What Is the Youngest Age to Get a Credit Card?
Understand the age requirements for getting a credit card and explore practical ways young adults can begin building a solid credit history.
Credit cards serve as a widely used financial tool, enabling purchases on credit and offering a convenient way to manage expenses. Understanding how to acquire one, especially for younger individuals, involves navigating specific age requirements and regulatory frameworks. For many, a credit card represents an early step toward establishing financial independence and building a credit profile.
The Minimum Age Requirement
The legal minimum age to independently obtain a credit card in the United States is 18 years old. However, the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 significantly impacts applicants under the age of 21. This federal statute introduced specific provisions for young adults.
The CARD Act mandates that individuals aged 18 to 20 must demonstrate an independent means of repaying their debt to qualify for a credit card. This means proving sufficient personal income, such as earnings from a job, or even regular allowances or grants and scholarships that exceed tuition costs. Without verifiable independent income, applicants under 21 generally require a co-signer, typically an adult over 21 who agrees to assume joint legal responsibility for the debt.
Options for Young Applicants
For individuals under 21 or those with limited credit history, several pathways exist to acquire a credit card. One common option is becoming an authorized user on another person’s account, often a parent or guardian. As an authorized user, a person receives a card linked to the primary account and can make purchases, though the primary cardholder remains solely responsible for payments. This arrangement can help begin building a credit history, provided the issuer reports authorized user activity to credit bureaus.
Another avenue for young applicants is a secured credit card. These cards require a refundable security deposit, which typically sets the credit limit. Secured cards are generally easier to obtain because the deposit mitigates the risk for the issuer, making them a suitable starting point for those with no credit history. Responsible use, including consistent on-time payments, can lead to the card graduating to an unsecured account and the deposit being returned.
Student credit cards are specifically designed for college students and often have more lenient approval criteria than traditional unsecured cards. While still subject to the CARD Act’s independent income requirement for those under 21, these cards may consider various forms of income relevant to students, such as part-time job earnings, allowances from family, or even leftover financial aid after tuition. These cards typically feature lower credit limits but can provide an accessible means for students to start building credit while enrolled.
Building a Credit History
Establishing a credit history is a fundamental aspect of financial management, particularly for young individuals. A credit history is essentially a record of how a person has managed debt over time, reflected in their credit report. This history is used by lenders to assess creditworthiness, influencing access to future loans and housing.
Utilizing credit cards, especially the options available to young applicants, directly contributes to building this history. When a person becomes an authorized user, the account’s payment activity may be reported to credit bureaus, adding to their credit file. Similarly, secured credit cards and student credit cards provide a direct means to establish a track record of responsible borrowing. Regular, on-time payments are paramount, as payment history accounts for a significant portion of a FICO credit score.
Beyond timely payments, managing credit utilization is another important element. This refers to the amount of credit being used compared to the total available credit. Maintaining a low utilization ratio signals responsible credit management to lenders. A credit report also details the length of credit history, types of credit accounts, and new credit applications, all of which factor into a credit score. Consistently demonstrating responsible credit behavior through these factors helps create a positive financial foundation.