You don’t often hear about credit cards for teens. The reason for this is that the credit card rules from the Federal Reserve places serious restrictions on creditors, requiring them to prove that any applicants are actual adults. However, there are ways around this that are quite legal. Hence, the MSU Visa Platinum for Teens credit card.
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The idea behind a teen credit card is to teach your teen fiscal responsibility. Many teens have no concept of what it’s like to pay bills, or even that credit cards aren’t free money but require being paid back. This leads to adults that have trouble being responsible with their credit card use.
Michigan State University Visa Platinum for Teens Credit Card – How it Works
So, you’re probably wondering how a credit card for a teen actually works. In the case of the MSU Visa Platinum for Teens credit card, it begins with the parents of the teen. Essentially, if you’re a mother or father, you are a sponsor for this credit card. You must sign an agreement that you will pay any credit card debt incurred if your teen defaults on the payment.
What’s more, this credit card is more like your own credit card with your teen’s name added to the list of authorized users. The major difference here is that your teen will have credit responsibility as well. In order for your teen to become an authorized user, they will have to provide their Social Security number.
The maximum credit limit for this credit card is $500. No matter how good your teen’s credit is, the max will not exceed this amount. The starting limit will vary between $100 and $500 depending on your own credit score, your debt-to-income ratio, and so on.
The bill for this credit card will be sent to your teen, but as stated above if your teen doesn’t pay the bill, the next bill goes to you. It will then also have a late fee, and if the late fee causes the card to go over the limit, then it will also include a credit card over-the-limit fee.
Michigan State University Visa Platinum for Teens Credit Card – Terms
As with any credit card, this credit card has terms to which you must agree. This includes an interest rate of up to 17.9%, which applies to purchases as well as balance transfers and cash advances. There is no annual fee for this credit card but there are ATM fees of 1% of your balance total, and 3% for any other type of cash advance.
The late payment fee for this credit card will range between $15 and $25. The over-the-limit fee and return payment fee is $25.
Michigan State University Visa Platinum for Teens Credit Card – Verdict
It’s hard to give a verdict for this credit card.
It’s fairly unique, as not many banks or credit unions offer this option for teenagers to hold ad build credit. However, there are others that do. So checking into those terms is wise.
But, as to the wisdom of giving your teen a credit card, that’s totally up to you. The interest rate could end up being fairly high, but the good news is that the credit limit will never exceed $500, so the debt won’t get out of control.
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