Helping son establish credit.

[Anonymous]

My son just turned 18 and I made him an authorized user to all my cards. I'm not completely sure about the FICO model but should I make him apply for a lot of credit cards right now so that his average age of credit stays strong 10 or 20 years later? To y'all who think it gives him incentive to abuse, I changed the mailing address to a PO BOX he doesn't have access to and he doesn't know that I'm applying credit for him or made him an authorized user. Also the only card I let him use is a prepaid Amex which I load and monitor on a monthly basis.

[OmarGB9]

Probably best to just start with a few cards; especially since many lenders (chase, Barclays, Amex) like to seem some history established first before extending credit.

[Anonymous]

Lol, that's pretty nice of you, but also shady of you to hide the CC from your child. I would personally want to know if my parent had one. You should probably let him know in case he checks his credit report one day and notices there are CCs under his name.

Per my signature, I applied for three cards once I turned 18. I definitely think you should apply for at least two cards in order to strengthen his individual credit history. 

Disclaimer: This is just my two cents.

[Anonymous]

Gotta say, I kind of agree. I wouldn't call it shady, per se, but not making him part of the experience is not just hiding very important information that will be, legally, under his name and responsibility--it's also not going to help him learn anything.

I'm sure you've gotten a good idea of his spending patterns with the pre-paid Amex. You mentioned that he's now AU on all of your cards as well. IIRC, Amex allows you to set a specific spending limit with each AU. If I were you, I would allow him to have an AU card with your Amex, but I would have his spending limit to be quite low (or similar to what he usually gets on the prepaid, whichever makes you more comfortable), to sort of 'test' his ability to hold a CC, since holding a CC is so much different than a debit, and for some young people, the mere availability to money that a CC provides is an incentive to spend more. Teach him how to make payments every month, and how to keep track of his spending (if you haven't done so already). Let him get used to this process.

Meanwhile, I'd sit down with him and see what sort of spending he does, in order to truly figure out what cards will be good for him. Being AU on cards with very low-to-no balance (compared to CL) and good AoA will probably up his scores enough so that, if it goes through auto-approval, he can get some very good cards. The best cards for him would probably be 2-3 that he would honestly use, and use well. There would be little point of cards he won't be able to use for the long term, because later on, he'd probably be stuck with cards that, although keeping his AAoA up, aren't of any use to him.

Usually, a nice cash-back card does very well for young people and will serve a use as he gets older, unless he does a lot of travelling, in which case a travel card does well too. Anyway, a lot of cards isn't really a need, as 2-3 will usually be enough to generate a FICO score. I have 2, which was enough, but I also have a few student loans on my belt as well.

After he's opened up his own cards, you can by all means take your Amex AU card back from him--heck, you can even remove him as an AU from all of your cards if you feel like it. But yeah, while he doesn't necessarily need to know he's an AU on your cards, please go through any decisions about his credit with him first, to reinforce a trusting environment when it comes to finances. He'll be more willing, then, to tell you or ask for advice if anything is going financially awry, or if he's unsure about something.

Good luck to both of you!

[Anonymous]

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@Anonymous wrote:
My son just turned 18 and I made him an authorized user to all my cards. I'm not completely sure about the FICO model but should I make him apply for a lot of credit cards right now so that his average age of credit stays strong 10 or 20 years later? To y'all who think it gives him incentive to abuse, I changed the mailing address to a PO BOX he doesn't have access to and he doesn't know that I'm applying credit for him or made him an authorized user. Also the only card I let him use is a prepaid Amex which I load and monitor on a monthly basis.

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Are you saying that you would apply for new credit with his information without his consent? If so, my opinion would be no. This would be an abuse of trust. Just because you have access to his personal information, does not mean that you may use it, especially since he is (presumably) now a legal adult.

[Anonymous]

Yeah I would have to say I agree with some of the other posts, I would try to avoid signing up for any sort of account without his consent.

Instead, try teaching him why applying for lines of credit is a good idea; this sets him up for success in the future.

I never had parents to teach me how to do this, but I am glad I found my way on my own.

Not saying your son would do something like this, but when someone doesn't truly grasp why having good credit is so important, they often hurt themselves at a young age and later come to regret it. And I am just saying this after seeing half of my friends do this, then a few years later complaining about it when the damage is already done and they are forced to put down large deposits on everything.

I would make him try for an Amex, to get his foot in the door, as everyone says. And then some other cards with other banks like Chase and CapOne to add some variety. Cards like the SallieMae, Freedom and Amex Everyday Cash are cards nearly everyone could find useful.

I try to view adding people as AU as a 'boost'. Its a nice short term trick to push their scores up, so they can try for better credit cards; then remove them at a later date because it doesn't make much sense to keep them on as an AU forever. Their scores would dip a little but by then they would already have the cards they need and a nice bump in credit scores too.

You're heart is in the right place though, trying your best to set your kid up for success.

[zerbherb]

put him a local union card with a high credit limit. Look at how far that took me. Now i have two prime cards on my own, only 8 months into my credit life.

[Anonymous]

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@zerbherb wrote:

put him a local union card with a high credit limit. Look at how far that took me. Now i have two prime cards on my own, only 8 months into my credit life.

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I personally would skip CUs all together (as I did myself) unless one of the cards have good cash back. 

Cap One journey is a great card for people who have no credit experience, and can be bumped to a QS later on. 

Discover it student would be a nice option to pair it with, or even freedom - both with a $500 limit. 

[Callandra]

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@Anonymous wrote:
My son just turned 18 and I made him an authorized user to all my cards. I'm not completely sure about the FICO model but should I make him apply for a lot of credit cards right now so that his average age of credit stays strong 10 or 20 years later? To y'all who think it gives him incentive to abuse, I changed the mailing address to a PO BOX he doesn't have access to and he doesn't know that I'm applying credit for him or made him an authorized user. Also the only card I let him use is a prepaid Amex which I load and monitor on a monthly basis.

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Wait, you changed his mailing address and you want apply for cards in his name for him? You realize that is fraud, right? He can go to the police and you can get in real trouble for that. I'm not trying to be rude, but do NOT do that. 

It's fine if you want to make him an authorized user to help him but is he ready for credit? Have you sat down and discussed it with him? If you want, have a talk with him about the advantages of credit and why he will need it in the future. And IF he's ready, then maybe apply for a card or two together with his knowledge/consent (look at student cards if he's a student or secured cards). Don't try to rush him into it or push it because if he messes up now, it will take a long time to fix. You obviously want to help him which is great but sometimes people need to be ready at their own pace. Good luck to him and you. 

[Anonymous]

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@Callandra wrote:

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@Anonymous wrote:
My son just turned 18 and I made him an authorized user to all my cards. I'm not completely sure about the FICO model but should I make him apply for a lot of credit cards right now so that his average age of credit stays strong 10 or 20 years later? To y'all who think it gives him incentive to abuse, I changed the mailing address to a PO BOX he doesn't have access to and he doesn't know that I'm applying credit for him or made him an authorized user. Also the only card I let him use is a prepaid Amex which I load and monitor on a monthly basis.

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Wait, you changed his mailing address and you want apply for cards in his name for him? You realize that is fraud, right? He can go to the police and you can get in real trouble for that. I'm not trying to be rude, but do NOT do that. 

It's fine if you want to make him an authorized user to help him but is he ready for credit? Have you sat down and discussed it with him? If you want, have a talk with him about the advantages of credit and why he will need it in the future. And IF he's ready, then maybe apply for a card or two together with his knowledge/consent (look at student cards if he's a student or secured cards). Don't try to rush him into it or push it because if he messes up now, it will take a long time to fix. You obviously want to help him which is great but sometimes people need to be ready at their own pace. Good luck to him and you. 

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+1. Agreed, Callandra. Op, you cannot apply for credit in another person's name without their knowledge nor change their address. That is fraud, regardless of how good your intentions may be.

The way to have your son learn responsible credit behavior is to first discuss with him whether he wants you to help him, and to respect it and let him handle things his way if he says no. Part of letting him be a grown up adult.