How Old Do You Have to Be to Get a Credit Card With a Co-Signer?

For young adults seeking financial independence, understanding credit card eligibility and the potential role of a co-signer is crucial. Understanding the specific regulations and options available is essential for building a responsible credit history, as these rules significantly shape the pathways to acquiring credit.

Credit Card Eligibility Based on Age

To enter a credit card agreement, an individual must be at least 18 years old, as this is the legal age to form contracts. However, for those between 18 and 20 years of age, additional requirements apply due to the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This federal law was enacted to protect young consumers from accumulating excessive debt and to promote responsible lending practices.

Under the CARD Act, applicants under 21 must demonstrate an independent means of repaying any debt incurred on the credit card account. The income can come from various sources, including employment, allowances, or even the unused portion of scholarships and financial aid after tuition and college expenses are covered. Without this verifiable independent income, securing an individual credit card account before turning 21 becomes challenging.

Once an individual reaches 21 years of age, the restrictions imposed by the CARD Act concerning independent income or the need for a co-signer are no longer applicable. At this point, credit card issuers primarily assess an applicant’s credit history and current income to determine eligibility and credit limits. This age threshold often marks a more straightforward path to obtaining an individual credit card.

The Concept of a Co-Signer and Current Limitations

A co-signer is an individual who agrees to take on legal responsibility for a debt if the primary borrower fails to make payments. This arrangement means the co-signer is equally liable for the entire debt, and their credit can be negatively impacted if payments are missed or the account defaults. While co-signing is common for various loans, such as auto loans or mortgages, its applicability to individual credit card accounts for young adults has significantly diminished.

The CARD Act of 2009, while originally permitting a co-signer as an alternative to independent income for applicants under 21, has led to a practical shift among major credit card issuers. Most issuers no longer offer the option to apply for a new, individual credit card account with a co-signer. This is because the independent income requirement became the predominant method for compliance, making co-signer arrangements less common for credit cards.

While a simple co-signer for an individual credit card account is rare, a joint account is a different arrangement where two individuals are both primary account holders and share equal responsibility for the debt. Both parties’ credit histories are typically considered during the application process, and all account activity is reported on both credit reports. However, joint credit card accounts are not widely offered by most issuers and are generally less common for young adults establishing their first credit.

Practical Ways for Young Adults to Get a Credit Card

Given the strict income requirements for individuals under 21 and the limited availability of co-signer options for individual credit cards, several practical alternatives exist for young adults to begin building their credit history.

Authorized User

One common and effective approach is becoming an authorized user on another person’s existing credit card account. As an authorized user, the young adult receives a card with their name on it and can make purchases, but they are not legally responsible for the payments. The primary cardholder remains solely liable for all charges and ensures payments are made. This arrangement allows the authorized user to benefit from the primary cardholder’s responsible payment history, which can help establish or improve their own credit report, provided the issuer reports authorized user activity to credit bureaus.

Secured Credit Card

Another viable option is a secured credit card, which requires the cardholder to provide a cash deposit as collateral. This deposit typically determines the credit limit for the card. Secured cards function much like traditional credit cards, allowing purchases and requiring monthly payments. By consistently making on-time payments, individuals can demonstrate creditworthiness and build a positive payment history. Many secured cards are designed to graduate to an unsecured card after a period of responsible use, and the initial deposit is often refundable upon account closure or upgrade.

Student Credit Cards

For college students, student credit cards are specifically designed to help those with little to no credit history. These cards often have more lenient approval requirements, although applicants usually need to provide proof of enrollment and may still need to show some form of income. Student credit cards often come with lower credit limits and may offer student-specific perks, providing a tailored entry point into the credit world.