Your daughter ran up the debt, she should pay it

Question for the expert

Dear Credit Wise,
My daughter was given two credit cards and had no job. Now they want money. Why do they give credit cards to students with no jobs? -- Brenda

Answer for the expert Dear Brenda,
That is an excellent question. While the Credit Card Act of 2009 included provisions to restrict the marketing of credit cards to students unless they have a co-signer or can prove they have independent income, obviously it still can happen. Your daughter is a case in point.

A bigger question for you and your daughter is what happens now? As you say, the creditors want their money. This is not a problem that will simply go away, so a decision needs to be made.

The most important thing to do right now is figure out a plan for repaying the debt. While you don't agree with the credit card companies for giving your daughter the cards, the fact remains that they did and she used the cards to purchase things. The consequences of those actions can teach your daughter an important financial lesson.

My first suggestion would be to have your daughter cancel her cards. It could be that the creditors have already closed the accounts, but if they have not, having her close the accounts will be a step in the right direction. For one thing, closing the accounts will cut off any ability your daughter may still have to charge. This will also help her credit report in the long run. It will look far better to future lenders to see that the accounts were closed at your daughter's request, not at the creditor's request. Don't despair if the creditors have already closed the accounts. Your daughter can work to overcome the negatives of this action, but it will take time. She must pay off the debt first.

What I would not suggest is that you just take care of this for her. It will be far more helpful for her in the long run if she can figure this out for herself. A job is the logical first step, and she shouldn't hold out for the high-paying dream job. Low-wage jobs are not glamorous, but the money she earns can, and should, be put toward her debt. If you do decide to help, at least set up a repayment plan between yourselves so that she understands that the debt is her responsibility, not yours.

If you feel like your daughter needs a more structured plan, she can contact a nonprofit credit counseling agency for help. A counselor will go over your daughter's financial situation and help her develop a plan to repay her debts. To locate a certified credit counselor, can contact either the Financial Counseling Association of America or the National Foundation for Credit Counseling.

Be wise with your credit!

See related: Despite law, cards finding their way into students' hands

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Updated: 01-20-2018