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Credit cards for your kids?

Valued Contributor

Re: Credit cards for your kids?

Check out USAA teen checking.

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Established Contributor

Re: Credit cards for your kids?


jake619 wrote:

distantarray wrote:

when I get a child I'm adding the kid to my amex as legally allowed lol, I wonder if they would let me add them as a new born? Smiley Wink  this way when they turn 18 they got 18 years of backdating Smiley Happy


I would've tried it with my 4yo but Amex minimum AU age is 15.  As an aside, where do you plan on "getting" your kid?  Are they any sales now?Smiley Surprised


In China you can get a good little girl if you use a Amex Platinum, and use the rewards to redeem for the flight back Smiley Happy    jk   (I"m Asian btw so before anyone says it's racist Smiley Tongue)


total credit limits $108,400 Credit scores Ex 728 EQ 738 TU 758
Super Contributor

Re: Credit cards for your kids?

If you have an american express card, you can actually add your children as AUs(or additional card members) and they will get their own online account, and you can set spending limits on their cards.


Moderator Emeritus

Re: Credit cards for your kids?

After my app spree last August I was approved for a bunch of nice cards with good limits, so I didn't have much of a need for my rebuiler level  Cap1 Cash Rewards card. But instead of closing it, I put my DD on as an AU. She's in her early 20s, goes to school and works part-time. She's using it mostly for gas and groceries, so I get 2% back on most of her purchases, which more than covers the $39 AF. It still has the $750 toy limit, so I've been able to see how she does with using it without risk of things getting out of control. I'm pleased to say that she's been very responsible with it so far, so sometime this year I'm going to try to get Cap1 to waive the AF and increase the limit -- I'll try contacting the EO if necessary -- as I'm starting to feel more and more comfortable with her usage. It's been a win-win for us, as I've been gaining additional history on the account, and she's inherited over 2 years of clean history, is learning what's involved in managing a credit card, and will be in good shape to apply for one of her own when she feels ready to fly solo. Smiley Happy


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Contributor

Re: Credit cards for your kids?

I added my 17yr old DD as an authorized user to my Cap 1 and Discover cards.  I wanted to start her having a credit history but more importantly I wanted to make sure she had $$ available to her for emergencies since she is driving now. She is now 19 and in college and adding her has helped with the loan needed for college - the interest salliemae is charging is not bad and the loan is now under her own name.  I plan on doing the same in a few months when my other daughter turns 17.

 

 


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Valued Member

Re: Credit cards for your kids?

Credit Card?? Heck no. What we did for our son (16) was to open a checking account in his name with an associated debit card. When he wants to spend money i.e go to the movies with the GF or friends, or eat out etc. he uses HIS debit card and it comes from HIS money. He earns that money through various jobs and an allowence that he gets only when he does specific chores.

No work = no money.

Teach your kid how to manage cash before you teach him how to manage credit or debt. 

 

Just my 2 cents

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Frequent Contributor

Re: Credit cards for your kids?

Yes its better to teach them about money first. If you dont, they could app and get cards with pretty decent limits and go crazy. I personally did not do anything right when it came to money when I was 18. I got a credit card and maxed it out and didnt pay. I went on a cash only basis and have been that way for years up until 2010. Even though I had gotten to the point where I was managing the money I made, I still ran up my credit cards and kept balances up unitl now. I knew better too. Credit cards can be real trouble unless you are very strict with them. Just teach them right and not just teach them how to be able to extend yourself beyond your means through the use of credit. Its not that important really anyway. 


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Valued Contributor

Re: Credit cards for your kids?


Jkusa wrote:

Credit Card?? Heck no. What we did for our son (16) was to open a checking account in his name with an associated debit card. When he wants to spend money i.e go to the movies with the GF or friends, or eat out etc. he uses HIS debit card and it comes from HIS money. He earns that money through various jobs and an allowence that he gets only when he does specific chores.

No work = no money.

Teach your kid how to manage cash before you teach him how to manage credit or debt. 

 

Just my 2 cents


That's exactly how we do it.  Our 13 year old has a youth savings with USAA and an ATM card that goes with it.  I told him if he shows responsible use of it for a year, I'll let him get the Youth checking with a Visa Debit.  He earns his own money, and spends most of it but keeps decent track so far.  It has all sorts of parental controls and won't let them overdraft, so I consider it a good way to start.

 

My 3 year old gets quarters for extra chores, and saves them in a little bank.  He spends most of his money on matchbox cars, despite having intended to save for a "real car".  I know the feeling...

 

I disagree with adding kids as an AU to improve their credit score.  I would prefer my kids to be denied for anything except the most basic student cards, until they learn how to manage credit.  Once they reach a point where they have income and experience with credit, I will probably help them with some AU accounts.  Until then I'm just increasing their exposure to risk of major default.  

 

I wouldn't want them to have a huge credit line at 19, and end up with a judgement haunting them until 30.  Being restricted to low limit student cards is like credit training wheels with a helmet and elbow pads.  If they fall, there will be no major damage.  Putting them as an AU on a bunch of high limit old accounts is like handing them keys to a crotch rocket when they've never even ridden a bike.  

 

I just think it's better to ease into something that important.

3-26-15: FICO EXP: 828 - EQU:820 - TRAN: 828 - AVG: 825 +275 points from JUN 2008 - MY CREDIT JOURNAL

Regular Contributor

Re: Credit cards for your kids?

+1  BAM!!   Jkusa:

 

"..No work = no money.  Smiley Wink

Teach your kid how to manage cash before you teach him how to manage credit or debt."..

________________________________________________________________________________________________
I’ve found that I can "charge" WHATEVER I want…. Just not all at THE SAME TIME!*Last CC App 07/2010*
Frequent Contributor

Re: Credit cards for your kids?

I just wanted to point out the benefit of being AU does not REQUIRE the youth actually use the card. There are gains to be realized by just being listed as an AU.

I recognize this thread is about teens and CC's but I thought this point may have slipped by. Perhaps the combination of a cash-backed card to teach the "when its gone its gone" principle while the AU cooks in parallel. When they display responsible actions and are ready to use credit they will have a nice profile with little risk.

GangnamFICO wrote:

Because the chicks dig it when I throw down the card to the waiter and...it comes in handy if I'm short on cash until payday and need a short spot. AMEX gets the booty, and that's important when you're a Pirate.


Minor vulgarity edit --Rev