The perfect age to get your child a credit card may depend on a few reasons. He or she may have to be prepared to manage the card properly. Also, you must find out which credit card to obtain so that you can benefit most from the arrangement.
Why it’s wise to get your kid a credit card before he/she becomes 18
Here are the reasons why you might want to get your child a credit card before he/she turns 18:
1. Building credit
Presently, most parents might want to help their kids to get a credit card. It is only because they want to help their kids to build credit on their own responsibly.
If you are following FICO credit score, then you must also know that FICO considers 5 factors to calculate a credit score. They are as follows:
- Payment history
- Credit utilization
- Length of credit history
- New credit
- Credit mix
A decent length of credit history will help your kid build good credit. So, if you’re going to help your kids build credit, you’ll also have to teach them good spending habits.
2. Teaching healthy habits
As I said earlier, to get your child the first credit card, you should concentrate on teaching your kids good habits and healthy thinking towards money. It will make your kids responsible enough to manage their credit cards. A majority of people, who find themselves in knee-deep debt, may carry a bad spending habit from the very beginning of their lives.
As a parent, work with your kids and differentiate between what you really need and what you want! Once they know the difference and learn how much it can cost them, it will go a long way toward keeping them out of financial trouble.
3. Controlling impulse buying
By analyzing your kid’s monthly purchases and other expenses, you can help your kids to have an insight that they are spending more (if they are doing so) than they can afford.
So, you should teach your kids about avoiding two things that can hurt their credit score the most. The first one is keeping high balances and the second one is making late payments.
4. Providing a safety net
Good credit habits are behaviors we hope our kids will start following on their own. But practically, as they grow older, they would make mistakes and gradually learn from them. Unfortunately, each “learning opportunity” stays on a credit report for seven years. Thus, the last reason to get your child the first credit card while they are still under your financial roof is for you to be able to provide a safety net.
By keeping an eye on their card statement, you can be sure that they aren’t wasting their money on silly things, or getting into a trap of monthly charges. You may also secure them from identity thieves if you keep a proper watch.
5. They can use it in an emergency
If you can give your kid a cell phone so they can call you in case of an emergency, why don’t you give them a credit card for the same reason?
It’s unlikely that your son or daughter will need to use the credit card often for emergencies. But it might give you some peace of mind that they won’t get into any trouble if they run out of gas or forget to carry cash while traveling.
It is a good idea to put rules on using the card, though, so you both agree on what qualifies as an emergency expense. You should teach your kid the value of an emergency fund. You may also tell them to pay off any sudden credit card expenses that arise. This way kids can get the entire credit limit intact for use in emergencies. So, do not waste your time getting your child a credit card.
Which credit card providers issue credit cards for children under 18?
Adding your child as an authorized user can be a wise choice. However, you may face several issues if your credit card provider doesn’t allow it or has an age requirement.
To get your child a credit card, you need to determine how the top credit card issuers set up the age criteria.
| Credit Card Consumer | Age requirement |
|---|---|
| U.S. Bank | 16 years |
| Discover | 15 years |
| Barclays | 13 years old |
| American Express | 13 to 15 years old |
| Wells Fargo | No minimum age requirement |
| Bank of America | No minimum age requirement |
| Chase | No minimum age requirement |
| Capital One | No minimum age requirement |
| Citi | No minimum age requirement |
If your credit card provider does not belong to this list, call the number on the back of your card and ask them about their age requirements.
If you find that your credit card provider won’t allow you to get your child a credit card as an authorized user, or has a strict minimum age requirement, you may definitely apply for a new credit card from a different provider.