A strong credit score at an early age can offer a financial head start. In fact, it might surprise you to learn that adults aged 18 to 23 have a “good” credit score of 674, based on Experian’s most recent findings.
But there’s nothing stopping a teenager from earning an even higher credit score by 18 or 19. A variety of credit cards for teens are perfect for building credit, though how and when you help your teen obtain one depends on a few factors.
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Obtaining A Credit Card For Teens Younger Than 18
There are two primary hurdles that prevent teens from obtaining their own credit cards. First, most credit cards have an age requirement of 18 years to apply. The second hurdle is income: Applicants need to provide proof of a source of income to qualify. Thankfully, there are ways to overcome these hurdles and deliver that card to your teen’s wallet.
Cosign The Card Application With Your Kid
Some providers allow you to cosign the card application with your child if they meet the minimum age requirement but don’t yet have a source of income. By cosigning your teenager’s application, you’re telling the provider that you’re good for the card debt should the account default.
If you take this route, review your teenager’s financial habits and knowledge prior to signing up, or at least that you’re in a comfortable financial position. After all, if your teenager defaults on the credit card, you’re on the hook for the payments.
The main drawback to cosigning a credit card is card choice. Of the major card providers on the market, just two allow for cosigners: Bank of America and U.S. Bank. This leaves you with a few solid card options — but no access to some of the stronger cashback, reward and travel credit cards on the market.
Add Your Kid To Your Account As An Authorized User
If your teenager is younger than 18 years, your only way to get them a credit card is to add them to a credit card account as an authorized user. This is the same technique you can use to help your younger kids build credit.
As an authorized user, your teenager gets their own copy of the credit card you apply for and can use it like normal. However, you’re responsible for all account management as the main cardholder, including card payments.
The Advantages Of Each Approach
When it comes to building credit, both approaches are equivalent: Good credit habits on either type will reflect positively on your teenager’s credit score. The only difference comes down to who manages the account. A cosigned card carries more risk for your teenager’s credit score since you won’t have the oversight offered by simply adding them as an authorized user to a credit card.
Of course, if your teenager is 18 years of age and has a provable source of income, they can simply apply for a credit card on their own. In this case, they are only limited by their existing credit score, income and their financial habits and history.
What Kind Of Credit Card Is Advantageous For A Teenager?
- Cashback credit card. These cards are simple to make the most of, particularly if it’s a flat-rate card rather than a category card. No matter what your teenager needs to purchase, they’ll earn a percentage as cash back. Reward credit cards, though valuable, require more work or better credit scores if you want to maximize their rewards.
- 0% intro APR credit card for purchases or balance transfers. Both varieties of this card can help your teenager save on interest.
- A 0% intro APR card for purchases is great for softening the upfront monetary blow dealt by school supplies, new courses, housing or other expenditures a teenager is likely to encounter.
- A 0% intro balance transfer card, on the other hand, could make sense if your teenager is already sitting on some debt and wants to pay it down without worrying about interest piling up.
- Travel cards. These are as valuable — or more valuable — than rewards cards for frequent travelers and often come with additional travel perks worth hundreds of dollars. However, the value of these cards drops dramatically if your teenager doesn’t often travel.
Should You Get A Credit Card For Teenagers?
Credit cards for teenagers can largely serve the same financial purposes they fulfill for adults, including earning rewards or saving on interest.
However, we can’t state enough the advantage of starting kids early on their credit journey. A great credit score is hard to build and easy to lose.
The sooner you can get your teenager on the path to good credit and learning strong financial habits, the better they’ll have it when they need to rely on their credit score for car loans, mortgages or other life events dependent on a great score.
About the Author
Steven Dashiell is a writer at Finder specializing in all things credit cards. With more than 300 articles under his belt, he aims to help readers embrace credit cards and maximize their rewards. Steve is studying to become a Certified Educator in Personal Finance, and is a frequent face on Finder’s YouTube channel, offering the latest in credit card hacks and advice. His expertise has been featured on numerous outlets, including U.S. News & World Report, Time, CBS, Fox Business, Lifehacker, Martha Stewart Living and more.
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