Getting your first credit card typically indicates a sign of maturity and increased financial responsibility, but how old do you have to be to get a credit card? It’s a question that makes sense to come up for a teenager. You’ve gotten your driver’s license, perhaps a first job, and now you’re wondering when you can get your first credit card.
Why might you want a credit card in adolescence? Besides the obvious milestone it signifies in the financial journey, building a credit history from a young age can set your credit score up for success. Taken together, payment history (whether you’ve paid on time) and length of credit history (average age of accounts) can account for up to 50% of your credit score. Credit is also required for life events like applying for student loans, purchasing a cellphone plan, and could even factor into receiving certain employment opportunities.
When Can You Get a Credit Card?
The minimum age you must be to apply for your own credit card is 18 years-old, but this comes with a couple of caveats. For one, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (or Credit CARD Act) requires that credit card applicants between the ages of 18-21 show proof of a reliable source of income to qualify for a credit card. In the absence of being able to prove your own steady income, you can still get a credit card if you have a cosigner who’s over 21 on the account. In the latter case, the cosigner would take responsibility for your debt if you can’t make payments.
How to Get a Credit Card as a Minor
To get a credit card under the age of 18, you’ll need to become an authorized user on an adult’s credit card account. Also known as credit card piggybacking, becoming an authorized user means that you will have the ability to use someone else’s credit card as a secondary account holder. Though you will receive a credit card in your name, the primary credit account holder alone bears the legal obligation to make payments on the account.
Becoming an authorized user as a minor is the best way to get an early start on your own credit history and can make it easier to qualify for your own credit card when the time comes. Assuming that the primary account holder has a long history of on-time payments, you’ll instantly gain positive credit history. Since you won’t be on the line to make payments, it’s a low risk way to start your credit from scratch.
Piggybacking on someone else’s account is only wise if the primary account holder has a great credit history and is responsible enough to make payments on time. If not, your own credit history will likely suffer before you get a chance to really affect it yourself. Additionally, because several credit card issuers do not allow the primary account holder to set limits on an authorized user’s spending, it’s important to establish ground rules to ensure that the credit card balance is paid in full month after month, no matter who uses the account.
The Bottom Line
Although you can’t apply for your own credit card until you turn 18, it can be a smart move to become an authorized user on an established credit card account as a minor to get a headstart on building your credit. The history of a responsible adult’s credit card account on your credit report could give your credit score an easy boost — potentially increasing your creditworthiness. Being more creditworthy comes in handy for the landmark occasions of growing up, whether in taking out a loan, renting your first apartment, or getting approved for an attractive credit card. Gaining credit card experience at a young age encourages financial responsibility and can give you a good chance at financial health going into adulthood.