In this article, we will be discussing all you need to know about getting a credit card for your 17-year-old kid. We will also discuss some of the major benefits, pros, and cons of getting a credit card at a very young age.
You will stand a great chance at building excellent credit for yourself if you start building your credit from a teenage age.
Getting a credit card for your 17-year-old kid guarantees that you can start mentoring your kid on how to build their credit score at an early age.
Keep reading this article to know more about the best Credit card for 17-year-old;
Citi Diamond Preferred
This is one of the best credit cards for 17-old kids you can get out there, and this card will ensure that young adults have a chance to build an excellent credit score for themselves.
Your teen likely (hopefully) doesn’t have a need for a balance transfer to wipe out some debt.
However, the Citi Diamond Preferred Card is an excellent opportunity to settle some of your own debt and then open the floodgates to your teen so they can start building good credit habits.
The card also comes with an intro APR on purchases, but it’s unwise to make purchases on the card if you’ve performed a balance transfer, so hatch out a plan before you apply.
Advantages of getting Citi Diamond Credit card for 17-Year-Old
Intro APR. The Citi Diamond Preferred Card comes with a 0% intro APR on balance transfers for 21 months, reverting to 13.74% to 23.74% variable. This is one of the longest intro periods on the market.
No annual fee. You won’t pay an annual fee to use this card. Four-month limit to transfer a balance.
This card has a slightly longer than the average time limit for transferring existing debts of 4 months. Many cards on the market give you just 30 to 60 days to make a transfer.
The downside to getting a Citi Diamond credit card for 17-year-old
No rewards. This card is strictly focused on the intro APR offers, so this might not prove the greatest long-term credit card option for your teen when it comes to the building value.
Steep penalty APR. Missing payments can result in a penalty APR of 29.99% variable. Missing a payment can also lead to the loss of the card’s intro APR.
This isn’t a problem if you pay your balance in full at the end of each month, so consider turning on automatic payments.
Alternatives To Credit Card For 17-Year-Old
Although your teen could benefit from a credit card, they might not be ready for one just yet. Fortunately, debit cards for teens can teach your teen healthy financial habits without any risk of damaging their credit.
And when you’re confident your kid can manage their money, you can graduate them into a full-fledged credit card.
Step leverages secured loans to help your child develop a strong credit score. The
account combines aspects of a debit card and a credit card to help your child build credit. But you won’t have to worry about paying overdraft fees because Step won’t allow your kid to spend more money than is in their account.
Build credit. Step lets your kid develop a credit record even before they’re old enough to apply for a credit card.
Automated transfers. As the joint owner of the account, you can turn on recurring transfers to fund the card automatically.
No recurring fees. There’s no monthly or annual fee to use the Step card, and teens won’t have to maintain a minimum balance to keep the account active.
Can’t deposit cash or checks. You can’t deposit cash or checks into this account, but you can fund the account through direct deposits, bank-to-bank transfers, and apps like Venmo.
ATM withdrawals. ATM withdrawals work like cash advances with Step, so you may face interest fees or finance charges if your account balance is insufficient.
Getting A Credit Card For Young Adults
Before we get on discussing the wonders of getting a credit card for a 17-year-old it is important to know that you must be 18 years old to apply for a credit card by yourself.
You can’t get a credit card until you’re at least 18 years old. If you’re under 18, however, you can be an authorized user on someone else’s account.
This can be a good option for a minor as it helps them build a credit score and history. Having a strong credit history can help a minor be eligible for better credit card options such as a rewards or travel card once they’re old enough to apply.
Here’s an example of a typical journey a teen might have with credit cards
- Teens: 11–13 years old
This age range is a good time to introduce your tween to a debit or prepaid card designed for kids. These cards are a relatively safe way to teach your child how to spend responsibly.
They don’t accrue interest and they draw from preloaded money through a bank account or other source. These cards don’t build credit, however, so only rely on them until you think your kid has picked up on the fundamentals of card usage.
- Teens: 14–17 years old
If your teen proves they’re able to responsibly use a debit or prepaid card, consider letting them graduate to a credit card.
After you add them as authorized users, you can monitor their spending. At the same time, you can teach them how to manage credit before they get their own card.
- Teens: 18+ years old
Once your child hits 18 years of age, they can legally apply for a credit card with certain providers. This is where the training wheels can come off and your child can open an account in their own name.
While you could encourage your child to apply for strong rewards or travel cards right away, a student credit card is one of the safer options available.
These cards tend to have some built-in forgiveness for missed payments and few fees, which is perfect for a kid still coming to grips with a credit card.
Reasons Your Teen Should Get A Credit Card
You might think your teen is far too young to use a credit card. But you’ll find two big reasons why it could be a good idea for them to have one.
- It can teach your teen how to use a credit card responsibly for the future.
After adding your teen as an authorized user, you have control over their account and can see how they use their card.
With insight into their spending, you can more effectively teach them solid financial habits. It’s better for them to learn from you now than figure everything out on their own later.
- It can help your teen build credit early.
Most people start with a brand-new credit history when they’re ready to get a credit card. This usually means they’re limited to student cards and secured cards, both of which typically come with limited features.
You can help your teen build an impressive credit history before they reach adulthood. Just add them as an authorized user on your account and consistently make payments on time.
When they turn 18, their credit may be strong enough to expand their card options considerably.
- It’s convenient for parents and kids.
Sometimes you could forget to give your kid cash for meals at school, transportation or supplies.
Getting your kid a credit card can help you avoid unpleasant situations and avoid cash theft. And for some cards, you can set spending limits to ensure your child doesn’t spend over their budget.
- You can earn more rewards.
Why not get something in return for helping your teen build credit? Most credit cards let you earn rewards on purchases made by authorized users.
Consider a credit card geared toward families as adding your teen as an authorized user on one of these cards could help you earn additional rewards on common purchases.
Credit Card Mistakes To Teach Your Kids To Avoid
While you still have them under your wing, teach your teen how to avoid trouble with a credit card. Here are a few common pitfalls they should know about.
- Just paying the minimum payment.
A cardholder is allowed to make only the minimum monthly payment on their credit card. However, that’s arguably the worst thing to do behind paying late. Paying the minimum allows interest to snowball and debt to accumulate.
Here’s what to do: Show your teen why it’s smart to pay off their balance in full each month. Teach them how credit card interest accumulates, and how it can be avoided.
Teach your teen they should avoid spending close to their credit limit. Carrying a high balance puts one in danger of incurring over limit fees, on top of accumulating high debt. Many experts recommend keeping spending under 30% of one’s credit limit.
Here’s what to do: Encourage your teen to spend less than they receive from their allowance or job.
Teach them how their credit utilization ratio affects their credit score. And explain why it’s smart to keep their ratio under 30%.
- Paying late.
This is a sure path to decreasing a credit score. Because your teen is an authorized user on your account, you can protect them by paying your card bill as usual.
But if you see signs your teen may pay late in the future, it’s best to nip the problem in the bud.
Here’s what to do: Set up automatic payments on your card account so that you never miss a payment on your teen’s card account.
Meanwhile, ask your teen to repay you by a certain date each month. Encourage them to set up phone or calendar reminders so they don’t forget.
- Credit card fraud.
Teach your kids how to keep their credit card information safe. Although credit card fraud can happen even if you take all necessary precautions, it’s a good starting point for your kid to learn how to protect their credit cards.
Here’s what to do: Explain to your kids that credit card information can be copied and used illegally. Also, teach them how to recognize which sites are safe and which aren’t for online use.
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Getting a credit card for 17-year-old kids can be a great way to help them financially prepare for the future.
Before you make them an authorized user on an account, however, be sure they have proper financial supervision and that they understand the basics of how credit cards work.
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