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Established Member
dadembk
Posts: 27
Registered: ‎05-28-2013
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When/How to help teen establish good credit?

In an effort to teach my oldest kid the need for good credit, responsible use and help him in the ways I wish someone had helped me.

When can I add him as an authorized user (he probably won't actually get to carry the card regularly)?
Is there a card that would help him by creating a relationship he could transition into his own relationship some day?
I'm not trying to "trick" the system and give some 15 year old some account that comes across as if he got it when he was 8 or something. Just when the day comes to look at student loans and stuff he'll already understand what's he's looking at.

He's 15, but if I can add him soon I will. I just didn't know if he needs to be 18 or it cold happen earlier.

Thanks in advance for any insight,
dadembk
AKA The Fictional Gardener
In the garden, then out, then in again, etc.
Currently
Fico 691 (Barclay), Fico 671 (Experian)
Goal
700 across the board


Valued Contributor
FocusedAndDetermined
Posts: 6,288
Registered: ‎01-05-2013
0

Re: When/How to help teen establish good credit?

You can check with your issuer(s) for any age requirements.  What cards do you have?  Not all will report an AU.  I know Chase and Discover will.

Valued Contributor
nicholasyud
Posts: 1,734
Registered: ‎08-13-2012
0

Re: When/How to help teen establish good credit?

Let he start using pre-paid credit card which he can load with his own money and teach him about financial reponsible........Then add him as AU when he 18 and older....


Starting Score: 560
Current Score: 748 Wishlist: CSP, Simply Cash, SPG, BOLD, INK, United MP,
Goal Score: 800


Walmart: 10k |Usaa: 8k|BCE: 9k| Amex: NSPL|Dis: 3.4k|Cap: 3.5k|CAP: 2k|CSP: 5k| Pen:4.5k

Established Contributor
CribDuchess
Posts: 640
Registered: ‎09-12-2011
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Re: When/How to help teen establish good credit?

I added my son to two of my Amex cards when he turned 15.  He is now 16 and I have since added him to my Discover, Freedom, CSP and Capital One cards.  I rotate them so he only ever has one or two in his wallet at any given time.  Right now he has the Freedom (for the 5% gas rewards) and the Capital One (1.5% cash back on all purchases) in his wallet.

 

Adding him as an AU/ACM served several purposes:

   1.  To establish credit in his name.

   2.  To teach him to use credit responsibly.

   3.  To earn cash back/rewards from his spending.  We used to give him cash, but as we all know here, you don't earn rewards when you spend cash!  :smileyhappy:

   4.  To keep track of where he is spending.  He gets annoyed by this last one since I will sometimes text him and ask him what did he just buy at X store?

 

He got his license in December, so it's especially nice for him to be able to gas up on his own and earn us gas rewards.

 

You certainly don't have to give the card(s) to your child, but if you want to teach them about use, it might be wise to allow them to carry one.  And the nice thing about Amex is that you can actually set a limit for them on their card since each ACM gets their own card number.

FICOs: TU08 841 6/3/14 per Wally; TU98 800 4/8/14; EQ04 769 6/8/14; EQ08 810 6/10/14; EX 805 6/12/14 per MyFICO

My Wallet: Amex Gold NPSL; Amex Optima Platinum $25K; Amex Costco TE $15K; Amex BCE $12K; BofA Visa $10.1K; Cap1 Quicksilver Visa Sig $10K; CSP $28.2K; Chase Freedom $13K; Citi Simplicity Visa $15.1K; Discover IT $24K; Fidelity Amex $15K; PenFed Plat Rewards Visa Sig $20K; Sallie Mae WMC $12.5K; US Bank Cash+ Visa Sig $24.5K; Walmart Discover $10K; Wells Fargo Rewards Visa Sig $14K
Established Member
dadembk
Posts: 27
Registered: ‎05-28-2013
0

Re: When/How to help teen establish good credit?

He has had a debit card with one of our credit unions for a couple years and been very responsible. I'm ready to help him move to the next step.

I have a Discover, BOA 123 Visa, CFE CU Visa, Amex Zync, PayPal MC, CapOne Cash Rewards and a few store cards.

So what do you think?
AKA The Fictional Gardener
In the garden, then out, then in again, etc.
Currently
Fico 691 (Barclay), Fico 671 (Experian)
Goal
700 across the board


Established Member
dadembk
Posts: 27
Registered: ‎05-28-2013
0

Re: When/How to help teen establish good credit?

That's good to know about the Amex and setting a limit for them. I really thought I just don't want him carrying it to school, but away from school I'm ok with. When he starts driving I'll probably just have him carry it all the time.

So really, I can add him now to Amex and maybe another to spread a little diversity to his new profile.

Thanks,
dadembk
AKA The Fictional Gardener
In the garden, then out, then in again, etc.
Currently
Fico 691 (Barclay), Fico 671 (Experian)
Goal
700 across the board


Established Contributor
CribDuchess
Posts: 640
Registered: ‎09-12-2011
0

Re: When/How to help teen establish good credit?


dadembk wrote:
He has had a debit card with one of our credit unions for a couple years and been very responsible. I'm ready to help him move to the next step.

I have a Discover, BOA 123 Visa, CFE CU Visa, Amex Zync, PayPal MC, CapOne Cash Rewards and a few store cards.

So what do you think?

I'd definitely add him to at least a couple of your cards.  I'd probably go with Discover & CapOne Cash Rewards, maybe even the BOA 123.  Then just let him have one at a time.  Thinking ahead to when he turns 16 and possibly gets his license, he can use the Discover and the BOA 123 for gas rewards.

 

You should probably also add him to your Amex card, mainly for future backdating purposes.  The backdating is always a YMMV sort of thing, but odds are good that when he goes to apply for his own Amex, he would get backdated to his ACM date.  Since it's a charge card, I probably wouldn't give it to him to use.  My son is an ACM on two of my revolving Amex cards.

FICOs: TU08 841 6/3/14 per Wally; TU98 800 4/8/14; EQ04 769 6/8/14; EQ08 810 6/10/14; EX 805 6/12/14 per MyFICO

My Wallet: Amex Gold NPSL; Amex Optima Platinum $25K; Amex Costco TE $15K; Amex BCE $12K; BofA Visa $10.1K; Cap1 Quicksilver Visa Sig $10K; CSP $28.2K; Chase Freedom $13K; Citi Simplicity Visa $15.1K; Discover IT $24K; Fidelity Amex $15K; PenFed Plat Rewards Visa Sig $20K; Sallie Mae WMC $12.5K; US Bank Cash+ Visa Sig $24.5K; Walmart Discover $10K; Wells Fargo Rewards Visa Sig $14K
Established Contributor
CribDuchess
Posts: 640
Registered: ‎09-12-2011
0

Re: When/How to help teen establish good credit?


dadembk wrote:
That's good to know about the Amex and setting a limit for them. I really thought I just don't want him carrying it to school, but away from school I'm ok with. When he starts driving I'll probably just have him carry it all the time.

So really, I can add him now to Amex and maybe another to spread a little diversity to his new profile.

Thanks,
dadembk

You have me curious as to whether you can set a limit on the Amex Zync since it is a charge card rather than a revolver.  I do not know if you can set a limit like you can with Amex's revolvers.  I wonder if anyone here knows whether you can?  That would definitely be a nice perk if you can limit him on the Zync.

FICOs: TU08 841 6/3/14 per Wally; TU98 800 4/8/14; EQ04 769 6/8/14; EQ08 810 6/10/14; EX 805 6/12/14 per MyFICO

My Wallet: Amex Gold NPSL; Amex Optima Platinum $25K; Amex Costco TE $15K; Amex BCE $12K; BofA Visa $10.1K; Cap1 Quicksilver Visa Sig $10K; CSP $28.2K; Chase Freedom $13K; Citi Simplicity Visa $15.1K; Discover IT $24K; Fidelity Amex $15K; PenFed Plat Rewards Visa Sig $20K; Sallie Mae WMC $12.5K; US Bank Cash+ Visa Sig $24.5K; Walmart Discover $10K; Wells Fargo Rewards Visa Sig $14K
Moderator
09Lexie
Posts: 25,373
Registered: ‎09-13-2012
0

Re: When/How to help teen establish good credit?

[ Edited ]
My parents put me on their store cc's and one of their bank cc's back when the dinosaurs roamed the Earth. When I left for college, I had a few years of history. I did the same to my kids.

I think the Amex and one other cc (visa/MC) would be a good idea.
Valued Contributor
armbenderc
Posts: 1,339
Registered: ‎09-11-2012
0

Re: When/How to help teen establish good credit?


dadembk wrote:
In an effort to teach my oldest kid the need for good credit, responsible use and help him in the ways I wish someone had helped me.

When can I add him as an authorized user (he probably won't actually get to carry the card regularly)?
Is there a card that would help him by creating a relationship he could transition into his own relationship some day?
I'm not trying to "trick" the system and give some 15 year old some account that comes across as if he got it when he was 8 or something. Just when the day comes to look at student loans and stuff he'll already understand what's he's looking at.

He's 15, but if I can add him soon I will. I just didn't know if he needs to be 18 or it cold happen earlier.

Thanks in advance for any insight,
dadembk

I would add him now but not giving him the card(s). I know Citi, Chase, Discover will report to CRs if living in same address and is your spouse or family.

 

When he turns 18, he can apply for his own card such as CAP1 or BofA 99/500 secured card and let him learn the responsibility of credit. 

 

Meanwhile, he is still on your AU and enjoying util padding as well as AAOA. If he screws up his BofA or cap1, hopefully you can keep track before he messed it up and prevent that and have a nice long talk with him.

2013 Approvals: Discover IT - 3/1, Amex BCE - 3/4, CSP - 5/4, Barclay Ring - 6/12, BoA Privileges Cash - 6/27, Citi TY Preferred - 8/6, OCCU Duck - 11/4, USBank (Cash+) - 11/22, Wells Fargo - 12/21, Nordstrom - 12/29

12/19/2013, $100k+ Available Credit. Total Util: 0-1%

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