Many 18-year-olds look forward to getting a credit card. However, getting a credit card at 18 is a lot harder today than it was in the past. The Credit Card Act of 2009 prevents people who are under the age of 21 from getting a credit card if they do not have any independent income. If your child does not use a credit card responsibly, then it can strain their finances.
Amy Irvine is a certified financial planner. She recommends that parents avoid giving their children a credit card without some ground rules. She also recommends that parents add their children as an authorized user to their credit card. An authorized user is another person who can use your credit card. If the bill is paid on time, then the authorized user’s credit score will also increase. Keep in mind since you are the primary card holder, you will be responsible for paying any debt.
You can also co-sign on a student credit card. If you co-sign on the credit card, then both of you will be responsible for making sure that payments are made on time. A secured credit card is another option that your child has. A secured credit card requires that one make a deposit before they use it. The limit will usually equal the deposit. You can help your child fund the deposit. Your child will be the only one responsible for making payments.