Credit Card Age

[runewell]

My dad co-signed for me to have a credit card at age 16. I made purchases very occasionally and paid them off. I think that was a smart idea, establishing credit adn responsibility early.

What say ye?

[whoisjohngalt]

I like credit cards and hopefully will be able to teach my kids how to use them responsibly.

Lena

[Deleted]

I'd say... good for you???

[Sum Dum Gai]

I say the kids can establish their credit on their own. Piggybacking off of my wife and I probably ain't happening. The thing is, young people don't really need good credit. Most of them have years before they buy a house, start a business, etc. The slightly lower car insurance rates they'd get for having good credit are more than eaten up by the massively larger premiums they have for being young anyway. I just don't buy the hype that everyone needs a 700+ FICO score by their 21st birthday. I could see where it would be useful for getting a car, but most young people buy more car than they need anyway, so do we really want them to be able to finance a Lexus the day after they graduate from school, before they've even started looking for a job?

[Deleted]

I'm glad it worked for you; your parents must have trusted you to use the cards wisely instead of buying rounds for your friends and tickets to Ft. Lauderdale for Spring break.

I do think credit can be built up gradually on your own. DS is 26 and has managed to buy a house with a mortgage and never used my credit rating in the process. He;s also never financed a car and claims he never uses credit cards. He did have a good, steady job that paid reasonably in comparison to the mortgage, and a 10% down payment.

Can you still piggyback off someone else's credit? I know they can put you on as an Authorized User but that doesn't do anything for your credit rating because you're not liable. I'd heard the banks no longer allowed co-borrowers because it got abused. People were being persuaded to add perfect strangers to their ccs in exchange for a payment. The stranger never actually got the credit card, just a boost in their rating.

[lynnerself]

Both of my children got "student" credit cards in college. With low ($1500) limits and no co signers.
It was a good way to start. They may have made a few late payments, but I don't track it, they are grownups. I do know that they don't carry a balance. So far neither have applied for any other loans, so no idea if it is helping their credit.
They use them mostly for on line purchases, or for things that I will be reimbursing them for later.

[rumples]

I'm with Dark Honor on this one. DN can establish his own credit in his own time.

[msgumby]

My dad added me as an authorized user to his card when I was about 15 or 16. It was for emergencies only, and I never used the card once. When I went off to college, I got a card of my own through the local credit union. I had it sent to my permanent address because I moved around a lot in college and didn't want to miss bills or payments. Whenever a bill came, my dad will tell me the balance, and I would transfer the money to our joint account to have the bill payed. It wasn't until my early to mid 20s that I even realized that you didn't have to pay the full balance on credit cards. I just thought they were used so you wouldn't have to carry around piles of cash, and the company would send you a bill for what you spent at the end of the month. I was apparently quite naive. However, I was also very responsible with what little money I did have, and I never spent money that I didn't already have in my account. Not all kids are responsible with credit cards, so you really have to decide based on the personality of your children.

[crockpottin]

Runewell, I had the same situation as you, I also got a very low limit (I think about $300) card not long after I got my first job at 16. I used it mostly for the occasional mall trip or meal out with friends, and I was always careful to pay it off each month I used it. I'm glad that I had the opportunity to build credit early and to learn how credit cards work. All that being said, I've always been on the frugal side, so I think my parents knew I was a pretty safe bet when it came to managing the card. I don't know if they would have co-signed if I was more of a spendthrift.

[isabella]

I opened a dedicated CC account for this purpose and added DS as authorized user at age 14. In the beginning I was very active in helping and guiding him as he was learning the process with the CC and checking account to do on line bill pay. So far he has done a great job of handling the responsibility, keeping track of spending and to date has not overspent, nor paid any interest charges. He uses this CC for purchases, annual billing for on line gaming memberships, on line purchases. DS is almost 17 yrs old now and very responsible handling his money.

eta... I did this for my son to learn money management, credit scores never entered my mind at the time. I had always heard those horror stories of kids going to college and getting CC's for the free t-shirts, pizza (whatever) and then getting themselves into financial trouble. I wanted to teach him to avoid to getting caught up in that trap.

[sapphire12]

I got a low limit Citibank Visa ($500) when I was a junior in college, so all of 19. My father suggested I get the card, but he didn't cosign on it. Really, most don't need spectacular credit at 21. I was approved shortly after graduation for my car loan. I was responsible with my credit card. Since then I've had about 33 credit cards total, not all at once. Played the games to get free air tickets, then ditched the card. Now, I have just two credit cards and have no desire to ever get any others, unless Pen Fed ditches the 5% cash back or I move where I didn't have to commute.

[alabamagal]

DD in college has a credit card, $500 limit. She has had for 2 years, but got it just before the new credit card regulations went into affect. She uses it a lot, but pays it off (mostly) before she gets charged interest. I feel good about her having it. Even though it is in her name only, I have access to her online account so I can see what she is spending, since we are both jiontly paying for college expenses. So far she has been very good about not spending a lot of money.

DS in college can not get one unless I sign for it (Thank you new cc regulations!). I probably will for a very low limit. He is 3 hours away at college, uses his debit card for everything, but I worry about him losing it and needing to get food (he never has cash on hand!).

[Deleted]

After I wrote my response yesterday, I remembered that I DID get DS a card early on- Capital One sent an offer for one when he was 17 and we were just about to send him off to a summer program at the U. of MD for 3 weeks. It had a pretty low limit- maybe $300. It turned out to be a good decision. DS called a few days later and didn't like the program, was wretchedly unhappy, wanted to come home, etc. I was out of town on business and DH (then DF) had already made the 8-hour round trip to get DS there from NJ a few days before.

I told DS he could come home if he could find his own way home, since Amtrak was a good option and I knew DS was pretty good with travel and directions. He used the credit card to get the train ticket. He later admitted he'd decided from Day 1 that he wasn't going to make it work and that it was actually a pretty good program. The joys of raising adolescents.

[spartan7886]

My parents added me as an authorized user on their credit card when I turned 16 with the understanding that it was only to be used for gas (I had an hour round trip to school and they didn't run buses after sports practice) and when they sent me on errands. At 24, I'm still on it, but the physical card goes to my parents' address, so I don't ever spend on it. The high limit just helps my credit.

I got my first credit card I had to pay for when I left for college. Never paid interest, although I did lose the bill and pay 3 days late once.

[Deleted]

I don't know exactly how my parents handled it. I know that I had a credit card around the age of 16, but I don't know if it was mine or if my parents co-signed or if I was just an authorized user.

I do think it is a good idea for a kid to have and use a credit card while they are still at home with their parents. That way the parents can monitor and help the kid learn to use credit responsibly.

[kimber45]

DS signed up for one in college to get a gift certificate for a free meal. To this day he hasn't used it (the credit card that is). He pays cash or uses his debit card for everything.

[qofcc]

I got my first card (American Express) when I was 17 and a freshman in college, then a Visa from the local bank when I turned 18. I think they both had limits around $200-500 that was a long time ago.

When my kids started driving, I added them as authorized users on my credit card for emergencies and for MY convenience so they could run errands for me, go to the grocery store, put gas in the car, etc. without having to keep extra cash on hand. The deal was that they ask before using the card, give me the receipt afterward and I'd check the monthly statement to make sure there were no unauthorized charges. When my daughter applied for her first apartment lease, they ran her credit and it turns out she had a 700 credit score just for being an authorized user on my account. She got her first card on her own with a $300 limit when she turned 18.

[❤ mollymouser ❤]

I got my first credit card (a department store where I was working) when I was 18 years old. Within 10 years, I had a dozen credit cards and a whole lotta credit card debt ~ because no one taught me about the responsible use of credit cards. Once I realized what a hole I'd dug for myself, I had $15,000 in credit card debt (plus a car loan, whopping student loans, and a mortgage) and it took me 5 years to pay off those credit cards. I haven't carried a balance on a credit card since.

[msgumby]

kimber45's post reminded me of my husband's first credit card. He went to college at 16 and signed up for some credit card to get a free shirt. He "never got the card" (meaning he probably accidently threw it out) and forgot about it. A few years ago, I pulled both of our credit reports, and found this old credit card on it. It took him a while to remember that he had signed up for the card, and I was amazed that it was still an active account (never used in almost 10 years). They had also upped his credit limit over the years.

[telephus44]

When I went to college, my mom added me as an authorized user to one of hers for emergencies. I used it twice (once for an ethernet card and the other time for a moniter - I always used hand me down computers and they occasionally need fixing) and both times called my mom before using it to let her know. When I was a sophomore in college, I applied for my own card in my own name, on my dad's suggestion to help build my credit score. I still have (and use) it 12 years later. I've paid interest on it only once (and that was planned). I think a lot of it has to do with personality - I've always been a saver and good with my money. What we do when DS gets older will depend on his personality and how he handles money.

[illinicheme]

My parents added me as an authorized user to their credit card at some point while I was in high school. There was never any question of using it for something not pre-approved by them, and there was never any question of forgetting to put the receipt in the receipt drawer in my dad's desk. I don't remember exactly how they explained credit cards, but they must have at some point, because I can't remember a time when I didn't understand exactly how they worked.

They must have helped me get my own credit card right around the time I went to college? I never signed up for anything while at college, so I must have had my Discover and Visa already by the time I got there.

[azphx1972]

My parents didn't really use credit cards when I grew up, so I got my first one on my own when I was in college. Luckily I was somehow responsible enough to use it only for convenience, and not to cover spending shortfalls.

Would I co-sign for a minor? Probably not, unless he/she has proven himself/herself extremely responsible with money.