What Credit Cards Can You Get at 18?

Credit cards are a useful tool for building a credit history from a young age. Establishing credit early can be beneficial for future financial endeavors, such as securing loans for a car or a home, or renting an apartment. Understanding how credit cards work and how to manage them responsibly is a fundamental step for young adults entering the financial world. This knowledge helps individuals make informed financial decisions.

Eligibility for 18-Year-Olds

The ability for an 18-year-old to obtain a credit card in the United States is governed by the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This law prohibits issuers from granting new accounts to individuals under 21 unless specific conditions are met. The primary requirement is that the applicant must demonstrate independent income sufficient to make the required payments, or they must have a co-signer who is over 21 and has the ability to repay the debts.

Independent income refers to funds the applicant has direct access to, without relying on others. Acceptable sources of independent income can include wages from a part-time or full-time job, earnings from freelance work, scholarships, grants, or consistent allowances. Loans, non-cash assistance like utility vouchers, or one-time gifts are not considered acceptable income for credit card applications. Some financial institutions may consider residual amounts from scholarships and grants, after tuition and other college expenses are covered, as income.

If an 18-year-old lacks sufficient independent income, a co-signer can help them qualify for a credit card. A co-signer, typically a parent or guardian over the age of 21, agrees to share legal responsibility for the debt incurred on the account. This means that if the primary cardholder fails to make payments, the co-signer is legally obligated to cover the balance. This places a financial liability on that individual, making their credit history and ability to pay a factor in the application process.

Becoming an authorized user on another person’s credit card account is another option for young adults to begin building credit. An authorized user receives a card linked to the primary account holder’s line of credit and can make purchases, but they are not legally responsible for paying the bill. The primary cardholder remains responsible for managing the account and making payments. This arrangement can help the authorized user establish a positive credit history, provided the primary account is managed responsibly with on-time payments and low credit utilization.

Types of Credit Cards for Young Adults

Several types of credit cards are suited for 18-year-olds. Secured credit cards are a common starting point for individuals with no credit history. These cards require a refundable security deposit, which typically becomes the card’s credit limit. For example, a deposit of $200 to $500 could result in a credit limit of the same amount. This deposit acts as collateral for the issuer, reducing issuer risk and easing approval for new users.

Secured credit cards function like traditional cards for purchases, and responsible usage is reported to major credit bureaus. Consistently making on-time payments and keeping balances low on a secured card helps build a positive credit history. After a period of responsible use, often six to twelve months, cardholders may become eligible to upgrade to an unsecured credit card, at which point their security deposit is typically returned.

Student credit cards are another accessible option, designed for students. These cards feature more lenient approval criteria, recognizing students may have limited credit history. Eligibility usually requires proof of enrollment in a two- or four-year college or trade school, and applicants still need to meet income requirements or have a co-signer if under 21. Student cards generally come with lower credit limits and may offer student-centric rewards, such as cash back on certain purchases.

Student credit cards may have higher Annual Percentage Rates (APRs). These cards serve as a tool for students to build credit while managing their finances during their academic years. The goal is responsible use to establish a credit foundation for future financial needs.

Becoming an authorized user is a method of credit access for young adults. This approach allows an 18-year-old to benefit from the primary cardholder’s established credit history without needing to qualify for a card independently. The account activity, including payment history and credit utilization, may be reported to credit bureaus for the authorized user, helping to build their credit profile. This is beneficial for those with no credit history, offering a low-risk way to accumulate positive credit data.

Applying for Your First Credit Card

Before initiating a credit card application, gathering necessary information is important. Applicants need to provide their full legal name, current address, date of birth, and Social Security Number (SSN) or Individual Tax Identification Number (ITIN). Information regarding income is also required, including the source, amount, and frequency of earnings. This might include details about current employment and how long the applicant has worked there.

Details about housing costs, such as monthly rent or mortgage payments, may also be requested. If a co-signer is involved, their personal and financial information is needed for the application. Many credit card issuers offer online application forms, but applications can also be submitted in person at a bank branch, by phone, or through mail.

Once information is compiled, the submission process is straightforward. For online applications, this usually involves reviewing the entered details and clicking a “submit” button. When submitting a physical application, it would involve handing over the completed form to a bank representative or mailing it to the issuer. After submission, applicants may receive an instant decision, or the application might enter a pending review status, with a confirmation email or notification often provided. The issuer evaluates the application based on the provided information and eligibility criteria, including the applicant’s ability to repay the credit.

Managing Your New Credit Card

Upon receiving a new credit card, understanding the monthly statement is important. The statement details the statement balance (total amount owed for the billing period) and the minimum payment due (smallest amount required to keep the account in good standing). It will also show the payment due date, the Annual Percentage Rate (APR), and any interest charges incurred. Familiarizing oneself with these components helps avoid fees and manage debt effectively.

Making payments on time is important for building a positive credit history and avoiding late fees. Paying the full statement balance each month avoids interest charges and prevents debt accumulation. Payments can typically be made through various methods, including online portals, mobile apps, by mail, or over the phone. Setting up automatic payments can help ensure timely payments and prevent missed due dates.

Credit utilization, the amount of credit used compared to the total credit limit, impacts credit scores. A low credit utilization ratio indicates responsible credit management. Financial experts recommend keeping credit utilization below 30% of the available credit. For example, on a card with a $500 limit, a balance of $150 or less would maintain a healthy utilization ratio. Paying down balances throughout the month, even before the statement closes, can help keep this ratio low.

Regularly checking credit reports is a good practice. Federal law grants consumers one free copy of their credit report every 12 months from each of the three major consumer reporting companies: Equifax, Experian, and TransUnion. These reports can be accessed through AnnualCreditReport.com. Monitoring allows individuals to review their payment history, account information, and identify any potential errors or signs of fraudulent activity.