The world of credit can be very intimidating. It is something that we aren’t taught about, so it’s up to individuals to find out how credit works and how it can affect your life going forward. How old do you have to be to get a credit card? This guide will provide the answer.
The lack of education surrounding credit is something that leads a lot of people to end up in poor financial situations.
Credit cards are common. Lots of people have credit cards, and many people use these cards frequently.
When used in the correct manner, credit cards can actually be incredibly beneficial to your credit score. But when they are used incorrectly they can be really damaging.
This is the main reason why there are age restrictions attached to credit cards. So how old do you have to be to get a credit card? Keep on reading to find out!
What Is A Credit Card?
First things first, let’s quickly establish exactly what we mean by a credit card. Well, a credit card is a type of payment card, similar to a debit card. However, it is different because of where the money that you are spending comes from.
When you spend money on a debit card, that is money that you personally own, and money that is in an existing bank account.
You already own that money, no matter where it has come from (wages, gifts, etc.), the money already exists, and it can be found in the bank account attached to the debit card.
Credit cards are different because they work on the principle of debt. When you spend money on a credit card, you are not spending money that you own.
Essentially, you are paying for the products/services with money that you will need to pay back at a later date. So, to purchase the things that you are buying, you will be taking on debt.
Generally speaking, credit cards have a minimum amount that they will deduct from your attached debit card each month; this will pay back a portion of the money that you owe (plus the money that is accrued through interest).
But, you can also repay more than your monthly payments to pay off your debt early. Now that we have established what credit cards are, let’s take a look at how old you have to be to get a credit card.
How Old Do You Have To Be To Get A Credit Card?
As we mentioned earlier, there are age restrictions attached to the use of credit cards. So how old do you have to be to get a credit card?
Well in most countries across the globe, you have to be 18 to get a credit card. These countries include the United States, so to have a credit card in your own name, you must be at least 18 years old.
But your age alone isn’t the only restriction attached to getting a credit card in most States in the USA. In order to get a credit card at 18, you either need to be earning income through work, or have someone co-sign your application.
As we said earlier, for many people, credit cards are the start of a slippery slope into debt and bad credit.
Especially if you get a credit card when you are young. In order to give you a credit card, most banks and providers will require you to be earning a steady income as you will be expected to make monthly repayments.
If you are not earning a steady income, you will be able to get a credit card at age 18 with some providers on the basis that you have somebody cosign your application.
Essentially, this person is vouching for you and saying that they are willing to take on the responsibility of your payments if you fall behind.
Can I Get A Credit Card Before 18?
No, it is not possible to get your own credit card before you turn 18 years old.
As we have established, getting a credit card at age 18 isn’t that easy as more and more regulations are trying to encourage only those aged 21+ to get a credit card. So, getting a credit card before the age of 18 is impossible.
However, there are some providers that will allow those under the age of 18 to become authorized users on an existing credit card.
Most of the time, the minor will have to be legally related to the credit card holder, and they will need to be relatively close to the age of 18.
But as long as their provider offers this, and you fit the criteria, you could possibly become an authorized user on a credit card before you turn 18.
This essentially means that you can use the credit card, except it isn’t yours, so the responsibility to pay back the money you spend falls on the cardholder.
How Can A Minor Build Credit?
Most of the time, however, people will not use the “authorized user” function to give their children access to their credit cards. Instead, they will use this function to help build their child’s credit score before their child turns 18.
A lot of the time, minors turn 18 and already have a fairly poor credit rating simply because they have zero credit history.
Adding your child as an authorized user allows them to start building a credit history before they can even apply for credit. So, this will put them in a really good position credit-wise once they turn 18.
Of course, before you do this, it is best to speak to your provider, check that this is something that you are allowed to do, and so on.
Summary
In short, you typically need to be at least 18 to get a credit card. However, regulations have made it tricky to get a credit card before the age of 21, unless you are earning a steady income and have proof of this.
Thanks for reading!
As a current Mortgage Underwriter with 15 years of experience, I have seen my fair share of money-related issues. Whether that be high levels of debt, not enough credit, or simply a lack of funds - I’ve had clients who fit into these categories.
Here I will share tips, tricks, and experiences on how you can get yourself back in control of your finances.
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