Finding a credit card for your teenager or young adult means determining their creditworthiness, trusting them to spend responsibly and making sure both parties (parents and child) are on the same page about who’s paying the bills and what could happen — and who’s responsible — if things don’t go as planned. In short—it can be complicated. But, since a credit card is an excellent way for young adults to start building a good credit history, it’s worth exploring. Here’s what to know about choosing your teen’s first credit card:

  1. Understand Your Options
  2. Choosing the Right Credit Card for Your Teen
  3. Consider Some Alternatives

1. Understand Your Options

There are some good first credit card options for young adults. Minors (under 18 years old) cannot apply for a credit card account in their own name, but it’s important to realize that the Credit Card Accountability Responsibility and Disclosure Act of 2009 requires that people 18-21 years old show that they are independently able to repay the credit card balance — i.e., have an income. If your teen has a job, that’s great. That may make applying for their own card easier.

If not, many credit card issuers allow them to be added to an adult’s account as an authorized user. Authorized users will receive their own card with their name on it, and can use it to make purchases. Yet the primary account holder is always responsible for making all payments towards the balance of the card. You’ll want to find out if the credit card issuer reports authorized users’ activity to the major credit bureaus, because that can help your teen build a credit history.

Consult a list like the one found on NerdWallet that shows which issuers and banks report authorized users, and what bureaus they report to. If yours isn’t on that list, you may want to consider a different credit option for your teen.

Another option is to help your teen apply for their first card. There are some good deals out there for students, like the Discover it® Student Card.  Researching credit cards can be a good assignment for your teen, since so much information is readily available. 

2. Choosing the Right Card for Your Teen

Once your teen has a short list of credit cards they’re interested in, review them together. It’s important to make sure you both understand the terms (features, rewards and penalties) and eligibility requirements to help ensure that the card they apply for is the best fit for them. Then, you get to have a nice chat about the importance of making their credit card payments in full, on time, every billing statement.

Check if the issuer offers benefits like Discover’s mobile app — DirectPay allows you to set up and manage automatic bill payments, and your teen can set up text alerts to remind them when the bill is due and confirm that their automatic payment posted. Since 63 percent of people ages 15-24 prefer to access their bank on mobile apps, if your child doesn’t manage money on their phone already, they likely will soon.

3. Consider Some Alternatives

But what if your teen’s application is rejected? It’s not the end of the world. Read the adverse action letter, which is the card issuer’s detailed explanation of its rejection, to see what you and your teen can work on. Get your teen familiar with monitoring their credit report and make sure their history is accurate.

You can also look into a secured credit card, which is backed by a cash deposit you make when you open the account. This deposit then functions as the credit limit. These cards are usually easier for people with lower credit scores to qualify for, and the limitation of the amount of the deposit can be a help with budgeting. Keep an eye out for annual fees and look for a card that allows the user to transition to an unsecured card after they’ve established that they can use it responsibly (i.e., paying the bills in full, on time, every cycle). With a refundable deposit and cash back rewards, a secured card can be a good option for your teen if they don’t yet qualify for an unsecured card.

And, of course, have them do some research, then review it together to make sure the card they apply for is the best one for them.

Published February 10, 2015

Updated January 5, 2021

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