Can You Have a Credit Card Under 18?

A credit card offers convenience for purchases and represents a line of credit extended by a financial institution, allowing you to borrow funds up to a certain limit. Using a credit card responsibly involves making timely payments and managing the borrowed amount, which helps establish a financial history.

Credit Card Eligibility for Minors

In the United States, individuals must be at least 18 years old to legally enter into a credit card contract. This age requirement is rooted in contract law, as 18 is the age of majority. While turning 18 makes one technically eligible, federal law adds considerations for young adults.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 significantly impacted credit card access for those under 21. This legislation mandates that applicants between 18 and 20 years old must either demonstrate independent means of repaying debt or have a co-signer aged 21 or older. The intent behind these rules is to protect young consumers from accumulating unmanageable debt. Many major credit card issuers, however, no longer allow co-signers, making proof of independent income the primary path for individuals under 21.

Building Credit Before 18

While direct credit card ownership is restricted for those under 18, individuals can begin building a credit history. Becoming an authorized user on another person’s credit card account is a common and effective strategy. This typically involves a parent or guardian adding a minor to their existing credit card account.

As an authorized user, the minor receives a card linked to the primary account and can make purchases, but they are not legally responsible for the debt incurred. The primary cardholder remains accountable for all charges and payments. When the primary cardholder makes on-time payments, this positive activity is often reported to credit bureaus for the authorized user, helping to establish a credit history. The primary cardholder must maintain responsible spending habits and timely payments, as negative activity could also impact the authorized user’s developing credit file.

Applying for Your First Credit Card at 18

Upon reaching 18, individuals can sign credit card contracts independently. However, the provisions of the Credit CARD Act of 2009 continue to apply until age 21, meaning applicants must still demonstrate sufficient independent income to repay debt. This independent income can include earnings from a job, regular allowances, scholarships, or grants.

Several types of starter credit cards are designed for young adults with limited or no credit history. Student credit cards are tailored for those enrolled in higher education, often featuring lower eligibility requirements and benefits relevant to students. These cards may have lower credit limits and sometimes higher interest rates compared to standard cards, but they serve as a valuable tool for building credit.

Another option is a secured credit card, which requires a cash deposit that typically acts as the credit limit. This deposit provides collateral for the issuer, making secured cards easier to obtain for those with no credit history. Responsible use of a secured card, including on-time payments, can help establish a positive credit history and may eventually lead to an unsecured card. Applicants should research different options, understand the terms and conditions, and commit to responsible financial management from the outset.