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.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 |  |
| Bank of America |  |
| Capital One | |
| Chase | |
| Citi | |
| Discover | |
| Wells Fargo | |
