Tuesday, March 28, 2023

How To Get Credit Card For Teenager

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What If I Can’t Be An Authorized User

How to get a credit card as a teenager

Young people 18 years of age and older who can’t become an authorized user on a credit card may qualify for two other options in their own names:

  • Student credit cards are designed for college students just starting to build credit. A credit check and earned income are required to qualify for student cards most also require college enrollment. Student cards may offer benefits such as low introductory APRs, travel rewards or cash back.
  • Secured credit cards require a refundable security deposit, which typically establishes the card’s credit limit. The issuer keeps the deposit if the cardholder stops making payments, making card issuers more willing to extend credit to those with no credit history. Aside from the deposit, secured credit cards work just like any other credit card. Used responsibly, secured credit cards can help you build your credit history.

Best Prepaid Cards To Teach Teens About Finances

If the idea of handing your teenager an actual line of credit is scarier than teaching them to drive, then a prepaid card may be the way to go. Prepaid cards that operate on a credit card network think Visa, Mastercard, Discover, or American Express can be used to make purchases anywhere that network is accepted, just like a credit card.

Unlike a credit card, however, prepaid cards are just that: prepaid. You can load money onto the card, and its those funds that are used to make purchases. Once the funds run out, more money can be loaded to continue making purchases. Many prepaid cards, like our expert-rated picks below, also accept direct deposits.

Variable Monthly Fee Not applicable

Since prepaid cards arent associated with a line of credit, they wont help establish or build your teens credit history which can be both good and bad. On the one hand, your teen wont be building good credit with their good financial behaviors on the other hand, your teen wont be building bad credit when they make the mistakes.

While prepaid cards wont build credit, they can be used to help build good credit behaviors. You should have your teen budget and track their card purchases to learn how to spend wisely. You may even consider having them make regular monthly payments on the same day each month to reload the card, which can help instill the on-time payment habits they will need with a credit card later in life.

Which Card Issuers Allow Authorized Users

Each of these card issuers allows authorized users under 21 years old, though the minimum age varies. These issuers also report authorized user activity to credit bureaus, which can help the authorized user build a healthy credit score and history.


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Opening A Credit Card For A Minor

Teenagers and Credit Cards

If your teen is under 18, they wont usually be allowed tohave their own credit card. And even after they turn 18, it may be difficultfor them to qualify for a credit card on their own.

But that doesnt mean they cant begin to build credit.There are two main ways to get credit cards for teens.

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Authorized User On An Existing Account

Some credit card companies will allow authorized users as young as 13 years old. An authorized user has access to the credit card account but is not the primary cardholder. Authorized users will have a separate card that is attached to the primary credit cardholders account.

Before agreeing to add someone to your account as an authorized user, remember that their credit usage will impact your credit history and score. You will be responsible for anything that is charged to your account by an authorized user.

When I was in high school, my parents made me an authorized user on their account to have access to credit in case of an emergency when traveling on school trips. Thankfully I never had to use the card, but it was good to know that it was there.

They Have The Means To Pay Off The Bills

If your teen is already making money from part-time jobs or side gigs, you can have them cover their expenses that appear in your monthly statement. That way, theyll learn how to budget and set aside money for recurring financial obligations, such as credit card bills. This will also encourage them to curb their credit card expenses since they dont want any significant deductions from their monthly salary.

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Best Store Cards For Students

Weve all encountered them: the big signs, the big promises, and the big discounts yes, were talking about co-branded store credit cards. These common retail payment cards are popular with brand loyalists who want to save at their favorite stores, but theyre also commonly considered to be easy ways to build credit.

Thats because store credit cards especially the closed-loop cards without a network logo are among the easiest credit products to obtain.

The thing to watch out for is that store cards are easy to get for a number of key reasons, chief of which are the high APRs and low credit limits. So long as you pay in full each month and use the card responsibly, however, a store card may be a good fit for student credit building.

Where many store cards offer rewards similar to rebates, the Target REDcard offers a simple 5% discount that applies to your purchase at the register or check-out screen.

  • Get 5% off your total purchase at checkout for eligible in-store or online Target purchases
  • Receive exclusive deals & discounts
  • Pay $0 annual fee

Cardholders will also receive exclusive deals and discounts, as well as experience free two-day shipping on eligible online purchases and extended returns on qualifying transactions. The REDcard isnt specifically for students, but it has been known to approve a wide range of credit types, including bad credit.

Sign Up For A Secured Credit Card

Best Credit Cards For Teenagers | How to Build Credit Under 18

Secured credit cards, like credit-builder loans, help consumers move their credit in a positive direction. When a person opens a secured card, they make a small deposit that serves as collateral and effectively becomes their credit limit. Before committing to a secured credit card, be sure to do research on the types of fees, annual fees and/or interest rates that may come with the card. You should also confirm that the secured credit card you’d like to use reports activity to the credit bureaus since there may be some secured cards that do not.

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Consider What Your Teen Might Need From A Credit Card

When thinking about which authorized user card to get for your teen, itâs a good idea to think about the kinds of situations that might require assistance a credit card can provide. For instance, roadside assistance came in handy when my son ran down our car battery charging his cell phone. His Chase Sapphire Reserve® authorized user card came to the rescue with its roadside assistance benefit and it was less than 40 minutes from the âclickâ of a dead battery to the âvroomâ of a ready-to-go engine.

Another example: If a study abroad or foreign gap year is in your teenâs future , youâll want to make sure your child is carrying a credit card without foreign transaction fees. Many no annual fee cards have pesky foreign transaction fees that can add up to 3% to the cost of every single purchase overseas.

How To Establish Credit For Your Child

Building credit for your child will help them establish a positive credit history and empower them to borrow for big purchases later in life.

The good news is your child doesn’t have to be 18 to start building credit. Get on the path to establishing credit for your child and help them secure a strong financial future.

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Bank Of America Travel Rewards Credit Card For Students

  • Intro 0% APR for 15 billing cycles on purchases, then 14.24%-24.24% variable APR
  • $0 annual fee

The Bank of America® Travel Rewards Credit Card for Students lets cardholders earn earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time and no expiration on points. In addition, the $0 annual fee card offers 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days of your account opening.

The card offers an intro APR of 0% Introductory APR for the first 15 Statement Closing Dates following the opening of your account.. After that, a regular variable APR of 15.49% to 25.49% variable applies.

The Bank of America® Travel Rewards Credit Card for Students could be a good for students who travel. The card offers points on every purchase, which can be redeemed for statement credit to pay for flights, hotels, vacation packages, cruises, rental cars or baggage fees.

The card also charge 0% foreign transaction fees. This means you wont incur additional fees when you use your Bank of America® Travel Rewards Credit Card for Students outside of the U.S.

Additional Bank of America® Travel Rewards Credit Card for Students benefits:

  • Better Money Habits® tools
  • Access to your FICO Score

About the card

The card offers an intro APR of 0% Introductory APR for the first 15 Statement Closing Dates following the opening of your account.. After that, a regular variable APR of 15.49% to 25.49% variable applies.

Card Benefits

Reasons Your Teen Should Get A Credit Card

15 Best Credit Cards for Teens (2021)

You might think your teen is far too young to use a credit card. But youll find two big reasons why it could be a good idea for them to have one.

1. It can teach your teen how to use a credit card responsibly for the future.

After adding your teen as an authorized user, you have control over their account and can see how they use their card. With insight into their spending, you can more effectively teach them solid financial habits. Its better for them to learn from you now than figure everything out on their own later.

2. It can help your teen build credit early.

Most people start with a brand-new credit history when theyre ready to get a credit card. This usually means theyre limited to student cards and secured cards, both of which typically come with limited features. You can help your teen build an impressive credit history before they reach adulthood. Just add them as an authorized user on your account and consistently make payments on time. When they turn 18, their credit may be strong enough to expand their card options considerably.

3. Its convenient for parents and kids.

Sometimes you could forget to give your kid cash for meals at school, transportation or supplies. Getting your kid a credit card can help you avoid unpleasant situations and avoid cash theft. And for some cards, you can set spending limits to ensure your child doesnt spend over their budget.

4. You can earn more rewards.

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Pouncing On The College Prey

Anyone visiting a college campus in recent years has been shocked at the aggressive and senseless marketing of credit cards to people who don’t have jobs. The results can be devastating. Recently, two college students in Oklahoma gave up on their credit card debt and committed suicide with the bills lying on the bed beside them.

Vince called my radio show with a problem that has become a trend. Vince signed up for multiple cards during his sophomore year at college to get the free campus t-shirt. He wasn’t going to use the cards unless there was an emergency, but there was an “emergency” every week, and soon he was $15,000 in debt. He couldn’t make the payments, so he quit school to get a job. The problem was, without his degree, his earnings were minimal. Worse than that, he also had $27,000 in student loans. Student loans aren’t payable while you are in school, but when you leave school by graduating or quitting, the payments begin.

Vince was one scared 21-year-old with $42,000 in debt but making only $15,000 per year. What’s scary is that Vince is “normal.” The American Bankruptcy Institute reveals that 19% of the people who filed for bankruptcy last year were college students. That means one in five bankruptcy filings were by very young people who started their lives as financial failures. Do you still think it is wise to give a teen a card? I hope not.

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Ramsey Solutions

Deserve Edu Mastercard For Students

The Deserve® EDU Mastercard for Students offers 1% unlimited cash back on all purchases. It also offers reimbursement for one year of Amazon Student Prime membership .

The Deserve® EDU Mastercard for Students comes with a $0 annual fee and an ongoing APR of 20.24% variable. As for foreign transaction fees there are none.

The Deserve® EDU Mastercard for Students is a great financial tool for international students studying at U.S. colleges.

While most credit cards require a Social Security number to apply, international students can apply for the Deserve® EDU Mastercard for Students without one. Just know, if youre an international student studying in the U.S., youll need to add your SSN to have the most accurate information presented on your credit report.

Additional Deserve® EDU Mastercard for Students benefits:

  • Cellphone protection
  • Mastercard Platinum benefits

About the card

The Deserve® EDU Mastercard for Students offers 1% unlimited cash back on all purchases. It also offers reimbursement for one year of Amazon Student Prime membership .

The Deserve® EDU Mastercard for Students comes with a $0 annual fee and an ongoing APR of 20.24% variable. As for foreign transaction fees there are none.

Who’s This Card Best For?

The Deserve® EDU Mastercard for Students is a great financial tool for international students studying at U.S. colleges.

Card Benefits

Additional Deserve® EDU Mastercard for Students benefits:

  • Cellphone protection

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Should I Get My Child A Debit Card

Financial literacy begins surprisingly early. Most children recognize the value of money by age 7, according to a University of Cambridge study, including how it is earned and exchanged for goods. The study also found that although kids grasp basic money concepts at a young age, they’re still processing the difference between luxuries and necessities.

Opening a prepaid debit card in your child’s name gives them an opportunity for hands-on experience under your guidance. Younger kids will do well with a prepaid debit card older kids may be ready for an entry-level checking account with debit capabilities. Either way, as the custodian, you’ll need to open an account on their behalf and link it to your bank account. Afterward, you can transfer money to their card. Most cards and accounts feature modern tools to help you instill positive money habits, including:

  • Tracking how and when your child spends their money
  • Assigning and rewarding completed chores with a debited allowance
  • Saving and investing tools that suggest ways to grow their earnings

Citi Double Cash Card

How to Get a Debit Card as a KID / TEENAGER (2021)

Selected as One of the Best Credit Cards for Young Adults in Terms of Cash Back Offers

The Citi® Double Cash Card offers students and new credit users a 2% cash back reward earned as follows 1% earned at purchase with the 2nd-1% awarded when the purchases are paid. Note, however, the Double Cash card has no limits at all. The Citi® Double Cash Card is also budget-friendly, which fits most teenagers budgets, with no annual fees and a generous balance transfer option that offers an Annual Percentage Rate of 0% for 18 months. .

The Citi® Double Cash Card offers significant security, fraud, and identity theft protection with a $0 liability for fraudulent transactions and a guaranteed replacement card within 24 hours, plus emergency cash, if applicable. The Citi® Double Cash Cards simplicity with no rotating categories to juggle each month or quarter is an ideal card for young adults. Cardholders can redeem earned rewards by direct deposit, check, or a statement credit. However, the cash back can be converted to ThankYou points as well .

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Does Your Child Have A Credit Score

Typically, only people over the age of 18 have a credit score but it is possible for minors to have a credit report. A person under 18 can have a credit report if:

  • Their identity was stolen and used to open one or more credit accounts.
  • A credit agency erroneously created a credit profile in the minor’s name.
  • An adult added the minor as an authorized user or opened a joint account in the minor’s name.

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