Can a Minor Open a Credit Card Account?

Obtaining a credit card is a significant step toward financial independence. Many individuals, especially parents, wonder about the eligibility of minors for credit card accounts. Understanding the regulations and available options is important for young people building financial literacy and their guardians. This overview addresses common questions about minors and credit card access.

Legal Age for Credit Card Accounts

Individuals must be at least 18 years old to enter into a legally binding contract for a credit card account in the United States. This age requirement ensures applicants possess the legal capacity to understand and fulfill financial obligations associated with credit.

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 significantly impacted credit card eligibility for young adults. This federal law requires individuals under 21 to demonstrate independent income or have a co-signer for approval. Many major card issuers no longer offer co-signing, making it necessary for those aged 18 to 20 to prove sufficient income to repay debt on their own.

Ways for Minors to Use Credit

The most common method for a minor to gain access to credit is by becoming an authorized user on an adult’s credit card account. An authorized user receives a card linked to the primary cardholder’s account, allowing them to make purchases. This arrangement provides an opportunity for minors to learn about credit management in a controlled environment.

To add a minor as an authorized user, the primary cardholder contacts their credit card issuer to provide the minor’s personal information, such as name, date of birth, and Social Security number. Some card issuers have minimum age requirements for authorized users, often 13 to 16, but many do not specify an age limit. Being an authorized user can help a minor establish a credit history, as account activity may be reported to credit bureaus, potentially benefiting their future credit score. Secured and student credit cards, while useful for building credit, require applicants to be at least 18 years old and meet income criteria, making them unavailable for minors.

Parental Responsibilities and Credit Building

When a minor is added as an authorized user, the primary cardholder retains full legal responsibility for all charges made on the account, including those incurred by the authorized user. The primary cardholder should establish clear spending rules and monitor the minor’s usage to prevent unexpected debt. Some credit card companies allow primary cardholders to set spending limits for authorized users.

The credit activity of the authorized user account can significantly impact the minor’s credit report and score. Positive actions, such as consistent on-time payments and low credit utilization by the primary cardholder, can help the minor build a positive credit history. Conversely, late payments or high balances on the primary account could negatively affect the authorized user’s credit profile. This early exposure to credit, if managed responsibly, can lay a foundation for the minor’s financial independence and future access to credit.