How to get a credit card at 18
I am under 18: Can I get a credit card?
Yes, you can get a credit card if you are under 18, but there are some things you need to know. Getting a credit card is much like getting your first car, you can’t wait to use it and show it off to your friends. It can be pretty cool to get a credit card, but as the saying goes, with great power comes great responsibility.
What does that mean in terms of credit cards? Just because you have a credit card, that doesn’t mean you should be using it at the drop of a hat. While it may be difficult to fathom at 18, 19, and 20 years old, the time will come when your good credit is going to have major value (buying a home or a car).
Here’s the catch. If you are under 18 you may have to wait a while. Unless you have an adult willing to cosign a card for you, or add you to their existing credit card account, you will be unable to legally enter a contract until you are eighteen years old (a legal adult); therefore, you will be unable to get your own credit card. So yes, you can get on, but you can’t do it alone.
Does that Mean You Can’t Get Any Card at All?
No, this does not mean that you cannot get a card; you simply have to have a cosigner or be attached to another account. In 2010 new laws will pass preventing children under 18 from getting credit cards without their parents consent. What this means for you is that a relative or a friend cannot cosign your credit card after January of 2010. Your parents will have to be legally responsible for any debt that you incur.
Many companies also offer what is called a young adult card. This is a credit card with a low limit, between $200 and $500 that teaches the user financial responsibility. The interest rates are around 14%-18% and there are typically no fees associated with these cards. Parents should be aware that while the primary name on the account is their child’s name if their child defaults, then the parent will be responsible for the debt. What’s more, everyone’s credit is affected if the card goes into default.
Why You Can’t Get a Card on Your Own
The bottom line is that you are not an adult. Firstly, you cannot legally sign a contract if you are under the age of eighteen, which means a credit card company cannot legally collect from you (take you to court) to get paid for anything that you default on.
An adult cosigner means that there is a legal course for the credit card company to take if you should default on your credit card.
Another problem is the issue of work. Adults with obligations, such as rent, car payments, etc. are more motivated to continue
working than teenagers are. While there are always exceptions to such rules, overall, this is the prevailing attitude. Again, having an adult cosigner means that there is an increased chance that the credit card bills will be paid.
There are two reasons that new laws are being passed regarding parents cosigning their children’s credit card applications. First of all, it ensures that a parent is held responsible for their children’s debt. Secondly, it ensures that your parents know and understand that you have a credit card and what your responsibilities are.
The Responsibility of the Cosigner
Being a cosigner for a credit card is a serious responsibility, you are financially responsible for the credit card just as much as your child is. What many people do not realize is if they cosign for a card, that card is reported on their credit report, good or bad. What’s more, if you and your child default on the card then their credit now has a bad mark. It is important to maintain the card and pay the bill each month.
There are two other options someone under 18 years of age. The first one is to utilize a secured credit card that requires a deposit. This works just like a credit card, reporting positively to all credit agencies. However, the limit on your card does not increase unless you put more money in the account. This is a great way to teach a young person the responsibility of using a card, while ensuring that they have emergency money at the same time, without risking their credit score.
The second option is to open up a checking account at your bank and having them assigned a debit card. In the majority of the cases, however, the bank will require that the child’s account be attached to a parent’s account so that if the child overdraws on their account the money can be pulled from elsewhere.
Choosing a credit card for a child under the age of eighteen is a big responsibility. If you make the decision to get a credit card for your child you need to be aware of all of the risks involved.
Finding the Best Credit Card
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