Cashback can be a nice perk, especially if you charge large items you plan to purchase anyway. We used it for our photovoltaic system on the roof and got our 2%. Getting alerts when charges are made are also a nice feature.
If I didn’t think my kids were responsible enough to check their credit card statements and pay the bills…I would not think them responsible enough to have their own credit card.
It’s a package.
@partyof5 well I stand corrected then, interesting that someone could build credit with no responsibility for payment. I have had user cards for my wife that didn’t show up on her credit but maybe that’s not the norm.
All this talk about student’s credit card reminded me that my DD who just turned 18 probably should apply for a credit card under her name. She has two cards that were opened under my name and share my credit limit. To my surprise, when I checked her credit score, it was very high in a “good” category. This means that if child is an authorized user on parent’s credit card, it still builds credit. Now it is time to open her own account.
Please let us know how easy or hard it is for your 18 year old to open her own credit card account…unless she has a job, and income.
We know folks whose 18 year old college freshmen were declined cards…even low credit limit ones…because the kid had no income of their own.
I will report back when I figure out which credit card she needs to apply for. She has been working part-time for the past two and a half years and has been filing taxes. Her earnings are not high, but regular. Which brings the question if she should apply for a student credit card or just a regular credit card?
My youngest just turned 18, no credit history, and Discover gave her a $1000 credit limit with her UChicago acceptance letter. That was all that I sent in to them.
I contacted my credit card company once the kids were seniors in high school and ordered a card in their name that’s connected to my account. Their credit is affected by me paying (or not paying) the bill. Since I pay in full each month, they’ll have great credit scores by the time they need to branch out on their own.
They know the parameters for using the cards. They have yet to push the limits I put forth, so it’s worked for us. Generally it’s meant to be used for college expenses not covered (like books) but they can use it when they are home to fill the gas tank in the car they use here, or to stop and get groceries. They make their own plane reservations which is nice because they should be doing things like that.
“I know for certain that you only build credit when you are the primary credit card account holder”
this is NOT true, according to Experian.
What THEY say is that if a child is added as a “joint acct holder” , and not as an “authorized user”, then their FICO score CAN benefit from a shared good credit/ payment history with their parents.
"Cosigning a Credit Card to Help Build Credit
Another option is to ask a family member to add you as an authorized user or a joint account holder on one of their credit card accounts.
As a joint account holder, you are fully and equally responsible for payments on the account, so be aware that any late payments made on the account will affect you also. If you are added only as authorized user, you will not be financially responsible for making payments, even though you are able to use the account.
Not all lenders report authorized user accounts to the credit reporting companies, so you may wish to check with the lender first to make sure the account will appear on your credit report once you are added."
http://www.experian.com/blogs/ask-experian/start-building-credit/
@Ballerina016
She will probably NOT be able to get a credit card in her own name , unless she has her own source of income.
“The Credit Card Accountability, Responsibility and Disclosure Act, known as the CARD Act, prohibits you from getting a credit card if you are under 21, unless you are able to show that you have a source of income of your own so that you can pay back any charges you make on the card. If you are unable to show an ability to repay any charges, you will need a cosigner.”
this quote is from the same link as I posted above.
Well I agree that I am wrong on the first part, but I have to be right on the second part as you can see above. I only put my DD name and info in and nothing from me.
@menloparkmom I will report back. She just applied online. My older son got his first credit card at 18, but it was 10 years ago so maybe rules changed. It was Amazon student card. They don’t offer student’s cards anymore. Post #46 reported that 18 years old got approved for Discover. We shell see. DD does have monthly earnings from her part time job. It is not much, but at least something and over extended period of time.
D was over 21 when she applied for AmEx Costco card in store and was instantly approved with $3500 credit limit. She was still a student and had no job. She had been a joint cardholder with me since she started college in 2009.
“maybe rules changed”
they did change in 2009, when credit card companies were no longer allowed to hike interest rates when ever they felt like it.
that was part of the CARD act.
The bill went into effect on February 22, 2010, nine months after it was enacted.
" I have to be right on the second part as you can see above. I only put my DD name and info in and nothing from me.
That was all that I sent in to them. "
YOU sent it to them, not your daughter.
They can track and know who was asking for it. YOU, not your DD.
8-|
https://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009
- Eliminates excessive marketing to young people. Consumers under the age of 21 must prove that they have an independent income or get a co-signer before applying for a credit card. The Act also prevents credit card companies from mailing offers to consumers under 21 unless they “opt in,” and prohibits companies from wooing students with T-shirts, free pizza and other free gifts at university-sponsored events.[5]
Every time this subject comes up I’m always surprised how much trouble some people have getting cards for their kids.
In 2015, as an 18 year old, my S had no income and was able to get a secured card from our credit union. When he went back a year later (with proof of income) he was able to convert the card to a regular one with rewards.
In 2013, as an 18 year old, my D was able to get a regular card from the start through our credit union by showing income.
Both started with low limits, but that’s all they needed. It was really only meant for incidentals, convenience and to build credit.
https://www.discover.com/credit-cards/student/faq.html
minimum age 18
https://www.discover.com/credit-cards/student/terms-and-condition.html
^good grades reward
@menloparkmom seriously, they know who’s typing in the info…wow… =))
Regarding have your child as an authorized user and building credit: my son is an authorized user on our cc. When he was applying for a car loan after graduation we had to co-sign the loan for him. The bank could see his credit history and he had a FICA score over 750 - but they could see he got there by being an authorized user on our account. They would not give him a loan without a co-signer. So the credit history does show up - but banks can see that it is not his personal history.
Also for clarification - the credit he had built up was enough to get himself a personal cc after graduation, but not for a car loan without a co-signer.
Same experience as @CT1417 for my D2. The only thing on her credit report is a Bank of America card that I took out and gave her an additional card for when she did a gap year in Europe. Credit score is in the 700 range. D1 had an additional Amazon Visa that I got her hoping to help her with credit history and it doesn’t show up on her credit report at all.