Using credit cards responsibly is an important part of building a healthy credit score. However, many people ruin their credit scores by using credit cards before they understand the process of building and maintaining good credit. Consider the following suggestions when deciding on the best age to get your first credit card:
Minors Under the Age of 18
Though some minors may have their parents’ credit cards, minors aren’t allowed to apply for credit cards under their own name. Some credit card companies allow primary credit card users to list authorized users on the account. These authorized minors can have their own cards that are printed with their names.
White Mountain Partners recommend that parents use this time to educate their children on appropriate credit card use. However, any minor hoping to open a line of credit on their own must understand that the law dictates that anyone under the age of 21 cannot apply for their own credit card without proof of stable income or a cosigner that is able to cover their bills.
Young Adults Between 18 – 20
Though most experts recommend that young adults avoid credit card use altogether, this is an excellent time for responsible credit card users to start building their credit cards. According to 2009’s Credit CARD Act, anyone between 18 – 21 must show proof of stable employment or assets, indicating they can pay the loan back. At this time, young adults should seriously consider if they are ready for a credit card.
If a hopeful applicant plans to use their credit card to live above their means, this is a fast track into debt. However, young, financially stable adults that are only using their credit card to build their credit and make purchases that they can pay off in full are in the best position to make healthy financial decisions with their credit card use.
Adults at 21
After 21, most adults have a better understanding of how credit card companies work. At the age of 21, anyone can apply for credit cards without being met with the CARD Act restrictions. However, at this age, White Mountain Partners share that it’s still imperative to manage this credit card use responsibly at this time. If you’re applying for your first credit card around this age, make sure you are able to pay your bills in full on time and avoid taking on large balances.
Make sure you are able to make timely payments by setting up alerts for your email or phone prior to your credit card’s due date. Additionally, you can set up automatic payments to make sure you’re never late in paying your credit card bills.
Building Credit as an Adult
Throughout your 20’s, 30’s, and onwards, you’ll have years to continue building your credit. The sooner you’re able to start making healthier financial decisions, the stronger your credit will be. Wherever you are currently with your credit score, using your credit cards responsibly will allow you to make bigger, more substantial purchases as you get older.
Getting a credit card before the right age can seriously affect your credit score. Be sure to keep this information in mind to better understand best practices when applying for and using a credit card
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