Most young adults can’t wait to get their first credit card. But getting a credit card as a teenager isn’t as easy as it used to be.
Today, 21 is the legal age for a young adult to get a credit card in their own name.
Some banks will approve applicants at least 18 years old. But only if they have reliable income or an eligible cosigner.
But what if your child is under the age of 18? Can they get a credit card?
It may come as a surprise, but under certain circumstances it’s possible for someone under 18 to have a credit card.
Read on for tips on how to gauge whether your son or daughter is ready for a credit card before the age of 18.
What Is the Right Age for a Child’s First Credit Card?
There’s no wrong or right age for a child’s first credit card.
Each parent must decide for themselves when their child is financially mature to handle plastic.
Child's financial mindset
Of course, some parents wouldn’t dare dream of giving a child under the age of 18 a credit card—and for good reason.
Some teenagers don’t understand the fundamentals of credit management.
They may view a credit card as easy access to cash, or a tool for buying whatever they want, whenever they want.
To avoid the risk of their children running up a huge balance, some parents wait until a child is old enough to qualify for a card on their own.
This is understandable. But at the same time, jump-starting a child’s credit history at a young age has its advantages.
Many parents start thinking about a credit card for their children around ages 14-15 as that's the age range when their kids are entering high school.
Every child is different.
Some children are great with money from an early age. They know the importance of budgeting, saving, and spending with self-control.
If this sounds like your children, they might be more ready for a credit card than you realize.
This doesn’t mean that you should put a credit card in their hands and hope for the best.
Test run with a debit card
Before trusting them with a credit card, let them practice with a prepaid debit card.
You can deposit your child’s allowance onto the card and then observe their spending habits.
- Can your child manage their money without your supervision?
- Or, does your child give into financial temptation and spend their money impulsively?
The way your child handles a prepaid debit card is a pretty good sign of how they’ll handle a credit card.
The good thing about a debit card is that your child can only spend what you deposit on the card.
There’s no risk of overdrawing a bank account or debt.
If your child makes mistakes with a debit card, you can give extra training on money management without a large debt hanging over your head.
What’s the Best Alternative for a Child’s First Credit Card?
If you agree to give a child under 18 a credit card, one option is adding your child as an authorized user on one of your cards.
This credit card remains in your name, but you’ll receive an extra card with your child’s name on it.
You’re still the primary account holder. You’ll receive the bill every month and you’re responsible for the monthly payments.
When adding a user on your credit account, the minimum age of the user varies depending on the credit card.
Minimum Authorized User Age for U.S. Credit Card Issuers
|Card issuer||Minimum age for authorized user|
|Bank of America||Any age|
|Capital One||Any age|
|Wells Fargo||Any age|
Pros of Getting Your Child a Credit Card Under 18
Some people might argue that young people under the age of 18 are too young for a credit card.
But there are undeniable benefits of allowing your child to have a credit card at a young age.
1. Build a credit history early
A high FICO score comes from paying bills on time and keeping debts low.
Building credit at a young age can help your child own a home or car sooner. This is because they’re able to build a solid score earlier.
The longer a person’s credit history, the stronger their credit score.
For this reason:
A person who establishes their credit history at 16 might have a higher credit score than someone who didn’t establish credit until 22.
2. Children learn to manage credit under parental guidance
In addition to the opportunity to establish credit early, your children can also learn smart credit card management under your guidance.
Young adults who establish credit later in life—like after moving out of their parents home—often learn credit management on their own through trial and error.
This can result in rookie mistakes and credit damage, which can take years to undo.
Cons of Getting Your Child a Credit Card Under 18
Despite the benefits of allowing a child under 18 to have a credit card, there are also a few risks.
1. An authorized user could damage your credit score
Because your children have access to your credit card, there’s the risk that they’ll accumulate a high credit card balance.
As the primary account holder, you’re ultimately responsible for this balance.
And if you can’t pay, your credit score suffers.
If you add a child as an authorized user:
- set rules on how the card should be used
- limit how much they’re able to spend on the card each month
- make your child should be responsible for any charges they put on the card each month
Clarify that they should only spend what they can afford to pay back. If your child abuses this privilege, take away the credit card.
It’s also important to monitor the credit card balance throughout the month to ensure they’re spending responsibly.
2. Your actions can affect your child’s credit
So it’s also important that you manage the account responsibly.
This includes paying the bill on time every month and keeping a low balance.
Late payments and maxing out the credit card can have a negative effect on your child’s credit score (and your score too).
What About a Secured Credit Card?
Another option when helping your child build credit at an early age is applying for a secured credit card.
Secured credit cards are different because they require a security deposit. This deposit acts as collateral.
You’ll apply for the credit card in your name, pay the security deposit, and then add your child as an authorized user.
The credit limit with a secured credit card is equivalent to the security deposit.
So if you make a deposit of $500, you’ll have a credit card with a credit limit of $500.
This type of credit card might be a good option because it typically has a lower credit limit. Thus, a lower risk of accumulating massive debt.
And if your children wait until the age of 18 to apply for a credit card, it may be easier for them to get a secured credit card on their own.
The best part:
The bank may convert the account to an unsecured credit card after 12 to 24 months of timely payments. At this point, the bank refunds the security deposit.
Keep in mind that secured credit cards tend to have annual fees and higher interest rates.
Getting a credit card at an early age can help young adults build their credit early and learn about credit management.
Unfortunately, not all young people are mature enough to handle this responsibility. So if you’re thinking about giving your child a credit card, be honest about their financial maturity.
Make sure they know how to manage credit before putting a card in their hands.