Your Child as an Authorized Credit Card User: Yes or No?
A recent CreditCards.com poll showed that 6 million or 8% of parents in the U.S. have at least one child using a credit card. Of course, children can’t apply for their own credit card until they turn at least 18, but most issuers allow to add them to their parents’ card accounts as authorized users.
The most common reason for giving a minor child a credit card is the parents’ wish to teach them how to manage finances. On the one hand, this move can make little cardholders more responsible. On the other hand, children are still children and can sometimes make surprise purchases marring your credit.
When It’s Time to Give Your Child a Credit Card?
First, you need to find out whether your credit card issuer allows to add children as authorized users and from what age. For example, Capital One, Chase, Citi and Wells Fargo require no minimum age. So, you can add your minor to these banks’ credit card accounts whenever you decide the time is ripe.
Some other issuers do not forbid authorized teen users as well but determine a minimum allowable age. Thus, American Express and Barclays require authorized users to reach the age of 13 while US Bank demand them to be not younger than 15.
Will it Help Build Your Child’s Credit History?
Once you let your child use your credit card account, you should concern yourself not only with your own but also with their credit score. Whether it will be affected depends on the card issuer who does or does not report to credit bureaus in the child’s own name. Make sure to inquire about this process.
Apart from that, credit bureaus do their bit as well. For example, TransUnion does not provide credit history for children under 16 and Experian creates a credit history if the reported user is 18.
Moreover, remember that such an undertaking can even be damaging if your account is not in good standing. In this case, your bad credit tends to be inherited to your child.
Authorized User: Yes or No?
Forbidden fruit is sweet. According to the mentioned above survey, 21% of parents holding credit cards caught their children at using them in an underhand way at least once. So, perhaps, banning is not the best idea.
Giving your child a credit card is a good chance for them to learn financial literacy and start building a credit history. But always keep abreast and do not forget to monitor spending as it may have a bad influence on both your and your child’s credit.
Latest No / Limited Credit Card News
In the run-up to the new academic year, Capital One recently added two decent products to their line-up of student credit cards, giving college students more opportunities to build credit and earn valuable rewards at the same time: the Capital One SavorOne Student Cash Rewards Credit Card and the Capital One Quicksilver Student Cash Rewards Credit Card. Two new cards are student versions of their rewards counterparts: the Capital […]
So far, no one can say for sure when the coronavirus pandemic will end. To assess the current financial situation of Americans, CreditCards.com has recently conducted two surveys of credit card debt during the COVID-19 outbreak. The surveys were conducted in March and April with over 2,000 U.S. adult respondents. Here are the key findings: […]
The wedding season is coming up—meaning brides and grooms-to-be are busy tasting wedding cakes, refining guest lists, and booking photographers. But there’s something else they should add to their to-do list, financial advisors warn.
Webbank, a state-chartered industrial bank headquartered in Salt Lake City, Utah, has just introduced the enhanced cash back for its . Starting December 19, all Petal cardholders who use the Petal mobile app can notice new special offers. These deals are supposed to give cardmembers access to up to 10% cash back with eligible merchants […]
They say knowledge is power. And in the case of credit scores, it seems to be true.
A recent survey by the Consumer Federation of America (CFA) and VantageScore Solutions, LLC, found that people who had recently gained access to their credit score knew more about how credit scores are calculated than those who are unaware of their scores.
