2 big debt topics to discuss with your high school grad

Before your son or daughter heads off to school, have these talks about debt.

High school used to seem so far away. Then college did. And now it’s here. Though college graduation may seem like a long 4 years away, it’ll be here for your son or daughter before you know it. That’s why it’s so important to take the time now to discuss these 3 debt topics with your high school grad.

Student cards.

While your son or daughter is at college, he or she may be interested in getting a student credit card. In fact, college freshman may run across student card promotions as soon as they get on campus, during orientation, or the first week of classes.

Though offers with these types of cards may include tempting perks and promotions, they’re still credit cards. Signing up for a student card can be a great way for your son or daughter to start establishing a credit history. Just make sure they know that when student cards are used, money is being borrowed and should be paid back on time. Like other cards, student cards may charge interest or fees on balances not paid in full every month.

Student loans.

If your high school grad will be taking out loans to finance their college education, the temptation is to put off thinking about that debt until after college. But that may be a mistake for a few reasons.

One is that it can be helpful to know which loans build up interest during college versus those that defer those interest payments until afterward. If your son or daughter is taking out loans falling under the former category, earning some income during school to help defray those interest accumulations may be a higher priority than it otherwise might’ve been.

Another key reason to start thinking about student debt now is that it may be helpful to remind your son or daughter that student debt is real debt that must be paid. Even though it may seem that student debt falls into a different category than do other kinds of debt, creditors will treat your son or daughter like an adult when it comes to the responsibility of paying the debt back.

Completing one’s high school education is a big accomplishment, and moving onto higher education is a big achievement. But when it comes to debt management, the best education on challenges that await may come from a few simple discussions at home.