When Can You Open a Credit Card for Your Child?

Many parents consider introducing their children to credit cards as a practical step toward fostering financial literacy. This early exposure can provide valuable lessons in budgeting and responsible spending, preparing them for the financial responsibilities of adulthood.

Legal Age Requirements

In the United States, individuals must be at least 18 years old to open a primary credit card account in their own name. This requirement stems from the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which established specific consumer protections. The Act also stipulates that applicants under 21 must demonstrate independent means of repaying debt or have a co-signer or authorized user on an adult’s account. While these regulations govern primary account holders, minors under 18 can still access credit through specific arrangements, which differ from directly owning an account.

Credit Card Options for Minors

For individuals under 18, credit access typically occurs through two primary mechanisms: authorized user accounts and, less commonly, joint accounts. An authorized user account allows a parent, the primary account holder, to add a minor to their existing credit card. The minor receives a card linked to the parent’s account, and the parent retains full legal responsibility for all charges made on the account. To add an authorized user, the primary account holder typically provides the child’s full name and date of birth. The credit activity from an authorized user account may be reported to the child’s credit file, potentially helping them establish a credit history, but this reporting is not guaranteed by all credit card issuers.

Joint credit card accounts involve two or more individuals sharing equal responsibility for the debt and activity on the account. While possible, these accounts are less common for minors because both parties are legally and equally liable for all charges, and typically, both must demonstrate sufficient income to repay the debt. Opening a joint account usually requires providing each individual’s Social Security Number, income information, and address. This shared legal responsibility means that if one party fails to make payments, the other party is fully responsible for the entire outstanding balance. Due to the high level of shared liability and income requirements, joint accounts are generally not the most practical option for minors to begin building credit.

Applying for a Young Adult’s First Card

When a young adult reaches 18 years of age, they become eligible to apply for their own primary credit card account. Common entry points for first-time applicants often include student credit cards, designed for those in higher education, or secured credit cards, which require a cash deposit that typically acts as the credit limit. The application process generally involves providing personal details such as full name, current address, date of birth, and Social Security Number. Applicants must also disclose their income information and employment status, as lenders assess their ability to repay borrowed funds.

Applications can be submitted through online portals or in person at a bank branch. For parents seeking to add a child as an authorized user, the procedural steps typically involve logging into their online banking account and selecting the option to add an authorized user. Some issuers may require a phone call to customer service or the submission of a specific form.

Building Credit History for Young Users

Establishing a credit history for young users primarily involves the consistent and responsible use of credit. Credit bureaus, such as Experian, Equifax, and TransUnion, collect information on credit accounts and payment behaviors. This data is compiled into credit reports, which form the basis for credit scores. The most significant factors influencing a credit score include payment history, emphasizing the importance of making all payments on time, and credit utilization, which refers to the amount of credit used compared to the total available credit.

For young individuals, especially those added as authorized users, their credit activity may be reported to these bureaus, contributing to the development of their credit file. However, not all credit card issuers report authorized user activity to all credit bureaus. To build a positive credit score, consistently make payments on time and keep credit card balances low. This responsible financial behavior helps establish a strong credit foundation for future financial endeavors.