Young adults often ask what the right age to get a credit card is. They are anxious to gain financial freedom from their parents, and they want to start building their credit history to make it easier to get loans later on.
One must be 18 years old to apply for a credit card in the United States, but there is no minimum age for an authorized user. While one can apply at 18, it can be difficult to get approval. U.S. Federal law states that the applicant has to have an independent income or a co-signer, but this doesn’t mean that they don’t have options.
The best credit card option for anyone under 18 years of age is to become an authorized user. With authorization to use a parent’s credit card, they can gain experience using credit before their own financial reputation is put to the test.
As long as the parent has a good credit history, this can be beneficial. It helps them build a solid foundation for their own credit history, and it could lead to them getting a better deal on their own credit card one day.
18 to 21
Credit card options for those aged 18 to 21 are limited. This is due to this age group’s limited income and limited credit history. According to the experts at SoFi, “If you’re between the ages of 18 and 20, you may encounter stricter verification requirements, including showing proof of ability to repay, such as through income, or getting a cosigner.”
There are some forms of credit cards that are designed with this age group in mind, including student, secured, and starter cards. Student credit cards are available to college students. Credit card companies see students as having the potential to earn above-average incomes, so they offer attractive terms.
Students’ credit cards have low or no annual fees. This gives young adults a way to build a good credit history inexpensively. Building credit is important at this age. Those in this age group that don’t have an income can ask a parent to cosign on their application. This gives the credit card company a secondary payment source. Not all credit card companies offer this option, and approval depends heavily on the co signer’s credit standing.
Many adults wonder if there is an age cap when it comes to applying for a credit card. The answer is a straightforward no. Denying someone the ability to apply for a credit card as a senior citizen is considered age discrimination. By the time an individual reaches their golden years, they should have a good credit history behind them and be able to easily get approval.
Parents can help a child at any age build their credit history by making them an authorized user of their own credit cards. After the age of 18, co-signing for them will help, but it is easiest to get approved for a credit card after the age of 21.