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 Discover and 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
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.
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.
New reward options for Chase card users may get them to download and use a mobile wallet app, even if they’ve been reluctant to do so before. Chase Freedom is offering 5% cash back on up to $1500 in purchases over the first quarter of 2018, when they make purchases with Chase Pay, Apple Pay, Android Pay, or Samsung Pay.
When you’re in the market for a new credit card, nabbing one with the lowest APR possible is of primary importance. So customers of Navy Federal Credit Union will be glad to hear that the APR for its Platinum and GO REWARDS credit cards have been lowered, to 6.74% and 9.74%, respectively. The change took effect June 30 and will be the ongoing rate for an unlimited period of time.
Green Dot Corporation has acquired the popular prepaid card co-founded by Russell Simmons, RushCard, for $147 million.