How Old Do You Have to Be to Get a Credit Card?
Understand the age requirements and other key criteria for credit card approval, with practical options for young applicants.
Credit cards offer a convenient way to manage finances and build a credit history, but are governed by specific age requirements. Understanding these rules is important for first-time applicants. Age is a primary factor in eligibility, alongside other financial considerations.
The Minimum Age Rule
In the United States, an individual must be at least 18 years old to apply for a credit card independently. However, the Credit CARD Act of 2009 introduced additional provisions for applicants under 21. The Act dictates that individuals between 18 and 20 must either demonstrate independent income or have a co-signer.
The requirement for independent income means applicants must prove they earn enough to make minimum payments. The law does not specify a minimum income, but it must be sufficient to cover obligations. This provision aims to protect young adults from accumulating debt they cannot repay. While a co-signer is an option, many major card issuers no longer permit them.
Ways to Get a Credit Card Under 21
For individuals under 21 who do not meet the independent income criteria, several avenues exist to gain access to a credit card. One common method is becoming an authorized user on another person’s account. As an authorized user, an individual receives a card and can make purchases, but is not legally responsible for the debt incurred.
This arrangement can help build a credit history, as the primary cardholder’s payment activity is reported to credit bureaus, benefiting the authorized user. However, the primary cardholder assumes full financial responsibility for all charges.
Another option, though less common now, is applying with a co-signer. A co-signer is someone who agrees to be equally responsible for the debt if the primary cardholder fails to make payments. This provides security for the issuer, enabling approval for applicants with limited income or credit history. Both the primary applicant and the co-signer share the financial risk, and missed payments can negatively impact both parties’ credit scores.
Secured credit cards offer another path for young adults to establish credit. These cards require a refundable cash deposit, which serves as the credit limit. For example, a $300 deposit would result in a $300 credit limit. Secured cards reduce issuer risk, making them more accessible to individuals with no credit history. Responsible use, including on-time payments, helps build a positive credit history, which can lead to qualifying for an unsecured card.
Other Requirements for Credit Card Approval
Beyond age, credit card issuers consider several factors when evaluating any application. A primary consideration is the applicant’s income. Issuers assess whether an applicant has sufficient income or assets to cover minimum payments and existing obligations. This evaluation helps ensure that new credit is extended responsibly.
Credit history also plays a role in the approval process. Lenders review an applicant’s credit report to assess past credit behavior. For younger applicants or those new to credit, a limited or non-existent credit history can make approval more challenging for traditional unsecured cards. While a hard inquiry can temporarily reduce a credit score by a few points, responsible credit usage over time can lead to a stronger credit profile.