How Can You Get a Credit Card Under 18?

It is common for individuals under 18 to seek ways to obtain a credit card, often to begin understanding personal finance or to establish a credit history. Directly applying for a credit card can be challenging for this age group due to specific regulations. However, legitimate avenues are available for young individuals to gain access to credit and start building a financial foundation.

Legal Restrictions on Underage Applicants

Federal law imposes limitations on who can independently apply for a credit card. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 stipulates that applicants must be at least 18 years old to open a credit card account in their own name.

Beyond the age of 18, individuals under 21 face additional hurdles. They must demonstrate independent income sufficient to make minimum payments on the credit card debt. Alternatively, they can apply with a co-signer who is at least 21 years old and is jointly liable for the debt.

Becoming an Authorized User

One of the most accessible methods for individuals under 18 to gain credit card access and begin building a credit history is by becoming an authorized user on another person’s account. An authorized user is permitted to use the primary cardholder’s account but is not legally responsible for the debt incurred. The primary cardholder, typically a parent or trusted adult, adds the minor to their existing credit card account.

This arrangement can contribute to the authorized user’s credit history if the credit card issuer reports the account activity to credit bureaus under their name. Positive account management, such as consistent on-time payments and low credit utilization by the primary cardholder, can reflect favorably on the authorized user’s credit report. While some issuers have no minimum age for authorized users, others may set it as low as 13. It is important for the primary cardholder to manage the account responsibly, as they remain solely liable for all charges, and irresponsible use could negatively impact both parties’ credit.

Secured Credit Cards and Other Paths

Secured credit cards offer another avenue for individuals, typically those over 18, to establish credit. These cards require a cash deposit, which often serves as the credit limit for the card. This deposit acts as collateral, providing security to the card issuer. Secured cards are designed for individuals with limited or no credit history and can be a valuable tool for building credit through responsible use.

Card activity, including payments, is reported to credit bureaus, allowing the cardholder to build a positive payment history. While primarily for those aged 18 and older, secured cards are often considered a stepping stone towards unsecured credit. Once an individual turns 18 and meets income requirements, student credit cards also become an option. These cards are specifically tailored for students and may have more lenient approval criteria compared to standard unsecured cards.

Establishing a Credit History

Building a positive credit history is important for an individual’s financial future. A strong credit history can influence access to future loans, apartment rentals, and even insurance rates. Credit bureaus, such as Equifax, Experian, and TransUnion, collect and maintain information about an individual’s borrowing and payment behaviors.

Positive behaviors like making payments on time, keeping credit card balances low, and managing a diverse mix of credit accounts contribute to a strong credit score. Conversely, late payments or high credit utilization can negatively impact a credit score. Understanding these mechanics and practicing financial literacy from a young age is beneficial for responsible credit management and avoiding debt.