Should My Child Get a Credit Card?

Can You Open a Credit Card for Your Child?

If your child is under age 18, they’re not old enough to open a credit card on their own. However, you can make them an authorized user on one of your credit cards, possibly as early as age 13. As an authorized user, your child will receive a credit card linked to your account. They can use the card for purchases, but you’re responsible for payments. You maintain control of the account, making it an excellent way to teach your child financial responsibility with less risk.

Choose one of your cards that regularly carries a low or no balance (low credit utilization can help build credit) and a long, positive credit history. Contact your card issuer to confirm that the authorized-user account will be reported to all three consumer credit bureaus (Experian, TransUnion and Equifax) for the greatest benefit.

Learn more >> Ways to Teach Kids About Money

Pros and Cons of Getting a Credit Card for Your Child

When you’re deciding whether to get a credit card for your child, it’s important to weigh the benefits and drawbacks.

Pros

• Build a credit history: By becoming an authorized user, your child can start building a credit history early. This can help them qualify for better terms on credit cards, loans and rental applications in the future.
• Built-in protections: Credit cards often come with great benefits that can protect your child’s spending: zero liability fraud protection, purchase protection and extended warranty to name a few.
• Learn financial responsibility: Access to a credit card is a chance for your child to learn skills like budgeting, tracking expenses and responsible spending habits. Regular conversations about spending can reinforce these good habits.
• Emergency use: A credit card provides your child with access to funds in emergencies, like unexpected school expenses, travel issues or other urgent needs.
• Earn rewards: By making your child an authorized user on a rewards credit card, their spending contributes to earning rewards such as cash back, points or miles. These rewards can offset spending or help with an upcoming family vacation.

Cons

• Risk of overspending: Your child may see a credit card as free money. To prevent overspending, your card issuer may let you set a spending limit for authorized users. If your goal is only to start building your child’s credit, you don’t have to give them access to a physical credit card.
• You become their creditor: As the primary cardholder, you’re responsible for charges your child makes. It’s important to lay down the rules for use, set a clear budget and monitor their spending.
• Impact on your credit: If your child overspends and makes it difficult for you to pay your credit card bill, it can negatively affect your credit score. Review your child’s activity regularly so you can catch issues early.
• Impact to your child’s credit: If the authorized-user account is reported to the credit bureaus, your credit mistakes could hurt your child’s credit score. Maxing out the card, for instance, could negatively impact their credit.

Learn more >> How to Use a Credit Card Responsibly

Minimum Age Requirements for a Credit Card

While your child can’t legally get a credit card on their own until they’re age 18, they can become an authorized user on your account before that. The minimum age for an authorized user varies by card issuer. Some card issuers require authorized users to be at least age 13, while others don’t set a minimum age. Be sure to check with your card issuer for their specific policy.

How to Teach Your Child Good Credit Habits

Allowing your child to access a credit card is just the beginning. Helping them develop good credit habits sets them up for lifelong success.

• Start with credit basics. Explain how credit cards work, including borrowing money and paying it back—sometimes with interest. Teach the key differences between using a credit card and a debit card for purchases.
• Be a good example. Practice responsible credit use yourself. Include your child in your decision-making processes, such as explaining why you chose a certain credit card for a purchase and how you’ll pay the amount back.
• Set clear rules. Set clear spending limits and decide what the card can be used for, such as gas or school supplies. Discuss whether your child will contribute to payments, especially if they have a part-time job or receive an allowance.
• Monitor credit card use. Review your billing statement with your child to discuss their spending. This is a good teaching moment to explain why it’s important to pay on time and in full.
• Increase responsibility over time. As your child proves they can handle a credit card responsibly, consider increasing their spending limit or giving them more independence.

Learn more >> How to Teach Your Kids to Use a Credit Card

The Bottom Line

Getting a credit card for your child can give them a head start on learning to manage money and credit. For younger teens, that usually means adding them as an authorized user on one of your existing credit cards. They can gain experience, while you keep control over the account.

Part of encouraging good credit habits includes protecting your child’s identity. Consider enrolling in a family identity protection plan to monitor your family’s credit. This way, you can safeguard your loved ones’ personal and financial information.