The minimum age requirement for a credit card depends on the type of card the user is obtaining, with more restrictions for younger users. These restrictions help control credit card debt, which statistics show is becoming a problem among young people. According to MSN Money, 82 percent of undergrads with cards do not pay off their credit card in full every month, and these students have an average debt of $1,645.
An authorized user is a person who is issued a credit card that is tied to someone else's credit card account. The authorized user can make charges on the card, but the primary account holder is fully responsible for paying the bill. The United States does not have any laws on the minimum age required for an authorized credit card user, although some credit card companies set an age requirement, according to Consumer Action. For example, American Express requires authorized users to be at least 15 years old, First Command Bank sets the minimum age at 16 and some banks won't allow authorized users under 18.
18 Years Old
When teens in the United States turn 18, they are considered to be legal adults and can enter into contracts, including credit card agreements. However, due to legislation that went into effect in 2010, young people between 18 and 20 years old still have some restrictions on getting a credit card. The applicant must have a parent, guardian or spouse co-sign on the account or have proof of sufficient income to pay the credit card bills. The co-signer would be held liable for missed payments to the account, which may make some parents uneasy about signing with a child.
21 Years Old
At age 21, people in the United States can apply alone for a credit card and be approved without proof of sufficient income. However, credit card companies still reserve the right to reject an application due to lack of credit history or other reasons. In this case, one option is to obtain a secured credit card, which is easier to obtain because it poses less of a risk for the issuer, which holds a security deposit equal to the credit line amount.
If a parent is nervous about adding a child as an authorized user or co-signing on an 18 to 20-year-old's credit card account, one alternative is to have the child use a prepaid card or debit card instead. These types of cards have the benefit of being able to make purchase without cash, but they do not appear on credit reports and cannot damage credit history.
- MSN Money: Under 21? No Credit Card For You
- Consumer Action: A Baby With a Credit Card?
- Consumer Action: Families and Credit Cards
- Consumer Financial Protection Bureau. "Can a Card Issuer Consider My Age When Deciding Whether to Issue a Credit Card to Me?" Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "CARD Act Report: A Review of the Impact of the CARD Act on the Consumer Credit Card Market," Page 43. Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "CARD Act Report: A Review of the Impact of the CARD Act on the Consumer Credit Card Market," Page 44. Accessed Jan. 23, 2020.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009," Page 11. Accessed Jan. 23, 2020.
- Consumer.gov. "Using Credit." Accessed Jan. 23, 2020.
- Consumer Financial Protection Bureau. "I Want to Help My Daughter Start Her Credit History. What Should I Do?" Accessed Jan. 23, 2020.
- Visa. "Visa Buxx Card: Debit Card for Teens." Accessed Jan. 23, 2020.
- Federal Trade Commission. "Prepaid Cards." Accessed Jan. 23, 2020.
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009," Page 13. Accessed Jan. 23, 2020.