Ivan Penn, who writes the Consumers Edge column that appears regularly in the Times, also answers reader questions about consumer issues daily on our website (www.tampabay.com/news/ business; look for Consumer Edge heading). Ask the Times occasionally will run a sampling of those exchanges.
Rules protect, restrict
What can you tell me about debit and credit card options for students under 21?
Bill Hardekopf, chief executive officer of Lowcards.com, says the CARD Act began limiting credit options for students under the age of 21 in February. Hardekopf notes the good news is that the regulations protect students from aggressive credit card marketing on campus, but the law also restricts credit availability for students.
Hardekopf notes these options:
Credit cards: Students under the age of 21 can get a credit card if they have a co-signer or have proof of the ability to make payments. Co-signing should only be an option if your student can use a credit card responsibly. If the student makes a late payment, it also shows up on the co-signer's credit report. If the student can't pay off the debt, the co-signer is responsible for all the debt.
Debit cards: These cards are tied to checking accounts. Opt out of overdraft coverage to avoid overdraft fees. Online account alerts can notify you when the account falls below a specified balance. Debit cards do not help build credit scores and there may not be a sufficient balance during an emergency.
Prepaid cards: These can be purchased anywhere, even grocery stores. But they also have fees, so read the fine print before you purchase.
Secured cards: These cards have more fees and the interest rate is high, so pay them off each month. But secured cards are relatively easy for anyone to get because they are secured by a prepaid deposit. Make sure that the card reports to a credit agency. Secured cards from Orchard Bank and Public Savings Bank both report to credit agencies.
Think safety first
What cars are good for teen drivers?
Consumer Reports recently completed a review of cars best suited for teens in preparation for back-to-school. When you're picking a car for a teen — new or used — Consumer Reports "recommends picking cars with safety features such as electronic stability control and curtain air bags and good crash-test results."
Here are some of Consumer Reports' top suggestions:
Small sedans: Hyundai Elantra SE (2008-2010), Mazda3 (2007-), Scion xB (2008-).
Midsized sedans: Acura TSX (2004-), Honda Accord (2008-), Kia Optima (2007-).
Small SUVs: Honda CR-V (2005-), Nissan Rogue (2008-).
More information can be found in the September issue of Consumer Reports and online at www.ConsumerReports.org.