Can I Get My Child a Credit Card?

While unusual, a credit card can help minors understand financial responsibility and the fundamentals of credit. Establishing an early credit history, with proper guidance, can provide a foundation for future financial endeavors like obtaining loans for education or housing. Options for minors involve specific regulations and controlled exposure, allowing for learning without immediate, direct financial liability.

Eligibility and Age Requirements

In the United States, individuals cannot independently enter into binding contracts, including credit card agreements, until they reach age 18. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 reinforced these limitations for young adults. Under the CARD Act, credit card issuers are generally prohibited from issuing a credit card to anyone under 21 unless the applicant can demonstrate independent means of repaying debt or has a co-signer who is 21 or older and can repay. For those between 18 and 20, proof of sufficient income is typically required, such as wages, allowances, or certain financial aid. The intent behind these regulations is to protect young consumers from accumulating debt they cannot manage, recognizing that many individuals under 21 may not have established financial independence.

Available Options for Minors

Since minors cannot independently obtain a credit card, specific avenues allow them to gain access under adult supervision. These options offer varying degrees of responsibility and access.

Authorized User

A common method is for a parent or guardian to add a minor as an authorized user on their existing credit card account. An authorized user receives a card linked to the primary account and can make purchases, but is not legally responsible for the debt incurred. The primary cardholder retains full financial responsibility for all charges, including those made by the authorized user. This arrangement allows the minor to learn about spending and payment cycles without direct financial liability.

Joint Account Holder/Co-signer

A less common option is to open a joint credit card account or have a minor co-signed on an account. In a joint account, both parties are equally and legally responsible for all charges and debt repayment, regardless of who made the purchases. Opening a joint account or requiring a co-signer often involves stricter requirements, as the creditworthiness and financial standing of both individuals are assessed. Many lenders offer fewer joint credit card options compared to authorized user arrangements. If payments are missed or balances become high, both parties’ credit scores can be negatively impacted.

Student Credit Cards

Student credit cards are designed for young adults aged 18 and older enrolled in a college or university. These cards often feature lower credit limits and may be easier to qualify for, even with limited credit history. Applicants typically need to provide proof of enrollment and, if under 21, demonstrate independent income or have a co-signer. While not for true minors (under 18), they serve as a common first credit card for young adults transitioning to financial independence.

Credit Reporting and Its Effects

Having a credit card, even indirectly, can impact a minor’s credit report and future credit score. The way this information is reported varies by account type.

For authorized users, the primary account’s payment history can appear on the authorized user’s credit report, depending on whether the card issuer reports activity to the major credit bureaus (Equifax, Experian, and TransUnion). If reported, positive payment history and low credit utilization can help build the authorized user’s credit history. Conversely, late payments or high balances on the primary account could negatively affect their credit report.

In contrast, a joint credit card account means its payment history is reported for both account holders. Both the parent and child are equally responsible for the debt, and any payment behavior will affect both their credit scores. Missed payments or high credit utilization on a joint account can significantly harm both individuals’ credit histories.

Student credit cards directly build the young adult’s own credit history, as the account is in their name. Responsible use, such as on-time payments and low balances, contributes positively to their credit score. Generally, minors under 18 do not have credit reports unless they are authorized users, joint account holders, or victims of identity theft.

Applying for a Credit Card

The application process for a credit card involving a minor depends on the chosen method, whether adding an authorized user or pursuing a student credit card. For adding an authorized user, the primary cardholder typically initiates the request with their credit card issuer, often through their online account, mobile app, or by phone. Required information for the authorized user usually includes their full name, date of birth, and sometimes their Social Security number. The primary cardholder should confirm with the issuer if there are any age restrictions for authorized users or if there’s a fee for adding one.

Applying for a student credit card involves the young adult, aged 18 or older, submitting an application directly to a card issuer. This process typically requires providing personal identification details, such as a Social Security number, date of birth, and physical address. Applicants must also provide financial information, including their gross annual income and employment status. If the applicant is under 21, they must demonstrate independent income or may need a co-signer, who would also provide their financial information. Proof of college enrollment is also a common requirement.