What Age Can You Add a Child to a Credit Card?
Understand the practicalities and implications of adding a minor to your credit card. Learn how to responsibly introduce credit and build financial foundations.
Many parents consider adding their children as authorized users on a credit card account to introduce financial concepts. This approach offers an early lesson in credit management and raises questions about the appropriate age and process.
Understanding Authorized User Age Rules
Credit card issuers in the United States have varying policies for the minimum age of an authorized user. While 13 is a common age, some issuers have no minimum, and others set it at 15 or 18. This differs from federal regulations, which require individuals to be 21 to open their own credit card account unless they have independent income or a co-signer.
An authorized user receives a card linked to the primary account but is not legally responsible for debt. The primary cardholder retains full legal obligation for all charges. This allows a minor to use the card and potentially build a credit history without the legal liability of a primary account holder.
Steps to Add a Child as an Authorized User
Adding a child as an authorized user is a straightforward process initiated by the primary account holder. This can be completed by contacting the credit card issuer directly, online, or by telephone. The primary account holder will need to provide identifying information for the child.
Required details include the child’s full name and date of birth. Some issuers may require a Social Security Number (SSN). After providing the necessary information, the issuer will mail a new credit card with the authorized user’s name to the primary account holder’s address. Once received, the card can be activated, granting the child access to the account’s credit line.
Account Holder Responsibilities and Credit Impact
The primary account holder bears full financial responsibility for all charges made on the credit card, including those by an authorized user. Failure to pay can lead to negative consequences for the primary account holder’s credit score, such as late payment marks or increased credit utilization.
The authorized user’s activity can also affect the primary account holder’s credit. If spending leads to high balances or payments are missed, both the primary cardholder’s and the authorized user’s credit scores can be negatively impacted. However, if the primary account is managed responsibly with on-time payments and low credit utilization, the authorized user can build a positive credit history. This positive reporting helps the child establish a credit profile for future credit products.
Other Financial Products for Minors
Beyond credit cards, several other financial products are available that can help minors learn about money management. Debit cards, for instance, are linked directly to a bank account and allow spending only of funds already available. Many banks offer checking accounts with linked debit cards for teens as young as 13, often requiring a parent or guardian as a co-signer on the account. Some specialized financial platforms even offer debit cards for children with no minimum age, managed through parental controls.
Prepaid cards offer another option, functioning similarly to debit cards but are not linked to a bank account. Funds are loaded onto the card, and once the balance is depleted, no further purchases can be made until more money is added. These cards can provide a controlled spending environment without the risk of debt. Custodial accounts, such as Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts, are investment accounts managed by an adult for the minor’s benefit. The assets within these accounts belong to the minor and are transferred to them upon reaching the age of majority, which typically ranges from 18 to 21 depending on state law.