Does she really NEED a credit card in her name only now? Not want…need?
Student denied for Capital One card due to being authorized user on parent credit cards. What to do?
Slightly off topic but related - be cautious about closing accounts. My son had a checking account at our credit union from his early teens. Shortly after he moved across country for a job in his mid 20s, he closed the account down. When he decided to buy a new car, he got turned down for financing because he didn’t have any bank accounts more than a year old. He has an excellent credit score and income. He was able to borrow through his bank at a slightly higher interest rate. We were very surprised that closing the account caused an issue. He could easily have kept it open, just didn’t see the point (he likes his life simple unlike his dad who has multiple accounts and credit cards and tells me which I should use to get better points depending on whether I am buying gas, food, from Amazon etc. - I can’t keep them straight [OK, can’t be bothered])
@thumper1 she does not “need” a card at the immediate moment. I did start this thread by saying this is a first world privileged princess problem. From her standpoint she can get by just fine as an authorized user on our accounts. We think it’s good to have her start to build credit in her own name. If it doesn’t work right now that’s fine, but it seems worthwhile to follow up a bit more.
@Corinthian I do understand what you said. I’m sorry that wasn’t clear.
My kids went to college before the credit card reform that took place in 2008. Both had credit cards packaged with their student accounts from Bank of America. That type of account no longer exists.
If my kids had not had student accounts that included credit cards (I think they had a $500 credit limit), I would have asked them to wait until they had jobs after graduation to get their own credit cards. But that is my opinion.
Honestly, I don’t think you “build up credit” that much by having your own credit card.
I think it is a good idea to start building a credit score as early as possible. My kids both had good credit scores by the time they launched to real life (as in out of school, renting/buying their own homes/furniture/cars etc)
Credit scores are weird animals. We both have very high ones but when we bought our current car we discovered mine was a few points higher than my husbands which we thought was hilarious. At that point I had never had earned income of my own in the US.
I would have her visit your bank where you do your business and have her obtain a secured credit card. Those are intended for people with no/bad credit. No shame in a child not having a credit history. No one is born with it. With that she will be able to build credit and then move onto a normal card.
Good luck.
I churn credit cards and used my daughter for authorized user bonuses since she was 15. I am sure she had 8 or more cards in her name(but as an authorized user) by the time she turned 18. She was instantly approved by Capital One and Discover for her own cards the day of her 18th birthday. I think she was helped by having an investment account with capital gains/interest income, as little as it may have been. I think it’s essential that they have good credit, familiarity with credit cards, and their own banking accounts as soon as possible.
@Parent1337 what year did this happen?
I cannot believe that there are credit card cos that would issue an unsecured credit card to someone with only a summer or temp income. What else are those banks up to? Time to rethink banks in my portfolio… 
As a starting point to establishing credit, your D. can apply for individual store revolving card credit rather than generalized credit. Particularly helpful if she lives near a department store or a store like Target where she also would tend to shop. Generally the stores are eager to get people to sign up – often offering a discount on a purchase if you apply – and there is often instant approval. Not a high credit line at first, and obviously the Target card can only be used at Target (which of course is why the stores are so generous with their credit!) But it’s a good way to get started-- and also pretty useful to have store credit at a place like Target or Sears when your D. does move into her own apartment and needs to purchase cookware and small appliances. (And of course the products can be ordered online as well).
As a youngster I established my own credit that way – I think my first card ever was a Macy’s card and that was just one of those situations where the store solicited me to apply.
I’d also just say that while it is fine to ask for ideas online, if the goal is for the youngster to establish credit, then she should be the one handling the application process. If she can’t get it together to apply for more than the one card that turned her down without parental help, she’s not really ready to take on the responsibility of credit management. Keep in mind that the one thing that is worse than no credit history is a bad credit history – that’s a hole that takes a while to dig out of – and young kids tend to mess things up just out of carelessness and not understanding the need to be proactive if they haven’t received a bill, and not to wait until the last minute to send a payment, etc.
The main thing to understand with the first app is that the different cards have different standards for approving applications, and obviously the cards that are ranked as best due to highest cash back rewards or lowest interest also tend to have more stringent standards as to who they approve.
My first credit card was a Sears card I got while I was a grad student back in the Stone Age. Six years later, I applied for my first real credit card…a Bank Americard. Remember those?? I was in my tenth year of teaching…and my application was denied due to insufficient income. Didn’t matter that I had that Sears card in good standing for more than 6 years.
But Citibank approved me for a visa! I still,have that card.
I’m totally with those who advise getting one where you all bank. My son’s checking and savings accounts are termed student accounts and they also have a student credit card. He got it in 2014 after he’d direct deposited a couple checks from his summer job, not a lot of $ coming in. I went with him to talk to our personal banker (that’s how our bank handles things) and she essentially got it approved on the spot. I was honestly surprised at how easy it was. It probably helps that we’re a long time customer of the bank and while not wealthy at.all. have held decent funds there in different forms. So far it appears he’s been responsible with it and has had a couple credit limit increases. He’s also been an authorized user on one of our CC’s since he was 16 and got his license.
As to why he has it…a couple reasons. I’m not a fan of debit cards (yeah I’m kinda old fashioned on that) as the protections aren’t as good imho as with CC’s. Don’t like the direct linkage to checking acct nor potential handling of disputes, etc. I also wanted him to see how much small purchases add up each month. You buy a tank of gas, go out a couple times, buy a new t-shirt and you’re at $100 or more. It’s a very visual reminder when the bill comes in and he has to pay it, he sees how easily it mounts up. Our arrangement works well for us, he uses our CC for things we pay for - primarily books at this point (also useful when he went to the ER and had a good sized co-pay). Everything else is on his. We also give him 6 months of expenses at the beginning of the semester (tuition, rent, food and utilities budget) and it’s up to him to pay them on time. Have a basic budget spreadsheet and at end of semester he puts in actual expenses vs plan and we reconcile/decide if adjustments are needed. Trying to get him ready to make good decisions when he lives on his own down the road.
I don’t think credit score or history are the issues in this case. It is simply an income reporting issue. She may or may not be able to rectify this by talking to someone, but I suspect that if she had entered household income to start with, or all support received from oarents, she would have been auto approved. Daughter is benefitting from being an authorized user on parent accounts and likely has a solid score and history (assuming a decent age of credit and no warts on the accounts). This could be confirmed via credit karma or a similar service. @Corinthian, do be aware that removing her as an authorized user from your cards will affect her score.
When DS applied for a student card, for income they said to include money paid by parents for tuition and expenses and was approved with no problem. He is very good about using the credit card, tracking expenses and paying it off each month. The amazing thing is the amount of credit offers that just pour in since he got the first card.
My son’s credit card was approved solely on the income he was getting from his summer job. Period. Didn’t include money we gave him for room+ board, etc. So it’s a YMMV situation. I’m sure our banking relationship helped, hence the suggestion to start where you bank.
@BunsenBurner it was a low limit and he did have more than the limit in his accounts. And his accounts were linked with our accounts. Not a lot of risk on the bank’s part, relatively speaking. Obviously they want to lock customers in at an early age. Looking for a car for him, we got a tremendous deal on a Ford if we put son’s name on title and took out a special loan for college students - had to be cosigned by us and he had to show proof he was a college student. Very low interest loan, knocked a chunk off the deal we had already made so this was a Ford incentive, not dealer. Dealership told us unofficially we needed to keep it open for 4 months before paying it off completely. You can’t believe how much mail my son gets from Ford now on cars, etc - stuff specifically targeted to college students. In both cases it’s obviously marketing and securing customers as early as possible and then keeping them.
Start with Discover card - granted much easier than one we had extensive banking relationship and after capital one denied ds. After about 6 mo of buying a few things a month and paying on time in full - Capital One and everyone else came asking him to consider their cards.
They are not picking up that there is a small balance on the card, but that there is a HUGE maximum credit limit that is available to all authorized users on the account. It is the ratio that is throwing them, that she has the potential to charge, and OWE, the full balance on those cards. Capital One doesn’t want to be behind that balance on a limited income.
Contacting the credit reporting companies does nothing. They don’t grant credit.
I’d call them and see what they want you to do. Taking her off your cards will free up space for her to have more credit available.
@BunsenBurner - With a starting limit of $500 they weren’t exactly taking a huge risk.
@BunsenBurner, my daughter started at $300.