We Gave Our Sons A Credit Card At Age 12
Ruth and Daniel Raskind, who live in the Seattle area, gave their sons, Sam and Gabriel, a cellphone when they were 10 and a credit card when they turned 12. Sam got his card before flying to San Francisco to visit a friend.
I couldnt see putting him on an airplane without giving him a way to finance an emergency, Ruth told NBC News BETTER. We figured it was so much safer to send him with a credit card rather than hundreds of dollars in cash for incidentals.
The Raskinds trusted their kids to be responsible with their cards and made sure they understood when the card could be used.
If it was something that we would pay for when we were there, they could use the card when we werent there, Ruth said. Our parenting philosophy is: They’re kids and they’re going to make mistakes, but the younger they are when they make those mistakes that they learn from, the less damaging those mistakes are.
Best Credit Cards For Kids
The ideal time to put a card in your childrens wallets is in high schoolbut instead of a credit card, start them off with a debit card that deducts money directly from their bank account. Whether with a weekly allowance or a paycheck from their first jobs, theyll get used to the responsibility of carrying a card and not buying more than they can afford to pay for. Then, you can advance to a real credit card. Here are some options beyond simply making them an authorized user on one of your accounts:
You Must Be 18 Years Old To Apply For A Credit Card
You cant get a credit card until youre at least 18 years old. If youre under 18, however, you can be an authorized user on someone elses account. This can be a good option for a minor as it helps them build a credit score and history. Having a strong credit history can help a minor be eligible for better credit card options such as a rewards or travel card once theyre old enough to apply.
Heres an example of a typical teen card journey
Tweens: 1113 years old
This age range is a good time to introduce your tween to a debit or prepaid card designed for kids. These cards are a relatively safe way to teach your child how to spend responsibly. They dont accrue interest and they draw from preloaded money through a bank account or other source. These cards dont build credit however, so only rely on them until you think your kid has picked up on the fundamentals of card usage.
Teens: 1417 years old
If your teen proves theyre able to responsibly use a debit or prepaid card, consider letting them graduate to a credit card. After you add them as an authorized user, you can monitor their spending. At the same time, you can teach them how to manage credit before they get their own card.
Teens: 18+ years old
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Add A Supplementary Card
Getting a supplementary card for your partner or another member of your household can help you maximize your rewards. Plus, your statement includes an itemized list of transactions so you can keep track of how much each person is spending. Remember that you will be responsible for all transactions made by the supplementary cardholder you add to your account. To request a supplementary card, sign in to Scotia OnLine®.
Report lost or stolen cards
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Credit Card Use Before Age 18
Although minors cannot apply for a credit card account in their own name, many credit card issuers allow them to be added to an adults account as an authorized user. For example, Discover allows primary account holders to add at no charge so long as the user is at least 15 years old. This could be any family member, friend or person whom the primary cardholder trusts. will receive their own card with their name on it, and can use it to make purchases. Yet the primary account holder is always responsible for making all payments towards the balance of the card.
As older children learn about money and how to make purchases, parents can consider adding them as authorized users to their accounts as a way to begin teaching them responsible credit card use and build their credit history. For example, parents could give their children a credit card to make specific purchases, or for emergency use only.
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How Young Is Too Young For A Kid To Have A Credit Card
Kids are maturing at an earlier age these days. Its not uncommon for elementary school children to have cell phones. Some tweens and young teens, about one in six, now has a credit card. The 2019 Parents, Kids and Money Survey by T. Rowe Price shows that 17 percent of kids 8-14 years old have a credit card, up from just 4 percent in 2012. Almost as many of these kids have a checking account.
Obviously, these children are too young to apply for a credit card theyve been made an authorized user on their parents credit card account.
How these kids are paying for things is less important than what parents are teaching them about making smart money decisions.
Stuart Ritter, certified financial planner at T. Rowe Price
The idea of a child as young as 8-years-old having so much spending power in their pocket may seem absurd to some. But Stuart Ritter, a certified financial planner at T. Rowe Price, isnt surprised or alarmed by the survey findings. He says its all about knowing your son or daughter and preparing them for the responsibility of having a card, if you believe theyre ready for one.
So, if they go out and rack up hundreds or thousands of dollars of debt, you’re on the hook for that, Ritter said. So, you’ll want to keep a close eye on how they’re spending the money, until you get comfortable with what’s going on, because of the effect it can have on you.
Finding The Best Credit Card For 21 And Up
If youre 21 years old or older, you may have a better chance of getting approved for a credit card on your own, even if youre still a college student. For example, you may have had more opportunities to build your credit history, especially if you took out student loans and have already started making payments.
The primary reason, however, is that the Credit CARD Act of 2009 allows borrowers who are 21 and older to claim any income to which they have a reasonable expectation of access on a credit card application. That includes:
- Personal income
- Income from a spouse or partner
- Allowances and gifts
Does Cancelling A Credit Card Hurt Your Credit Score
Whether you have too many and want to cut back, or youre trying to limit your chances of overspending, weve probably all found ourselves in the situation of trying to decide whether or not we should cancel a . Before jumping the gun, you should first consider how doing so could affect your because it can, and not in a positive way.
- As a general rule of thumb, its better not to cancel a credit card if you dont need to particularly if its your first credit card or has a high credit limit
- Cancelling a credit card can affect your total credit limit and history, and potentially ding your credit score. It shouldnt be a spur of the moment decision
- If youre just looking to avoid an annual fee on an unused card, consider asking your bank if you can switch it to a no fee alternative instead of cancelling
- Sometimes cancelling a credit card makes sense or is necessary. By following the right steps, you can close an account without harming your credit score long-term
- Late payments or maxing out your credit card are generally far worse for your credit score when compared to just closing a credit card
About The Author And Site
In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time. My job routinely required extended work hours, complex assignments, and tight deadlines. Seeking to maintain my momentum, I wanted to chase something ambitious.
I chose to start this personal finance website as my next step, recognizing both the challenge and opportunity. I launched the site with encouragement from my wife as a means to help younger generations learn how to invest, manage and plan their money with confidence.
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Capital One Student Credit Card Suite: Best For Students
- Rewards rate: Unlimited 1 percent cash back on all purchasesboosted to 1.25 percent for the month when the card is paid on time
- Welcome offer: Earn $5 per month for 12 months on Select Streaming Subscriptions when you pay on time. *Exclusions Apply
- Annual fee: $0
- Regular APR: 26.99 percent variable
The Capital One suite of student credit cards has a number of features that accommodate students who are just starting their credit-building journey. Unlike many starter credit cards, these cards offer cash back rewards and perks based on your spending habits.
None of the cards carry an annual fee and they all give you access to credit monitoring with the Capital One CreditWise app. All cards offer an account review in as little as six months. If you use your card responsibly, you can receive an increased credit limit.
What Is A Credit Card For A Child
Why would you give a minor a credit card? Having a credit card for kids may assist them by developing healthy money habits from an early age, allowing these financial literacy skills to compound from the start.
And if you dont provide them a credit card early on with training wheels firmly attached? While certainly not always the outcome youd encounter, one of the most common mistakes encountered by young adults is accumulating costly credit card debt.
Depending on your circumstances as their family member, you might be able to manage assistance for when this happens. Though, to head this off at the pass, you want to share, practice and instill financial literacy skills with them as early as possiblebefore real money is at stake.
Kids can learn about money management through several means, though the best option is through modeled behavior. In other words, seeing you handle credit cards responsibly as an adult.
If not managed properly, credit cards can quickly spell disaster because they front a line of credit, offering buying power you might not necessarily have the means to afford.
Combine this lack of financial resources with a considerable marketing effort to attract young consumers and it spells disaster from which it could take years to recover.
This keeps the training wheels firmly attached until theyve shown enough responsibility to manage their own money prudently.
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Teaching Kids About Smart Credit Card Use
There are a few guidelines youll want to follow to make sure your kid understands responsible credit use, according to experts.
The main thing you want to teach kids is to pay your statement balance in full every month, says Grant. That way youre not only showing good activity to the credit bureaus and building good credit scores, but youre not paying interest.
You should also discuss the factors that affect a persons . Kids should understand that its healthy to always make on-time and in-full payments and to keep your balance low relative to your credit limit. Experts suggest a debt to income ratio of no more than 30%, meaning dont spend more than 30% of your allotted credit.
Finally, create a budget and a couple of savings goals with your child. They should understand that whatever they dont spend now, they can save for later. They should also understand that money is earned, so tie at least a portion of their allowance to chores they are responsible for.
Discover It Student Cash Back
The Discover it® Student Cash Back Card is one of the best student credit cards available. It offers 5% back on rotating bonus categories, which often include retailers like Amazon.com or places like restaurants and grocery stores. Teens can also earn 1% back on all other purchases, and Discover will match the cash back earnings from their first year as a cardholder. Rewards can be redeemed in any amount, theres no annual fee, and 6 months 0% APR on new purchases .
If your teen is still under 18, consider applying for one of the best cash back credit cards and adding them as an authorized user.
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If Your Child Is Under The Age Of 1:
For younger children, a parent or guardian must contact the credit bureaus by mail and provide certain identifying information to see if a credit report exists in the minor’s name. Each of the three credit bureaus have different requirements, so be sure to contact them to find out more about the information you may need to provide to check if your underage child has a credit report.
At What Age Should I Get A Credit Card
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You have to be at least 18 years old to apply for a credit card in the U.S., but if youre under 21, it may be difficult to get approved. Federal law limits credit card issuers abilities to approve young adults for credit cards. Specifically, the requires all applicants under 21 to prove adequate full-time income.
Even if you’re of age and can qualify for a credit card, that doesn’t necessarily mean you should get one. Credit building is important, but you need to be ready for the responsibility that comes with being a cardholder. Paying your bill on time and in full every month without neglecting other financial responsibilities is essential. Ideally, youll make enough to cover your regular bills, credit card expenses, any other debts and savings, too.
But if you’re 18 or older and responsible with money, then a credit card may be worth exploring. Here’s what you need to know.
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Getting A Credit Card After 21
If youve already turned 21 years old, then your ability to get a credit card depends on your credit history and profile. But if you just turned 21 and dont have steady income, you probably have a limited credit history.
However, length of credit history is just one of the factors considered when credit card issuers look at your application. Two of the most important factors to your credit scores are your payment history and the amounts you currently owe to lenders. If there are missed payments and outstanding balances on your reports, your credit might not be strong enough to qualify for the card you want.
Regardless of your credit history, there may be a credit card out there that fits your needs. Many credit cards are aimed specifically at borrowers with limited credit profiles, so the key is to do the proper research to find the right one for you.
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Opensky Secured Visa Credit Card: Best For No Credit Check
- Rewards: None
The OpenSky Secured Visa Credit Card does not require a credit check, so it is an excellent option for those with little or even poor credit history. As a secured credit card it requires a cash deposit to get started, but you can get up to a $3,000 line of credit. The OpenSky Secured card helps build your credit score by reporting your payments to the three major credit bureaus. That said, if you already have a fair credit history, you may want to consider other secured cards, because of the $35 annual fee and lack of rewards.
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How To Get Your First Credit Card
Now, you’re probably thinking how can I build a credit history if no one will let me have a credit card? But worry not, because there are options for getting a card when you’re on the young side.
First, you can go the authorized-user route and get added to someone elses card. Another option is to apply for a credit card with a cosigner. Ideally, that person should be someone with stellar credit, because if thats the case, you’ll likely get approved based on his or her record.
Of course, finding a cosigner is easier said than done, because that person effectively takes responsibility for making sure your charges are paid in full. Some typical candidates for a cosigner might include a parent, aunt, uncle, or older sibling.
If your attempts to get a credit card at a young age aren’t fruitful, another option you might look into is getting a secured credit card. With a secured credit card, you put up a cash deposit as collateral, and then you’re allowed to charge purchases up to the amount youve put down. Secured credit cards don’t give you a line of credit the same way regular credit cards do, but they do allow you to build a credit history so that you’re eligible for a traditional credit card in the future.
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