Credit card options for teens under 18 years old | finder.com
Credit card options for teens under 18 years old

Credit card options for teens under 18 years old

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It’s a common question on parents’ minds: How young is too young to get a credit card? Legally, no one can get a credit card on their own unless they’re at least 18 years old. Anyone under 18 can only be an authorized user on someone else’s — for example, their parents’ — account. Here’s how to teach your teen solid financial habits and your best options to start them on solid footing.

Credit card or no credit card?

You might think your teen is far too young to use a credit card. But you’ll find two big reasons it could be a good idea for them to have one.

1. Teach your teen how to use a credit card responsibly.

After adding your teen as an authorized user, you have control over their account and can see how they use their card. With insight into their spending, you can more effectively teach them solid financial habits. It’s better for them to learn from you now than figure everything out on their own later.

2. Help your teen build credit early.

Most people start with a brand-new credit history when they’re ready to get a credit card. This usually means they’re limited to student cards and secured cards, both of which typically come with limited features. You can help your teen build an impressive credit history before they reach adulthood. Just add them as an authorized user on your account and consistently make payments on time. When they turn 18, their credit may be strong enough to expand their card options considerably.

Be careful about bringing your teen aboard

Before adding your teen as an authorized user, consider how responsible you are as a cardholder. Why? Because your teen’s fortunes will rise and fall with yours. If you pay on time, your teen’s credit will improve. If you consistently miss payments, you’ll damage your teen’s credit. Bring your son or daughter for the ride if you’re on top of your credit card payments. But if you have trouble keeping up, it’s probably better not to add authorized users at all.
The “under 21” user’s guide to credit cards

Debit and prepaid cards first — then credit cards

Though your teen could benefit from a credit card, you don’t have to give them one right away. In fact, it might be a good idea not to: A credit card can be a powerful financial tool, but only if it’s used responsibly. Teach your teen solid financial habits as early as possible. When you’re confident your child has the skills to manage their money, consider letting them graduate to a credit card.

Credit cards for different age groups

Tweens: 11–13 years old

This age range is a good time to introduce your tween to debit and prepaid cards. These cards are a relatively safe way to teach your child how to spend responsibly. They don’t accrue interest, and they draw from preloaded money through a bank account or other source.

Teach your tween about the concept of a credit limit. Load the card with more money than your tween actually needs, and make that amount the “credit limit.” Then instruct them to keep spending well below that limit. The point is to teach your tween how to keep their credit utilization ratio low. For prepaid cards, consider options like FamZoo and TD Go, which allow you to monitor your child’s spending.

Teens: 14–17 years old

If your teen proves they’re able to responsibly use a debit or prepaid card, consider letting them graduate to a credit card. After you add them as an authorized user, you can monitor their spending. At the same time, you can teach them how to manage credit before they get their own card.

Teach your teen how to make card payments on time. Set up automatic payments so that you never miss a payment on your teen’s card account. Meanwhile, ask your teen to repay you monthly by a certain date. This helps them learn how to make card payments on time. If they miss a due date, neither their nor your credit score will drop — your automatic payments have you covered.

Encourage your teen to pay off their full balance each month. This is a great habit that will keep them out of debt later. While you’re at it, praise your teen for keeping their credit utilization ratio low.

Is there a minimum age to become an authorized user?

Many card issuers — Bank of America, Capital One and Chase — have no minimum age for authorized users. Others have minimum ages of 13 to 16.

Know the risks of having a credit card

While you still have them under your wing, teach your teen how to avoid trouble with a credit card. Here are a few common pitfalls they should know about.

  • Making only the minimum payment. A cardholder is allowed to make only the minimum monthly payment on their credit card. However, that’s arguably the worst thing to do behind paying late. Paying the minimum allows interest to snowball and debt to accumulate.
    Here’s what to do: Show your teen why it’s smart to pay off their balance in full each month. Teach them how credit card interest accumulates, and how it can be avoided.
  • Overspending. Teach your teen that they should avoid spending close to their credit limit. Carrying a high balance puts one in danger of incurring overlimit fees, on top of accumulating high debt. Many experts recommend keeping spending under 30% of one’s credit limit.
    Here’s what to do: Encourage your teen to spend less than they receive from their allowance or job. Teach them how their credit utilization ratio affects their credit score. And explain why it’s smart to keep their ratio under 30%.
  • Paying late. This is a sure path to decreasing a credit score. Because your teen is an authorized user on your account, you can protect them by paying your card bill as usual. But if you see signs your teen may pay late in the future, it’s best to nip the problem in the bud.
    Here’s what to do: Set up automatic payments on your card account so that you never miss a payment on your teen’s card account. Meanwhile, ask your teen to repay you by a certain date each month. Encourage them to set up phone or calendar reminders so they don’t forget.

How does my credit utilization ratio affect my credit score?

Provider rules and recommended credit cards

Banks Which banks offer authorized users under 21
American Express cross-icons
Bank of America transparent-green-tick
Capital One transparent-green-tick
Chase transparent-green-tick
Citi transparent-green-tick
Discover cross-icons
Wells Fargo transparent-green-tick

Frequently asked questions

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Name Product Credit Score Min. Annual Fee Intro Balance Transfer APR Reward Value per Dollar Secured or Unsecured Annual Fee APR for Purchases (Purchase Rate) Intro APR for Balance Transfer
680
95
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1
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$95
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Earn $200 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & Fees
680
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550
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680
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Earn up to $250 back. Earn $150 back after you spend $1,000 or more in purchases with your new Card within the first 3 months of Card Membership. Plus, earn an additional $100 back after you spend an additional $6,500 in purchases within your first 12 months. You will receive the cash back in the form of a statement credit. Rates & Fees
720
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680
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14.74%, 18.74% or 24.74% variable
0% for the first 15 months (then 14.74%, 18.74% or 24.74% variable)
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680
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12.74%, 16.74% or 20.74% variable
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Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
195
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Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
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300
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Earn 50,000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
690
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690
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680
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An intro offer rewards cardholders with a $250 value (25,000 online bonus points) after spending $1,000 within the first 90 days of account opening
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Kevin Joey Chen

Kevin Chen is a world-travelin', copy-writin', Game of Thrones-watchin' credit cards writer for finder.com. When he's not crunching the numbers on bonus points and comparing APRs, you can find him flying around the world in search of the perfect beer.

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US Credit Card Offers

Important Information*
Deserve® Classic Card
Deserve® Classic Card

APR

24.49
variable

Annual fee

0 For the first year
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Luxury Card Mastercard® Gold Card™
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