How Old Do You Need to Be to Get a Credit Card?

Credit cards are financial tools allowing individuals to borrow funds for purchases, with the obligation to repay, often with interest and fees. They play a significant role in modern finance by offering convenience for transactions, providing a means for emergencies, and building a credit history. Responsible use of a credit card can lead to a positive credit score, an important factor in obtaining future loans at favorable interest rates.

Understanding the Minimum Age

Individuals must be at least 18 years old to legally enter into a credit card contract in the United States. However, federal law, specifically the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, imposes additional requirements for applicants under the age of 21. This legislation aims to protect young consumers from accumulating excessive debt by ensuring they have the financial capacity to manage a credit card. Under the CARD Act, applicants between 18 and 20 years old must demonstrate independent income sufficient to make payments on the account. While co-signers were once a common option, many major issuers no longer permit them for new credit card applications.

Ways to Access Credit Before Turning 18

While individuals cannot open their own credit card accounts before turning 18, becoming an authorized user on another person’s credit card is a common method to gain access to credit. An authorized user receives their own card linked to the primary account holder’s credit line, allowing them to make purchases. However, the primary cardholder remains solely responsible for all payments and managing the account, including any charges made by the authorized user.

This arrangement can be beneficial for building a credit history, as the account’s activity, including on-time payments, may be reported to the credit bureaus. This can provide a head start in establishing a positive credit profile without a credit check. It is important for the primary cardholder to maintain responsible credit habits, such as timely payments and low credit utilization, as their account activity can impact the authorized user’s credit report.

Getting Your First Credit Card at 18 or Older

For individuals aged 18 or older looking to obtain their own credit card, particularly those with limited or no credit history, specific card types can help them enter the credit system. Student credit cards are designed for college students and often come with benefits like rewards for good grades or lower credit limits. These cards can serve as an effective tool for students to establish their credit history while managing smaller credit lines.

Secured credit cards present another viable option for building credit, especially for those with no credit history or a less-than-perfect credit score. These cards require a refundable security deposit, which typically becomes the credit limit for the card. The deposit acts as collateral, reducing the risk for the issuer and making these cards more accessible. By using a secured card responsibly, making on-time payments, and keeping balances low, cardholders can demonstrate creditworthiness, which can eventually lead to qualifying for an unsecured card and having their deposit returned.

The Application Process

When applying for a credit card, gathering the necessary personal and financial information streamlines the process. Applicants need to provide their full legal name, date of birth, current address, and Social Security number or Individual Taxpayer Identification Number. Information regarding annual income, employment status, and housing costs is also commonly requested to assess repayment ability.

After submitting an application, the credit card issuer will conduct a credit check to evaluate the applicant’s creditworthiness. This involves a “hard inquiry” on the applicant’s credit report, which can temporarily affect their credit score. Following the review, the applicant will receive notification of approval or denial, and if approved, the physical credit card is mailed.