If you always spend less than you earn and have a track record of paying your bills on time, consider obtaining a credit card. However, if you regularly overdraw your checking account or borrow money from family and friends, it may be unwise to do so. Building your credit history early on is often recommended, and credit cards are usually the starting point. But what is the minimum age requirement for obtaining a credit card, how do you apply for one, and when will you know you are financially prepared?

When can you obtain a credit card?

To be a primary cardholder for a credit card, you must be at least 18 years old. However, age is one of many factors considered when applying for a credit card.

To qualify for a credit card, you typically need to have an established credit history and a reliable source of income. Many 18-year-olds need to have these qualifications. In this case, adding a cosigner to your card application might be necessary for approval.

If you are not yet 18, you may be able to become an authorized user on your parent’s credit card. As an authorized user, you can use a credit card like anyone else but are not responsible for paying the bill. They will be liable if you accumulate a large balance on your parent’s card.

The minimum age required to become an authorized user on a credit card depends on the card issuer, and the figures vary substantially. American Express has one of the lowest age requirements at 13 years old, while U.S. Bank requires children to be at least 16 years old. Other card providers do not have a specific minimum age requirement.

When are you prepared for a credit card?

Although you can technically qualify for a credit card as a primary cardholder at age 18 or as an authorized user while you’re still legally a child, remember that being eligible does not mean you should apply for it. Using a credit card irresponsibly can lead to cycles of debt, tons of fees, and severe damage to your credit score.

Given a credit card’s risks, you should only get a credit card when all of the following apply:

You spend less than you earn

If you regularly overdraw your bank account or borrow money from friends, you must improve your fundamental financial habits before applying for credit. Poor impulse control combined with increased access to credit is a recipe for ending up with tons of high-interest debt.

Try to go one year without overdrawing your checking account or borrowing money. Pass that milestone, and then you can consider applying for a credit card.

Maintain a Budget

Keeping your monthly expenses in different categories, such as groceries and dining out, can help you create a budget. This strategy will help you be more aware of your spending habits and reduce the urge to make impulse purchases. It can also help you avoid incurring high credit card debt.

Pay Your Bills on Time

Forgetting to pay your monthly bills can lead to missed credit card payments. Your credit card issuer can charge you up to $29 for the first missed payment and additional fees for repeated missed payments. Some issuers may also increase your annual percentage rate (APR) if you miss a payment, resulting in high-interest charges if you don’t pay your card bill in full each month.

Why It’s Worthwhile to Get a Credit Card

Given the potential financial pitfalls of using credit cards, why not use a debit card or cash instead?

Credit Cards Support Your Credit Score

Suppose you are responsible for opening and using a credit card while in your teenage years; it can help you build a solid credit score that makes life easier when you enter adulthood. Purchasing everything with a debit card or cash will not affect your credit score.

Good credit can help you secure an apartment, sign up for utilities without a deposit, and even save on car insurance premiums.

A strong credit history makes you a more reliable borrower and, therefore, more attractive to lenders. If you are interested in buying a house in the future, you can only qualify for the lowest interest rates if you have a superb credit score.

One of the most important things you can do to build good credit is consistently paying off your credit card balance on time. This makes up 35% of your credit score and is the most significant factor in building and maintaining good credit. If you have a limited credit history, making timely payments is even more critical.
Credit utilization, or the amount of credit you use from your total combined credit limit across all your credit products, is another essential factor to remember. Low credit utilization makes up 30% of your credit score. If you use more than 30% of your credit limit, your credit score may be negatively affected. For example, if you have a $1,000 credit limit, keep your card balance under $300.
Some credit cards offer valuable rewards for every purchase you make, such as cashback or rewards points. Higher-end credit cards may also provide unique travel-oriented benefits, like travel insurance or waived foreign transaction fees. However, it’s important to remember that these perks aren’t always offered for entry-level credit cards, like secured or student credit cards.
Credit cards also offer strong fraud protection. With most credit cards, cardholders aren’t held responsible if a lousy actor fraudulently uses the card to make unauthorized purchases. In contrast, victims of debit card fraud are afforded more limited legal protection. A cardholder is liable for debit card fraud ranging from $50 to an unlimited amount, depending on when they report the card lost or stolen.

Getting Your First Credit Card

Getting your first credit card can be a simple process. First, research the available credit cards and choose the one that best suits your needs and lifestyle. Then, fill out the online application, which usually requires your full legal name, address, contact details, employment and income information, Social Security number, and other details.

After submitting your application, you may receive an instant decision or be notified later. Sometimes, the card issuer may request additional information before making a decision. If you don’t receive an instant response, you’ll usually receive a letter in the mail a few days later.

Best First Credit Cards

Student or secured credit cards are great options if you’re over 18 and looking for your first credit card.

Secured Credit Cards

There are two types of credit cards: secured and unsecured. Secured credit cards require a deposit, which serves as collateral for purchases. The warranty protects issuers in case you don’t pay your bills. Secured cards are for consumers rebuilding or building credit for the first time.

Unsecured credit cards don’t have collateral. Most unsecured credit cards offer cash back, rewards, or sign-up bonuses.

Credit Cards for College Students

Student credit cards are designed specifically for college students and are typically unsecured. These cards generally have lower credit limits and fewer benefits than higher-end cash back or rewards cards, but they are more accessible for students.

Most student credit cards do not charge annual fees, and card issuers are often willing to accept applicants with a credit history. However, if you have a poor credit score, you may need help to be approved for a student credit card. In that case, a secured credit card may be your only option.

Article: Should You Get a Credit Card?

If you are confident in your ability to manage a credit card and want to establish credit, opening a credit card account might be a wise financial decision.

When you acquire a credit card, it is essential to keep track of your spending to avoid exceeding your budget and accumulating a balance that you cannot afford to pay. Always pay off your credit card balance in full and on time to prevent interest charges.