Giving a kid a credit card

[midtown 3341]

Anyone see any reason to give their young kid a credit card?  Like 14? 

The only two reasons I can think of.   It will help them build credit.  He/she can go into a store and make purchases without you having to be there.  

[Gardner Barnes 1562]

My 12 and 15 year olds both have cards. Originally it was for emergencies but we have found that it is also helpful when they go out with friends because we don’t have to go get them cash.

 

Both of them have been very responsible with the cards.

 

 

[Chewbacca 7667]

If you give a mouse a cookie...

[NeverMarryAStripper 21780]

My bank offers prepaid debit cards. I got one for my son.  I can just transfer whatever amount I want to his card.  I usually keep about $30 to $40 on it that he can use when he's out with his friends.  I know he can't go on a wild spending spree and I don't worry about him losing it and someone draining my account.  He also knows if he ever has some kind of emergency that I can transfer money to him instantly.  I think it's really worked out well so far and I believe it is teaching his some fiscal responsibility.

[midtown 3341]

2 minutes ago, NeverMarryAStripper said:

My bank offers prepaid debit cards. I got one for my son. 

That's a waste of points.   I was going to give my son an amex.  no fee but I get the points.

[Deej 76401]

23 minutes ago, midtown said:

He/she can go into a store and make purchases without you having to be there.  

Really only useful if you have a place that will sell alcohol and tobacco to 14 year olds. 

[Jerry Callo 8647]

My girls, 14 and 16, have bank debit/credit cards tied to their checking accounts.  

[Gene Parmesan 3970]

I guess if your kid is not a shithead it'll be fine.  They just want it as an accessory to show off though.

 

[NeverMarryAStripper 21780]

That's a waste of points.   I was going to give my son an amex.  no fee but I get the points.

He doesn’t spend enough for the points to matter and I prefer the debit because he can use in an ATM as well if he needs cash.

[midtown 3341]

1 minute ago, NeverMarryAStripper said:

ATM as well if he needs cash.

for strippers of course

[NeverMarryAStripper 21780]

I already told him not to give any money to his mom.

[Sbbruin 21690]

My son turned 16 so we moved his account from my name to his, and he got a Visa debit card tied to his account.  But if he was ever in an emergency and needed a lot of money, he can call me and I can instantly transfer money to his account.  

[Handcruser 2805]

Daughter, 16, has a debit card and an Amex.

She’s covered for whatever.


Sent from my iPhone using Tapatalk Pro

[deadshank 24648]

1 hour ago, Handcruser said:

Daughter, 16, has a debit card and an Amex.

She’s covered for whatever.


Sent from my iPhone using Tapatalk Pro

Covered in what?  Glitter?

[Quagmire 2140]

Well might as well give them a gun too, so they can protect themselves from credit card thieves

[Spur08 381]

Do dealers take credit cards these days?

I guess you need one to set up venmo...

[Deej 76401]

2 hours ago, Handcruser said:

Daughter, 16, has a debit card and an Amex.

She’s covered for whatever.


Sent from my iPhone using Tapatalk Pro

"I get older and they stay the same age, and have Amex."

[JoseMedinaDeJesus 207]

I put my kid on a card from my credit union with a 400 dollar max in both of out names. She was 14.  She is 20 now and has credit score over 700.  She was always responsible with it. And if she hadnt been, she would have lost that privilege.  Also, the 400 dollar max keeps the damage they can do to an absolute minimum.  Last year when she went to buy a mew car she was able to do it on her own with a 4.9% interest rate.

 

Yes do it.

[davidg 4020]

That's a waste of points.   I was going to give my son an amex.  no fee but I get the points.

Both kids got an AMX on my account when they started driving. I set up spending limits and purchase notifications to monitor spending.

[hornimal 80]

do it for the reason JMDJ stated, by the time he/she graduates from college they'll have a 5+ year old established trade line on their credit report.

[Iceman 2624]

When they started working, we started banking/ "your money" discussions.

15-16 years old for our boys.

 

When I was a kid, we didn't need a credit card and debit cards didn't exist the way they do now.  In today's FAR more electronic / borderline cashless society  I see it as being a very useful tool for driving those discussions and lessons.

Edited September 13, 2019 by Iceman

[HouTex 1841]

My kids had debit cards tied to their bank accounts like most everyone.  I also gave them Amex cards tied to my account for "emergencies."  They had lots of emergencies.  We had monthly one-sided conversations that went something like "Stop using the fucking Amex!!!"

[phdhorn 6224]

16 hours ago, midtown said:

Anyone see any reason to give their young kid a credit card?  Like 14? 

The only two reasons I can think of.   It will help them build credit.  He/she can go into a store and make purchases without you having to be there.  

1) First, we got each kid a copy of our main Visa card (same #, their names).  Worked okay but the younger kept losing the fucking thing so we all had to wait until we got new ones (4-5 days) which was a bitch.  The upside was we didn't have to apply for yet another card.  If you beat into them don't lose this it works good.

2) Building credit - this is nonexistent and useless if kids are using "mom and dad's card".  If they're not paying for their own card, they establish no credit.  So when each kid turned 18, I let 'em get their own cards (they got them wtih so-so terms, not really having any credit score, despite using our "family card" for 2- 3 years.   Then I paid for their use... so on paper it looked like they were paying for their own card.  That's when their credit scores started rising.  They each had about a $200 limit per month, after that they had to call (we also had a few rules about "spending in one purchase" amounts, type of stuff, etc.).

Now the 24 year old of course has her own card completely, and the 20 year old (a future finance type guy) has 3 now (lol!).  But he's got a strategy and his credit score is well up there, so it's working.  Older pays 100% for their own stuff of course, younger still at UT so he's got $400/month total from parents - anything after that he has to dip into his savings except for emergency etc. in which case we discuss.  Seems to be working well.

Lesson:  let 'em use a "family card" simply for convenience.  But to start building their own, they need their own card/number completely in their name, even if mom/dad pays the monthly bill.

[CooterBrown 17852]

2 hours ago, Iceman said:

When they started working, we started banking/ "your money" discussions.

We started the financial discussions really early on a level suited for their age. From around 2 or 3, it started with handing them a dollar and asking "what do we do with money?"  The reply we taught was "Save and invest it!".

At 5, we started an allowance. It's not tied chores because chores are what you are supposed to do.  The allowance is $1 for every year they are old.  They have 3 jars: Spend, Save, Donate.  Any money they get goes in the jars.  Anytime they get money, it's split among the 3 jars. The most has to go in save, they can split between the other two how they see fit with a minimum of $1 in the donate jar.  Every few months, we go to the bank. I match whatever their deposit is. I then move the money to their respective investment accounts. I also auto-invest $50 each every month.  Through the power of compound interest and steady investments, the 12 year old has around $20K and the 5 year old has around $5K.  

As soon as they're old enough, they'll get a bank account and a $500 limit credit card to build credit.  The goal is for them to self manage their spending. I'll probably let them do what they want but every month we will sit down and go item by item and discuss what they spent, why, and if that was a good choice. When they go to college, I'll give them a family credit so they have a large limit for emergencies but keep limit their personal card's limit to around whatever we decide will be their monthly spending budget. 

So far, this has worked really well for the older kid. She doesn't ask us to buy her stuff. She saves her money and buys it herself. She's also pretty picky on what she decides to spend her money on and doesn't do it that often.  Last year she bought her mom an Apple Watch for Xmas.   Haven't seen any results with the younger sister but I didn't notice anything with the older one until around 10.

Edited September 13, 2019 by CooterBrown

[midtown 3341]

41 minutes ago, phdhorn said:

But to start building their own, they need their own card/number completely in their name, even if mom/dad pays the monthly bill.

Well I did not know that.  After some research it looks like no one can build credit until they are 18. 

I was looking at the bene's of giving him a AMEX and it looks like the card will pay for his global entry but that's the only benefit.

Edited September 13, 2019 by midtown

[phdhorn 6224]

34 minutes ago, midtown said:

Well I did not know that.  After some research it looks like no one can build credit until they are 18. 

I was looking at the bene's of giving him a AMEX and it looks like the card will pay for his global entry but that's the only benefit.

Yeah, I didn't really until our oldest tried to get her own card about age 18.  We were told she has zero credit history, despite using our family cards.  We managed to beg and plead for her to get a card from UFCU and they obliged.

Another hint:  one thing that got my youngest a credit history was taking out a short-term student tuition loan at UT.  Since UT (and I assume other schools) treats the kid as essentially on his/her own (i.e. only the student can run an EFT to pay for stuff, the parents can't, even if it's their money(!) - he had to set it up.  Hell I can't even see his entire financial stuff unless he gives me permission (which he did)).

Anyway, normally he'd pay the tuition bill all at once or in 3-month (per semester) increments, the first installment of 1/2 the tuition due before first day of classes, the other two installments of the 2nd half usually paid about mid-month (Oct. and Nov.), tuition being fully paid by mid-Nov.

With the short-term tuition loan, he takes out the entire tuition amount.  Then he (heh, er, I) has up to about mid-November to pay the loan back.  He (we) can pay any amount in any number of payments, as long as the entire loan is paid by the deadline.  Interest on this is about $25, which is about what the fee is anyway for paying "normal" tuition way.  The good thing for me is that I can shuffle around my money for 3 months and pay when convenient (I usually pay 1/2 back end of Sept. then the other by the deadline, maybe not much different than the normal except I don't owe it before school starts, plus again I can pay whatever/whenever I want up to the due date, and I really like that flexibility).  The good thing for him is that it establishes a credit history, because the loan is in HIS name, not mine, no matter where the payments come from.  I've done this now for the past 4 semesters and his credit score was already past 745 or so this past time around - not bad for a 20 year old.  Each one of those loan taps puts a little ding on his score, but once paid back his score goes higher than it was before the loan.

I really like that resource at UT.

[horn4life 3749]

Your kids need savings/checking accounts.  Most banks and for certain credit unions have teen checking accounts for them to link a debit card to.  I have it linked to where I can put cash in for them, but they basically operate independently now. A job where they actually pull down a W-2 and pay taxes is also good,  Especially for building their own employment/credit history. When they are 18 you can put some money in the bank and get them a secured credit card that will get them started on the credit building. 

My older daughter still has her old debit card so that in case of some emergency I could put a wad of cash in her account in like 5 minutes in case of an emergency.

My only real suggestion is make the kids look at their statements with you.  Let them see where they spend their money.  Hopefully they will be more conservative and thriftful after seeing how much the burn on junk. (but that may be wishful thinking)

 

[HRSchenker 2248]

I would absolutely do it. Even if it's a no annual fee secured card, it will help them build their credit and understand how to spend money responsibly. I never had a credit card until I was 25 and never really understood the concept of credit. Finally built it up to 771 and I got a car loan last year at 2.9%. Wouldn't have been able to do that if I had zero credit!

[YChang 3425]

for strippers of course

Nah, Venmo works great these days.

[CooterBrown 17852]

My older daughter still has her old debit card so that in case of some emergency I could put a wad of cash in her account in like 5 minutes in case of an emergency.
 

Assuming you’re available by phone at the time of the emergency.

[pacman 7282]

On 9/12/2019 at 3:45 PM, NeverMarryAStripper said:

My bank offers prepaid debit cards. I got one for my son.  I can just transfer whatever amount I want to his card.  I usually keep about $30 to $40 on it that he can use when he's out with his friends.  I know he can't go on a wild spending spree and I don't worry about him losing it and someone draining my account.  He also knows if he ever has some kind of emergency that I can transfer money to him instantly.  I think it's really worked out well so far and I believe it is teaching his some fiscal responsibility.

i do this with the daughter's amex card. she gets credit card history and i get piece of mind on spending limits. although, she has never come anywhere near needing a limit. it's more because i thought she was more likely to lose the card or have it stolen. she has suffered neither, so it has been easy.

[bobcat1995 71]

The most surprising thing is my kids have never lost their cards.  They have had debit cards since middle school.  One is now in college and the other will be soon and never a lost card.  My wife has lost at least 3 cards in the same time frame.

 

Debit cards were the best thing when did when it came to money management for them.  If the friends didn't bring money, they had to spend their own money on the friend.  

[chesthair 231]

We are using Greenlight with our kids.  Actually pretty cool...tracks chores, etc.  

[Nueces River Rat 5522]

I didn't think it was possible for a kid to get a credit card in his/her name until they reached a certain age like 18.

But in any case and I say this now as a parent of a 19 year old and 21 year old.   I was hesitant to give my 21 year old the go ahead a year or so ago ( heck at least he asked me).  But I recalled my mom kind of encouraged me to get one when I was in college for that emergency situation like needing tires or something like that.  Good thing back then is the card companies locked your limit in pretty tight and wouldn't up until you proved yourself credit worthy by making payments on time.  I also had a gas card for Diamond Shamrock at the same time which yea I used for other things like beer, but never built a big balance on it.   Having said that, I think keeping current with both helped me get good credit earlier than some of my friends which made it almost a piece of cake to buy my first new car which in turn helped build my rating for a home purchase and other large ticket items we financed early in our marriage.    So putting that all into account, I had no problem with him getting the card and he's pretty frugal with his money as it is now with finishing his undergrad and holding a job too.   I figured it would be best for him to get that credit built up now so he when he wants to buy his first car, he's not calling my up to co sign and  hopefully he'll get favorable finance terms.   

[Bernard 879]

On 9/13/2019 at 8:11 AM, phdhorn said:

But to start building their own, they need their own card/number completely in their name, even if mom/dad pays the monthly bill.

I don’t think this is true. My understanding is that if you add your kid as an authorized user on your card, their credit report gets credited for all your timely payments. Seems to be confirmed here: https://www.creditcards.com/credit-card-news/what-is-the-minimum-age-to-be-an-authorized-user.php

Quote

You can boost a child’s credit by adding them as an authorized user, but cards’ policies vary widely on how old the child must be

Quote

Half of the 10 major issuers surveyed by CreditCards.com allow minors as authorized users with no minimum age. For example, Bank of America, Capital One, and Chase all allow children to be added to a primary account holder’s card regardless of age.

Of the rest, most allow minors but impose a minimum age in the teens, usually between 13 and 16. For example, American Express requires authorized users to be 13.

Quote

Most major issuers report an authorized user account on the guest’s credit files. 

Bernard

[Tonesky 900]

My kids - about to turn 17 - are overdue to have a credit card.  It would be great for them to start building a credit history, but the real catalyst is tracking their spending.  I want to get them off of my statement - for them to each have their own statement that details their spending.  My first thought was to get a business card (which I don't legitimately qualify for), naming them as employees, but bank and wire fraud, and all that shit....  Is there a solution other than opening two new credit card accounts for them, with me as co-signor/guarantor?

Edited August 17 by Tonesky

[Doc Daneeka 6769]

My daughters were authorized users on a couple of my cards from the time they were 13 or so. They had their debit cards tied to student checking account as soon as I was able to open them. They’ve been budgeting and tracking since then.

It’s my understanding that being authorized users did help them build a credit score. They were both 800+ by the time they were 19 which is way better than my dumb ass at their age. 

1 hour ago, Tonesky said:

me as co-signor/guarantor?

I’d be really surprised if you can get them their own before 18, but I’ve been surprised before. 

What kind of expense tracking are you talking about? For their benefit or yours? I’d think the cleanest way is to add them as authorized users on a card you don’t use. Tracking-wise, that’s the same as their own card.  

[Tonesky 900]

30 minutes ago, Doc Daneeka said:

What kind of expense tracking are you talking about? For their benefit or yours? I’d think the cleanest way is to add them as authorized users on a card you don’t use. Tracking-wise, that’s the same as their own card.  

For both our benefit. For them to start learning better budget responsibility, and for me to better know who is spending what. For example, having our respective Amazon purchases charged to separate cards. Also, as someone mentioned upthread, to avoid screwing my world every time one of them loses their card. 

[fuggled 576]

Who says you don't qualify as a business owner?  I've opened multiple business cards (for points) but never ran much of a business.  If you're ever going to resell stuff on eBay or start an Etsy store or just start a hobby that might become a business, it makes sense to keep those expenses separate.  Credit card companies don't care other than making sure you have sufficient income if business revenue is small.

[Buzzrock 14859]

What cards did you guys get? I had the 18 year old apply for one of Discover’s student cards but she was declined due to lack of income. 

[Gil Bang 25843]

On 8/17/2024 at 9:53 AM, Doc Daneeka said:

My daughters were authorized users on a couple of my cards from the time they were 13 or so. They had their debit cards tied to student checking account as soon as I was able to open them. They’ve been budgeting and tracking since then.

It’s my understanding that being authorized users did help them build a credit score. They were both 800+ by the time they were 19 which is way better than my dumb ass at their age. 

I’d be really surprised if you can get them their own before 18, but I’ve been surprised before. 

What kind of expense tracking are you talking about? For their benefit or yours? I’d think the cleanest way is to add them as authorized users on a card you don’t use. Tracking-wise, that’s the same as their own card.  

That used to be a racket.  Big swinging dicks used to add people as authorized users for a fee...sometimes as much as $25,000.   These were 1% types, with super-high credit lines.  There was a website that brokered the shit.  Of course, the "user" never received the account information or a card...they were blind to everything but their credit score bump. 

[Doc Daneeka 6769]

1 minute ago, Gil Bang said:

That used to be a racket.  Big swinging dicks used to add people as authorized users for a fee...sometimes as much as $25,000.   These were 1% types, with super-high credit lines.  There was a website that brokered the shit.  Of course, the "user" never received the account information or a card...they were blind to everything but their credit score bump. 

Well, hell, I grievously undercharged my daughters and they got cards. Of course, like the ex, I didn’t leave paying the statements in their unreliable hands. 

[tx 3 putt 75959]

On 9/12/2019 at 3:25 PM, midtown said:

Anyone see any reason to give their young kid a credit card?  Like 14? 

The only two reasons I can think of.   It will help them build credit.  He/she can go into a store and make purchases without you having to be there.  

 

100% do it. builds up credit and it’ll make it much easier when they leave the nest 

[52-80 19047]

It's 2024.  Get an Apple Card - no annual fees or other nonsense.  You can grant access to a 13 year old.  It's tied to their Apple account and your primary one, so everything can be monitored, limits can be set, etc.  It's also enabled on their phone -- which they probably prefer -- so no physical card to lose.

 

https://www.apple.com/apple-card/family/

 

[52-80 19047]

On 9/3/2024 at 10:54 PM, Buzzrock said:

What cards did you guys get? I had the 18 year old apply for one of Discover’s student cards but she was declined due to lack of income. 

Cap One is a very popular issuer for first card.  They're probably the most lenient.  It was my first independent card.  Previous to that I was added to my parents card, and I automatically inherited that to my credit history.