You typically have to be 18 years old to get a credit card on your own. But credit card issuers make it easy to get a credit card for a child under 18 as an authorized user on your account.
In fact, T. Rowe Price found in its 2017 Parents, Kids and Money survey that 18% of kids ages eight to 14 have credit cards.
The right age to get your child a credit card depends on the reasons for getting it and whether your child is ready to manage it. It's also important to know which credit card to get so that you can benefit most from the arrangement.
Why It's Smart to Get a Credit Card for a Child Under 18
Here are three key reasons why you might want to get a credit card for your son or daughter:
1. It Can Help Them Establish a Credit History
Any credit account that lenders report to the three credit bureaus can affect your credit. And if your child is heading to college in the next few years, establishing a credit history sooner than later can help them immensely.
For example, private student loan companies typically require a credit check and having some credit history can also help your child get their first student credit card. They may even be able to finance their first car without needing you as a cosigner.
Keep in mind, though, that not all credit card issuers report authorized user account information to the credit bureaus. To find out if yours does, call the number on the back of your card and ask a customer service representative.
Also, depending on which credit scoring model is used, your child's authorized user status may not impact their credit as much as if they were to be the primary owner of the account.
2. You Can Teach Kids About Smart Credit Card Use
Credit cards can be dangerous if you're not careful. The average credit card balance was $6354 at the end of 2017, based on Experian data.
If you can teach your children about responsible credit card use, they'll be less likely to make mistakes out of ignorance. Talk to them about the card's annual percentage rate (APR) and how credit cards typically charge higher APRs than other typical debts.
Explain how it's important to avoid charging more to the credit card than you can afford to pay off each month. Also, show how you can avoid interest altogether by paying off your credit card balance on time and in full.
Teaching your children these lessons in a training-wheel environment can help them develop good financial habits that will serve them well when they enter the adult world.
3. They Can Use It in an Emergency
If you gave your child a cell phone so they can call you in case of an emergency, why not do the same thing with a credit card?
It's unlikely that your son or daughter will need to use the credit card often for emergencies. But it could provide you with some peace of mind knowing that they won't get stranded without gas money.
It's a good idea to put rules on using the card, though, so you both agree on what qualifies as an emergency expense. Also, you can teach your child the value of saving up an emergency fund so you can immediately pay off any surprise credit card expenses that arise.
Is Your Child Ready for a Credit Card?
Using a credit card requires a great deal of responsibility, and it's not for everyone—even some adults. It's important to have a conversation with your child to determine if they're ready for a credit card. Keep in mind their age isn't as important a factor as their maturity level and willingness to learn.
For example, does your son or daughter typically have problems following rules you set? Do they have a healthy attitude toward money?
You know your kids better than anyone else, so use your judgment and make the call based on that knowledge. Whether or not your child is ready for a credit card, it's wise to create some ground rules for their new spending power.
For starters, decide who's going to pay the bill. According to the same T. Rowe Price survey, 41% of parents have their kids pay their own credit card bills. Doing this may encourage your child to use the card more responsibly than if you were to foot the bill each month.
If you aren't going to have your child to pay off their own credit card purchases, discuss and agree when it's appropriate to use the card and when it isn't. If you find that they're breaching these boundaries, follow up and remind them of your agreement.
Which Issuers Allow You to Get a Credit Card for a Child under 18?
Adding your child as an authorized user can be a good thing, but you may run into issues if your credit card issuer doesn't allow it or has an age requirement.
To help, we've done some research to determine how the top credit card issuers handle it.
|Credit Card Issuer||Age Requirement|
|American Express||13 or 15 years old, depending on the card|
|Barclays||13 years old|
|Bank of America||No minimum age requirement|
|Capital One||No minimum age requirement|
|Chase||No minimum age requirement|
|Citi||No minimum age requirement|
|Discover||15 years old|
|U.S. Bank||16 years old|
|Wells Fargo||No minimum age requirement|
If your credit card issuer isn't included in this list, call the number on the back of your card and ask about their age requirement.
If you find that your credit card issuer doesn't allow you to get a credit card for a child under 18 as an authorized user, or has a minimum age requirement that's too high, consider applying for a new credit card.
There are plenty of great rewards credit cards from top issuers that have no age minimum. Also, keep in mind that your child's purchases as an authorized user generate rewards just like yours. So, getting a card with better rewards can make the arrangement more valuable for you.
Proceed With Caution
Adding your son or daughter as an authorized user on your credit card can help them build credit and develop good credit habits. But if you're not careful, you could be on the hook for purchases they've made, whether you approve of them or not.
But if you follow the tips we've outlined, you'll be able to turn this into a positive experience for both you and your child.