November 9, 2018 12:00 PM PT

How Old Do You Have to Be to Get a Credit Card

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Using a credit card can teach valuable lessons about responsible spending and budgeting. For some parents, it might be worth giving your child a credit card to build these skills at a young age.

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Under the law, people under 18 can't apply for credit cards. Applicants between the ages of 18 and 21 must provide proof of viable income or have a cosigner over 21 to qualify.

However, minors do have some options if they want a credit card. Read on to learn what they are.

Credit Card Options for Minors

Becoming an Authorized User
You can add a minor to your credit card as an authorized user to help them start building credit.

Authorized users have full access to a credit card. But they do not have a legal responsibility to pay the balance.

Be sure to set clear rules with any minor you add to your account. After all, you'll be responsible for all purchases they make.

Before taking this step, ask your card provider if it reports authorized user accounts to the credit agencies.

  • If they DO, the authorized user's credit report will reflect your credit and payment history.

  • If they DON'T, the authorized user won't build any credit from the card.

Once added, the authorized user will receive her own card with her name on it. Some cards, like Discover, allow up to five authorized users on one account.

Warning Box: Adding an authorized user does not increase the card's credit limit. If one of your cards has an authorized user, make sure your collective spending stays under 30% of the card's credit limit to keep both your credit scores healthy.

Card issuer companies differ on the minimum age for an authorized user.

If your card issuer is not listed, call your credit card company to find out the minimum age requirement.

Prepaid Debit Card
Prepaid debit cards are like gift cards that can be used anywhere. Once you load a prepaid card, it can be used to make purchases online or anywhere else credit cards are accepted. When the money runs out on the card, you either reload it or buy a new one.

Unlike an actual credit card, prepaid cards have no ties to your credit score. They work well for someone who would like to make online purchases but does not have a credit card.

If you are a legal adult who wants a credit card but has no credit history, keep reading to learn about additional options.

Best Card Options for Beginners

Any adult with a short credit history or poor credit score can become an authorized user or use a prepaid debit card. But young adults looking for a card can choose a few different paths.

  • Cosigner
    The Credit CARD Act of 2009 says credit card applicants between the age of 18 and 21 must have proof of income or other assets to show they can pay their credit card bill. But they can also find a cosigner.

    Even with proof of income, most young adults haven't built strong credit scores yet. Asking a parent or family member over the age of 21 to cosign an application increases the chances of approval. It may also lead to lower interest rates.

    But be careful: Cosigning links your credit histories together, so you should only act as a cosigner for someone you trust. If the cardholder makes late payments - or skips payments entirely - it will negatively affect the cosigner's credit score.

  • Student Credit Card
    Young people enrolled in college might consider a student credit card as a great way to start building credit.

    Although they tend to have lower limits than traditional credit cards, student cards offer a higher approval rate for new borrowers. Look for a card that does not have an annual fee and offers a favorable cash back rewards program.

  • Secured Credit Card
    If credit card issuers have denied you because of your short credit history, a secured credit card might be a good option.

    Secured credit cards require a collateral down payment in case you default on your payments. Because they require a cash down payment, secured cards often approve people with lower credit scores.

    Note: Interest rates on secured cards typically run higher than regular credit cards.

    After a 12- to 18-month period, some card companies allow cardholders to convert a secured credit card into a regular credit card.

    Tip: When choosing a secured credit card, find one that reports to credit bureaus as unsecured. Your credit score will benefit more.

Why Have a Credit Card as a Young Person

It's never too early to start building credit. While it takes a certain degree of responsibility to handle a credit card, the benefits can set a person up for financial success as an adult.

  • Teaches Fiscal Responsibility
    Credit cards teach young people how to spend carefully. Since an adult account owner can view all purchases of an authorized user, it's a great way for parents to monitor a child's spending and teach proper habits.

  • Builds Credit Young
    Most people enter adulthood with no credit history, which means they have a low credit score. They find it difficult to get approval for a credit cards, car loans and mortgages.

    Building credit history while you're young makes credit approval as an adult more likely.

    But be warned: beginning at a young age can also mean the potential for damaging credit. Be sure any minor added to your account as an authorized user understands the implications and responsibility that comes with a credit card - and that you can afford to pay off any of their spending mistakes.

Bottom Line

Although the law says you must be 18 years old or older to have a credit card, minors can use credit cards as authorized users.

Keep in mind, however, that the original cardholder holds most of the risk, as an authorized user has no legal responsibility to pay the bill. On the flip side, the authorized user's credit could be damaged if the cardholder pays late or skips bills.

For parents deciding whether to make a child an authorized user, think about whether you trust them to use a credit card responsibly.

More from CreditDonkey:


How to Use a Credit Card


Best Credit Card for First-Time Applicants


Starter Credit Cards: What's a Good Starter Card?

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