Can I Put a Credit Card in My Child’s Name?

Parents often consider adding their children to their credit card accounts. This practice can serve various purposes, from providing a financial safety net for emergencies to offering a practical way to introduce children to credit and money management. These considerations help families make informed choices about shared credit.

Age and Legal Considerations

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 impacts who can open a credit card account. This federal legislation generally prevents individuals under the age of 21 from obtaining their own credit card unless they can demonstrate independent income sufficient to make payments or have a co-signer over 21 years old who accepts responsibility for the debt. This provision ensures young adults are not burdened with debt they cannot manage.

While the CARD Act restricts minors from independently opening credit card accounts, it does not impose a federal minimum age for becoming an authorized user on an existing account. Credit card issuers set their own policies regarding the minimum age for authorized users. Some issuers permit authorized users as young as 13 years old, while others may require them to be 15 or 16, and some have no specified minimum age at all. This allows parents to add a child to their account, depending on the card issuer’s terms.

Process for Adding an Authorized User

Adding a child as an authorized user to an existing credit card account is a straightforward process initiated by the primary cardholder. Most credit card issuers allow this to be done through their online banking portal, mobile application, or by calling customer service.

To add an authorized user, the primary cardholder generally needs to provide personal details for the child. This information includes the child’s full name, date of birth, and mailing address. Some issuers may also request the child’s Social Security Number, which can be important for credit reporting purposes. After the information is submitted and approved, the credit card company issues a new card in the authorized user’s name, which is sent to the primary cardholder’s billing address.

Impact on Credit and Liability

Adding a child as an authorized user can affect both the child’s and the primary cardholder’s financial standing. For the child, authorized user status offers an opportunity to begin building a credit history. This positive impact occurs if the primary account is managed responsibly, characterized by timely payments and low credit utilization. The extent of this credit-building benefit can vary, as not all credit card companies report authorized user activity to all major credit bureaus, and credit scoring models may interpret this data differently.

Despite the child’s ability to use the card, the primary cardholder retains full financial responsibility for all charges made on the account. Any spending by the authorized user, including overspending or missed payments, directly impacts the primary cardholder’s credit score and financial obligations.

Parents can implement strategies to manage an authorized user’s spending. While some credit card issuers allow primary cardholders to set spending limits for authorized users, this feature is more commonly found with business credit cards than personal ones. For personal accounts, parents can proactively monitor account activity, often through online banking or mobile apps, and discuss clear spending guidelines with the child. Additionally, some issuers provide the option to lock or unlock an authorized user’s card.