Ever wondered if you can get credit cards for 16-year-olds, believe it or not, there are many convincing reasons why your teenager should own a credit card.
As your teen approaches adulthood, responsible credit card use can pave the way for a stable financial future.
Irrespective of your age owning a credit card can turn out to be a huge responsibility that you have to be ready to shoulder.
By emphasizing responsible spending and on-time payments, you can help your teenager build their credit, even at a young age.
Depending on your teen’s age, you’ll have different options to consider. While the minimum age to qualify for a credit card is 18 years old.
Teens under 21 years old will have a harder time qualifying for their first credit card without a steady source of income.
However, credit cards for 16-year-olds without incomes can be added as authorized users on their parent or guardian’s credit card accounts.
How Credit Works
Before you can go on getting credit cards for 16-year-olds, let’s first understand how credit works, as this is a very important point to note.
Before adding your parent as an authorized user on your card, take some time to learn the basics of credit cards and credit scores, and how the former can impact the latter.
Make sure you understand why you should pay your statement balance in full, never pay late, and always keep a low credit utilization ratio.
If you want some training wheels, see if your parent has a Barclays credit card (like the Upromise Mastercard, which helps you save for college).
Barclays is one of the only credit card issuers that offer its cardholders the ability to set per-transaction spending limits for authorized users.
As long as you’re 16, it will also report your behavior to the credit bureaus, helping you build your credit.
Credit Card Age Limit
You can’t get your own credit card if you’re under the age of 18, this is to say 16-year-olds can’t get credit cards. But you can become an authorized user more on that below.
Even after you turn 18, the Credit CARD Act of 2009 states you’ll need to have either proof of independent income or a cosigner over the age of 21.
Since most card issuers don’t allow cosigners, you’ll generally need to be at least 18 and have income through a job or scholarship before you can get your own starter credit card.
How To Get Credit Cards for 16-Year-Olds
As a 16-year-old, the only way you can get a credit card is to become an authorized user on the card of a trusted adult. For simplicity’s sake, let’s just say that’s one of your parents.
All of the major credit card issuers allow authorized users who are 16. Many of them have no minimum age requirements whatsoever, meaning you could become an authorized user as soon as your parents decide you’re ready.
As an authorized user, you’ll receive your own credit card with your name on it and everything but it’ll have the same number as your parent’s credit card.
While you’ll be able to make purchases on the credit card (with your parent’s permission, of course), you won’t be legally responsible for the bill.
Just be sure you know whether your parents expect you to cover most or all of your spendings, and know that they will get a detailed breakdown of everything you spend.
How Becoming an Authorized User Affects Your Credit
As a 16-year-old, you probably don’t have a credit report because you haven’t taken out credit yet.
When your parent adds you as an authorized user, the credit card issuer will report the new account to the credit bureaus which will, in turn, generate a credit report.
If your parent’s credit card is in good standing if they’re carrying a low balance and paying their bill on time, getting added as an authorized user will likely help build your credit scores.
That’s why it’s important to only become an authorized user on the card of an adult with good financial habits.
Another crucial thing to check is whether your parent’s credit card issuer reports the behavior of underage authorized users to all three major credit bureaus.
While American Express and Wells Fargo allow underage authorized users, for example, they won’t report your behavior to the credit bureaus until you turn 18.
Best Credit Card For Teens 18 And Over
You may not be able to get credit cards for 16-year-olds, but from 18 years and above you can get a good credit card. Some of the best are given below;
Discover it Secured Credit Card:
The Discover it Secured Credit Card offers one of the best rewards programs of secured cards out there.
You’ll earn 2% cashback at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases automatically.
Even better, for new cardmembers Discover will double the cash back you’ve earned at the end of the first cardmember year.
Your security deposit will determine your credit line, offering flexibility for how much you can afford based on your teen’s spending habits.
Best Credit Cards For Students
Many credit card issuers offer a student credit card version to their popular entry-level cards though they don’t give credit cards for tm16-year-olds.
If you are 18 and above you can qualify for a student’s credit card. This is an excellent way for teens 18 and older to qualify for cards with even better rewards programs.
Functioning the same way as traditional credit cards do, student credit cards usually have lower credit limits but a higher approval rate for those with no credit history.
Keep in mind that student credit cards are restricted towards college students in two- or four-year colleges and not middle or high school students.
Most student credit cards also offer rewards geared toward students and their spending habits.
Therefore, college students should use their credit cards on essential purchases such as textbooks and dorm essentials.
Below we’ve gathered some of our top picks for student cards based on the rewards rate and card benefits;
Discover it Student Cash Back: Unlimited Cashback Match only from Discover. Discover will automatically match all the cashback you’ve earned at the end of your first year.
So you could turn $50 cashback into $100. Or turn $100 into $200. There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
5% cashback on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations, and when you pay using PayPal, up to the quarterly maximum when you activate, 1% unlimited cash back on all other purchases – automatically.
Bank of America Travel Rewards Credit Card for Students: Earn 25,000 online bonus points if you make at least $1,000 in purchases in the first 90 days of your account opening. Earn 1.5 points for every $1 you spend on all purchases.
Deserve EDU Mastercard for Students: Receive one year of Amazon Prime Student on Deserving after your first purchase with your new Deserve EDU Mastercard (Lifetime Value of $59).
Earn 1% unlimited cash back on ALL purchases with your Deserve EDU Mastercard. Once approved, you’ll automatically start earning cashback on all purchases.
If you’re at least 18 years old and are a college student, this is an ideal time to apply as there are plenty of options to choose from.
Whether you want to earn travel rewards or cashback, these credit cards can also help you establish your credit from the ground up.
How to Get a Credit Card For Your Teenager
If you are a teenager and at least 18, you can qualify for a credit card, this is to say you can’t get credit cards for 18-year-olds not without being an authorized user at least.
Depending on your teen’s age and income, they may be able to qualify for a credit card without the help of a parent or guardian.
They’ll be able to file their application under their name.
But if your teen is younger than 18 or has no income source, it’s best to add them as an authorized user on your existing credit card.
Simply call the card issuer to add an authorized user to your card, as you’ll want to check for a minimum age requirement or any additional fees.
Your teen will then have a separate card under their name.
Apply for a Traditional Credit Card
Teens who are 18 years and older can apply for a traditional credit card without the help of a parent or a guardian but must prove a source of income.
The Credit CARD Act of 2009 tightened these regulations on credit card companies, requiring applicants under 21 years of age to demonstrate their ability to make payments.
Therefore, teens will have to provide proof of income, such as a W-2 form from their employer.
Keep in mind that the Credit CARD Act of 2009 restricts teens without income such as a part-time job, to gain credit card approval.
Any allowance, even on a regular basis, will not count.
How to Build Credit As a Teenager
It’s never too early to start thinking about building credit. Getting your first credit card whether it’s your very own or if you’re an authorized user requires a lot of commitment.
Over time, your credit score will gradually increase with good credit habits. Here are some tips to help you build your credit with your first card:
Always make your payments on time and in full. At the end of your billing cycle each month, you’ll want to make sure you pay your credit card bill.
Otherwise, you’ll accrue interest on your balance, negatively affecting your credit score.
Never spend more than you can payback. Credit cards aren’t imaginary money, and you’re responsible for every transaction you make.
The average household carries over $8,000 in credit card debt, which builds up if you fail to make your payments.
Keep credit utilization low; Credit utilization is the percentage of credit you use, given your total available credit available.
It’s recommended that you spend no more than 30% of your credit limit. If your maximum credit limit is $500, you shouldn’t charge more than $150 before paying your balance off in full.
Having good credit is a vital part of your financial future. Since it takes years to build an excellent credit score.
It may be a good idea to get your first credit card as a teenager. But you can’t get credit cards for 16-year-olds and less unless it involves an authorized user.