when they graduate.

Interest free overdrafts and small limit credit cards are, and have been for a good decade now, an essential component of student life.

Be happy that he has been given the opportunity to learn about finance so early in his adult life.

If he defaults, he'll learn not to do it again. At least this way the (potential) bad credit will affect him only at the very start of his adult life and not when it matters most - when he might need to buy a house - which is years off.

But frankly, I think you should demonstrate more faith in your son. This will instill confidence. Right now I wouldn't be half surprised if your approach merely instills despondency.

If you're going to say anything whatsoever to him, please for his sake be supportive and help impart best practices about using a credit card - only for essential purchases, do your level best to keep the balance to what you can afford to clear in full at the end of each month, set up a direct debit for the minimum payment to avoid fees if he forgets the due date one month, etc.

Oh, and the all important S.75 protection - being a man of his age he might buy concert tickets or plan trips places, and if events get cancelled or organizations go bust, S.75 protection which is only offered when purchasing via a credit card - is an absolute asset.

Don't take away his toys, demonstrate pride that he has them :beer:

Apologies for such a long rant, had my mother in the back of my mind then... but I trust you get my point

opinions4u

Cerys1 wrote: »

My son has just told me that during an interview for a bank ac with overdraft facility at his local HSBC branch, he was offered a credit card.

Most banks offer a credit card. It works in a very similar way to an overdraft. You spend the bank's money and at some point you have to repay it.

Perhaps it was a student credit card, with a limit on lending, but it nevertheless strikes me as deeply irresponsible behavior by the bank. He said no to the card - thank goodness.

On the subject of the overdraft, students having one is normal. Credit cards, used intelligently, are usually free. Irresponsibility has to come from the card user for such a facility to become a problem.

OTT if I write to the bank venting my feelings about irresponsible lending to students? Your thoughts would be appreciated.

You would come across as a bit silly. Don't do it.

zerog

Unless there are previous issues with credit (almost impossible before you turn 18) everyone who has an HSBC student account will get a credit card with £500 limit and overdraft of £1000, rising by £250 a year. This is automatic, AFAIK.

I got both credit card and overdraft sent to my house in Australia (well, a letter about the overdraft) 2 months before I came back to start university. My parents and I hadn't lived in the UK for over 6 years at that point. We had an HSBC account in Australia - which is probably why they allowed me to borrow from them in the UK.

I guess banks were more willing to give out credit a few years ago, and I don't work for one. My information is based on what my friends who are still at university have told me.

bouncydog1

HSBC student accounts give a £500 cc limit. You can refuse the OD facility if you wish. The account also used to come with an enhanced savings offer for the first year and 2 years free travel insurance.

Please stop interfering in your son's affairs. Whilst it is worrying for us as parents (my DD is same age as your son and also 2nd year at Uni) it is also our role to treat them as adults and respect their decisions. I am very proud of how my DD has changed whilst at Uni. She is very confident and well able to deal with her own finances. If she has an issue on something she will call to discuss and then make a decision.

The bank will quite rightly ignore any objections you raise. Obtaining a student account at HSBC in our area involves a personal interview and in depth questioning - certainly not a case of the account just being opened. The bank were clearly satisfied by what your son told them when he applied.

CLAPTON

a default or two doesn't do much harm after all

it simply stops you get a mortgage for 6 years
makes it difficult to rent a flat for 6 years as they usually do credit checks
makes it difficult to get a car loan if he needs one for his first job.


on the good side he will probably learn not to do it again.

worth reading some of the posts on the debt free wannabe board and the loan boards about the consequences of !!!!less youth.

zerog

Children learn from their parents. My parents (and anyone else in the family who talked about cards) put everything on their credit cards and paid in full, and every year we all got a free flight (when they were actually free instead of just discounted like nowadays).

Until I started living on my own and reading MSE etc. I didn't even realise that you don't have to pay back the full amount every month. It was just unthinkable to borrow money and buy things before you could afford them.

The OP should be grateful that her son actually told her about what happened. He could have just taken the card and not said anything. And if someone comes from a family where overspending on a card is normal, then don't be surprised when the children repeat the same mistakes.

Shelldean

Cerys1 wrote: »

Thanks, all, for replies. Clapton didn't sound at all patronising to me - but supportive and sensible.

My son is a young adult but unfortunately - and this of course is something that may be short lived - lacking in just about any financial acumen.

the Lacking in an financial acumen is the issue here not what a bank has offered.

My DD is in the same boat, 2 yr uni student tho she has just turned 20.
She thought she'd need the deposit for a flat share and the only way ths could be achieved was through an overdraft. So like your son she went in to HSBC and asked about getting an OD on her account. Like your son she was also offered a credit card.
She accepted although she did tell them she didnt want the limit they offered and suggest and was accepted for a lower limit. ( cant recall exact figures)
She uses it for small purchases each month. Think the biggest was £28, and it's paid in full every month. She didn't need the OD in the end as she moved in with relatives, so thats also unused.

Now while she may not need a credit check now, when she finishes uni she probably will. And by sensible use of her card she will have a nice little credit history.

I fully believe my DD will use her card sensibly, I'm guessing you feel the temptation will be too much for your son? Hence the anger at HSBC for putting temptation in his way?

Alarae

As an actual university student, I thought I would chip in.

I am a second year, living in a shared house with other students. I currently have a large overdraft (unused) with Lloyds TSB and when I went in to make a separate bank account for house bills, they offered me a student credit card with a £1000 limit.

I also have two other credit cards (got last month) mainly for cashback on the purchases, and pay them off in full each month.

I am actually surprised your son doesn't already have an overdraft. I don't use mine, but they come in handy when you need to make a sudden large payment (such as a house deposit) and won't have the funds available until the next loan instalment.

A credit card isn't the devil for a lot of people- as long as the student with the offered credit facility uses it responsibly, and was taught as much, it won't be a problem. In fact, my student credit card actually has the best APR considering my limited credit history, as the other cards I have are almost double, so it would help if I needed to make a larger payment.

Plus by building my credit history now, it will help me on my way to get onto the 'prime' credit ladder just after I finish my course, so I'll have access to better cashback/0% purchase offers if I need them.