12. Barbara has just applied for a credit card. She is an 18-year-old high school graduate with few valuable possessions and no credit history. If Barbara is granted a credit card, which of the following is the most likely way that the credit card company will reduce ITS risk?
a.) It will make Barbara's parents pledge their home to repay Karen's credit card debt.
b.) It will require Barbara to have both parents co-sign for the card.
c.) It will charge Barbara twice the finance charge rate it charges older cardholders.
d.) It will start Barbara out with a small line of credit to see how she handles the account. This is by far the best method of establishing credit but what the question fails to address is whether Barbara has any way of paying back the money she has charged. It seems that there is increased focus in the school system to give kids an opportunity to test the personal financial waters while they are still in high school. But until her parents can help her develop the discipline and self-control that managing credit requires, she might be better off with a checking account with a debit card.
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