Can Kids Get Credit Cards? How Minors Can Build Credit

A credit card allows individuals to borrow funds from an issuer, typically a bank, for purchases or cash withdrawals. This creates a debt that must be repaid, usually with interest if the balance is not paid in full by the due date. Credit cards provide a pre-approved credit limit, the maximum amount that can be borrowed. Unlike debit cards, which draw directly from a bank account, credit cards provide access to borrowed money.

Legal Eligibility for Credit Cards

Federal regulations establish clear guidelines for who can independently obtain a credit card. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) is a consumer protection law that stipulates an individual must be at least 18 years old to open an account in their own name. Beyond the age requirement, the CARD Act also mandates that applicants demonstrate an independent ability to repay debt, requiring sufficient income from sources other than allowance or gifts. For individuals under the age of 21, the law imposes an additional layer of protection.

If a young adult aged 18 to 20 cannot demonstrate sufficient independent income, they typically need a co-signer on their credit card application. This co-signer, who must be at least 21 years old, takes on legal responsibility for the debt if the primary cardholder defaults on payments. The co-signer’s income and credit history are then considered during the application process. The CARD Act also restricts how credit card companies can market their products to college students, prohibiting certain promotional tactics like offering gifts on college campuses for applications. These provisions aim to prevent individuals from accumulating debt they cannot manage.

Ways Minors Can Access Credit

While individuals under 18 cannot legally obtain their own credit card accounts, there is a common method for them to use credit: becoming an authorized user on an existing account. An authorized user is an individual added to a primary cardholder’s credit card account by the account owner. This arrangement allows the authorized user to make purchases using a card issued in their name, which is linked to the primary account. The primary cardholder retains full legal responsibility for all charges made on the account, including those made by the authorized user. The authorized user is not legally obligated to pay the debt, meaning the minor is not directly borrowing money from the issuer.

To add an authorized user, the primary cardholder typically contacts their credit card issuer. They provide the minor’s name and other requested information, such as date of birth or Social Security number. Once approved, a card may be issued in the authorized user’s name, allowing them to make purchases up to the primary account’s credit limit. Some issuers may have a minimum age requirement for authorized users (e.g., 13 years old) or charge a fee to add an authorized user.

Building Credit History as a Young Adult

Once a young adult reaches the age of 18, they become legally eligible to apply for their own credit cards, though establishing a credit history can still be a challenge. Secured and student credit cards are common tools designed to help individuals with limited or no credit history begin demonstrating responsible credit behavior.

A secured credit card requires a cash deposit, which typically serves as the credit limit. This deposit acts as collateral, reducing the risk for the card issuer and making these cards accessible to those without an established credit history. As the cardholder makes consistent, on-time payments, their payment activity is reported to the major credit bureaus, helping build a positive credit history. The security deposit is generally refundable if the account is closed in good standing or graduates to an unsecured status.

Student credit cards are tailored for college students, often featuring more lenient approval criteria than traditional unsecured cards. Applicants must be at least 18 years old and provide proof of enrollment in an academic institution. Student cards require applicants to demonstrate an ability to repay, showing proof of income from a job, scholarships, or other sources. If under 21, a co-signer may be necessary if independent income is insufficient. Responsible use, including on-time payments, helps young adults establish their credit profiles.