When Can I Open a Credit Card for My Child?

Understanding how and when a child can obtain a credit card involves age requirements and available options. Many parents consider this step to introduce financial literacy and help their children begin building a credit history. Providing access to credit can serve as a practical tool for teaching responsible spending habits and money management from an early age.

Understanding Age Requirements

In the United States, an individual must be at least 18 years old to open a primary credit card account. This aligns with the legal age for entering into binding contracts, which credit card agreements represent. Minors, individuals under 18, lack the legal capacity to independently enter such contracts, meaning any agreement they sign could be voidable. Credit card issuers are hesitant to extend credit directly to someone under 18 without an adult cosigner.

The Credit CARD Act of 2009 introduced additional requirements for young adults between 18 and 21 years old. This federal law mandates that individuals in this age group must demonstrate independent income sufficient to make credit card payments. If they cannot meet this income requirement, they may need a cosigner who is at least 21 years old and can assume responsibility for the debt. This legislation aims to prevent young adults from accumulating debt they cannot reasonably repay.

Options for Providing Credit Access to Minors

Since minors cannot open their own primary credit card accounts, the most common and practical method for them to gain credit access is by becoming an authorized user on an existing credit card account held by a parent or guardian. An authorized user receives a card linked to the primary account but is not legally responsible for the payments. The primary cardholder retains full financial responsibility for all charges made to the account, including those made by authorized users.

Adding an authorized user typically involves the primary cardholder contacting their credit card issuer, often through an online portal, mobile app, or by phone. The primary cardholder generally needs to provide the authorized user’s full name, date of birth, and in many cases, their Social Security Number (SSN). While some card issuers may have minimum age requirements for authorized users, often ranging from 13 to 16 years old, many do not specify a minimum age at all. A new card with the authorized user’s name can then be issued.

Building Credit History Responsibly

Becoming an authorized user can significantly contribute to a minor’s credit history, provided the credit card issuer reports authorized user activity to the major credit bureaus: Equifax, Experian, and TransUnion. When reported, the payment history and credit utilization of the primary account appear on the authorized user’s credit report. A history of on-time payments and low credit utilization on the primary account can positively impact the authorized user’s credit score, helping them establish a positive credit profile before they are old enough to apply for their own credit products.

Conversely, if the primary cardholder manages the account irresponsibly, such as making late payments or carrying high balances, this negative activity can also reflect on the authorized user’s credit report and potentially harm their credit score. It is therefore important for the primary cardholder to maintain excellent account standing to ensure the authorized user benefits from the arrangement.

Before adding a minor, it is advisable to confirm with the credit card issuer whether they report authorized user activity to the credit bureaus.

Practical Account Management

Once a child is an authorized user, effective management fosters financial responsibility. Parents should establish clear spending guidelines and expectations from the outset. While most consumer credit cards do not allow specific spending limits for individual authorized users, some issuers, like American Express, offer this feature. Even without formal limits, parents can communicate an agreed-upon spending threshold and monitor transactions closely.

Regularly reviewing account activity and statements together provides valuable teaching moments. Many card issuers offer online access and mobile alerts to track spending in real-time. This ongoing oversight allows for discussions about budgeting, the consequences of debt, and the importance of timely payments.

The goal is to cultivate sound financial habits, preparing the child for independent credit management in adulthood.