It is a common question that many people ask themselves: how old do you have to be to get a credit card? The answer, much like the rules and regulations applied to minors and adults, can vary slightly depending on your financial institution.
However, to have a credit card issued in your name, you’ll need to be considered an adult in your state of residence. Often, that means being 18 or older.
Though, this doesn’t mean you can’t have a credit card—you might just need to become an authorized user on an adult’s credit card account.
Below, we will discuss the minimum age requirements for receiving a credit card at some of the most popular banks in America as well as cover many other related topics and content.
Let’s jump in!
How Old Do You Have to Be to Get a Credit Card?
Getting a credit card in your own name requires you to be the age of majority in your state of residence. If, however, you don’t require the card to be held in your own name, you can qualify to have a card held by an adult, parent or guardian as an authorized user.
Several credit card issuers allow you to apply for a card as an adult with the intent of adding a child as an authorized user. Parents tend to do this for a number of reasons:
- First, credit card companies will often allow parents to add a child as an authorized user without having them provide any credit history. This is helpful for teens or young adults just starting out who don’t have a credit report yet.
- Secondly, it can be easier to build credit through piggybacking on someone else’s credit account rather than building credit on your own.
- Thirdly, authorized users aren’t responsible for paying off credit card purchases, though they can easily be removed from the account if necessary.
- Lastly, credit cards are often more of a convenience than an essential part of life—credit scores and credit reports don’t care how much you’re spending every month as long as you pay your credit card bill. Therefore, even if you add your kid as an authorized user but never give them a card, it can still help with building their credit.
What is an Authorized User?
Because minors can’t have credit cards held directly in their names, if they need to have access to a credit card, that will require being added to a parent or guardian’s credit card as an authorized user.
An authorized user is a person who is permitted to use a credit card account, but isn’t the primary account holder.
This means that authorized users are not responsible for making monthly payments on their credit cards, nor do they have access to view billing statements or transaction history online.
What Credit Cards Can You Have as an Authorized User?
If you want to get a credit card for your child, you’ll need to have them become an authorized user on your own account. This will have your credit history reflect on your credit reports as well as your child’s credit reports.
You can select from one of several credit card issuer options with companies like Capital One, American Express, Discover, Chase Bank, Bank of America, Wells Fargo and many others.
You will likely receive credit offers in the mail and in your email inbox as your child nears their teen years or becomes a young adult.
This can be for things as simple as having a card for use at gas stations, buying products online while at school or even being in need of something like a student credit card.
All of these options can help with building credit and earning good marks on credit reports from the credit bureaus.
You’ll often find many have attractive features like:
- Intro APR
- Cash Back
- Balance Transfers
- Travel insurance
- Credit scores through the mobile app or online portal
- No income requirements
- No credit scores or credit report requirements
- Low credit limit options
- Co-signer availability (meaning someone equally responsible for the credit card bill and not just as an authorized user)
What is a Credit Card for a Child?
Why would you give a minor a credit card? Having a credit card for kids may assist them by developing healthy money habits from an early age, allowing these financial literacy skills to compound from the start.
And if you don’t provide them a credit card early on with training wheels firmly attached? While certainly not always the outcome you’d encounter, one of the most common mistakes encountered by young adults is accumulating costly credit card debt.
Depending on your circumstances as their family member, you might be able to manage assistance for when this happens. Though, to head this off at the pass, you want to share, practice and instill financial literacy skills with them as early as possible—before real money is at stake.
Kids can learn about money management through several means, though the best option is through modeled behavior. In other words, seeing you handle credit cards responsibly as an adult.
If not managed properly, credit cards can quickly spell disaster because they front a line of credit, offering buying power you might not necessarily have the means to afford.
Combine this lack of financial resources with a considerable marketing effort to attract young consumers and it spells disaster from which it could take years to recover.
Though, all this doom and gloom isn’t a certainty. In fact, a teen can learn how to manage money prudently, establish good credit habits and absorb useful financial literacy skills to navigate credit cards themselves—though they’ll need your help!
Credit cards present an opportunity for a kid or teen to access credit for the first time and begin building a credit history. Though, your best first step is through exploring a kids debit card first.
This keeps the training wheels firmly attached until they’ve shown enough responsibility to manage their own money prudently.
From there, it’s your responsibility to teach them how credit cards work, why having a credit card account is a good step toward financial security and demonstrate what they can do for credit score.
Let’s now talk about kids’ debit cards, how they allow you to establish important concepts like savings goals and what they entail.
What is a Debit Card for Kids?
As we’ve discussed above, due to legal reasons tied to lack of capacity, minors do not have the ability to enter into legal contracts.
As a result, children can’t open their own bank account until they reach the age of majority in their state—often 18 years old.
Parents interested in offering their kids a bank account and paired debit card can still choose a number of possible paths:
1) Opening a sub account from their own bank account.
This can provide your kids with a card to use while you can maintain control over the account itself. Under this situation, it’s still likely that your child will need to be at least 13 years old before receiving a debit card.
However, these accounts may not come with the features you want for maintaining control over your child’s spending behaviors.
2) Opening a joint banking account.
Another option to consider includes opening a joint account with your kid or teen. This means you both have ownership over any joint accounts you share as well as the assets held inside them.
3) Opening a debit card for kids (and teens).
This route understands parents’ desires to teach their kids about money, while providing sufficient parental controls and oversight to make sure a child’s spending and money decisions are smart.
To accomplish this mission, debit cards for kids and teens offer parents custom spending controls, spending notifications, merchant blocking, daily and ATM spending limits, plus other controls enabled through feature-filled mobile apps.
Some new apps even allow you to lock the card or limit where your child spends money.
These cards also effectively function as a prepaid debit card for kids and teens because you can establish parental controls. Traditional banks or free debit cards might not allow you to do this beyond keeping the balance at a certain level.
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Previously Published on Young and the Invested
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