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Regular Contributor
wa3more
Posts: 125
Registered: ‎10-05-2012
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Re: At what age do you make your child an AU?

Let kids and young adults manage cash and debit cards first. Let them show they can stick to a budget.

 

I would feel uncomfortable pulling a teen as an AU or would avoid cosigning on anything. let them do it on their own when they are old and demostrated disipline.

 

Why introduce them to debt at such an early age . "The borrower is a slave to the creditor ". there is truth to this old saying.

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Revelate
Posts: 9,477
Registered: ‎12-30-2011
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Re: At what age do you make your child an AU?

[ Edited ]

my-own-fico wrote:

chiquita203 wrote:

Got my 16 yo daughter the AMX gold.  This has several positives for our situation.

1. Build positive and aging credit history since she'll have her own CC# and "member since."  

2. No more cash allowance since she'll be using this for ALL her personal, social, and school expenses.  Also can use for her gas money and medical expenses such as copays and out of pocket costs.

3. Frees me up a bit cuz I can send her for my errands and grocery runs.

4. Faster point accumulation!!!!

5. Able to set limits as needed but have not had to since she received her card 10 months ago.

6. Able to check charges daily to avoid costly surprises.

this might not be so ideal for everyone...great for us.


 

Amex charge cards are the one AU exception (15 years instead of 18). See How early can I add my kids as AUs?
1) That certainly is a nice initial perk.
2) I don’t know if EVERYONE takes Amex…
3-6) Benefits mostly you!


Generally speaking, if you have an Amex of any type, it is completely in your child's (and your in my estimation) best interests to add them as an AU (ACM for Amex) as soon as possible.

 

That said: when we're just talking FICO purposes, Amex is the one exception; as my-own-fico correctly points out, adding an AU from likely every other lender now vs. later does not change the FICO benefit at all as an Amex ACM reports as a completely seperate, individual tradeline whereas the rest don't.

 

If in fantasy land I create a credit card product, I am absolutely duplicating Amex's model on that one (seperate tradeline with seperate account number and seperate limit): so many benefits, reduces the vast majority of possible abuses, and is simply brilliant for the situations where you likely should be handing your kid a credit card (if only Amex were as accepted in smaller markets as Visa / MC) vis a vis another posters' DD off to places like Maryland for US Youth Nationals next week if you're not going with them.  

 

We're not talking risking the $25K Chase tradeline or whatever, if you don't have an Amex, reduce a limit on a card you don't care about or get another one: worst case I'll go get a $500 Freedom or Discover at some point in the future for the theoretical kid but as I expect to have an Amex throughout the rest of my financial life for other reasons that'll be absolutely more than acceptable for the 90-95%, and I don't know that the pricing disparity will remain either in which case merchants will all sign up for Amex.  Different topic that haha.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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mikezymes12
Posts: 4
Registered: ‎07-19-2014
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Re: At what age do you make your child an AU?

I always gave my kids the card never cash because i could see and they knew they would be in trouble if they spent more then we said:smileywink: I think they were around 13

Established Member
Misses_November
Posts: 37
Registered: ‎06-08-2010
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Re: At what age do you make your child an AU?

Many of you seem to be under the impression that adding them as an AU means you are giving them the card and they are allowed to spend at their own free will.  That's not the case!  Adding them as an AU simply means it will report on their credit report- which in turn starts their credit history!  As a parent you can keep the card in your possession at all times.  I think its a great idea.

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youdontkillmoney
Posts: 419
Registered: ‎04-03-2014
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Re: At what age do you make your child an AU?


Misses_November wrote:

Many of you seem to be under the impression that adding them as an AU means you are giving them the card and they are allowed to spend at their own free will.  That's not the case!  Adding them as an AU simply means it will report on their credit report- which in turn starts their credit history!  As a parent you can keep the card in your possession at all times.  I think its a great idea.


^^^^

That is a good thought, to activate the AU and keep the card in your possession and perhaps use it a few times a year to build credit. What a loving and wise mom!

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tashia729
Posts: 30
Registered: ‎03-07-2008
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Re: At what age do you make your child an AU?

We opened up a checking account for my son when he was 14 yr just to get him started on learning about money management.  However, it wasn't until he got his drivers license at 16 that we gave him access to his debit card.  We even had him enroll his account in online banking (we already have it linked to our online banking as the adult signees on the account) on his own to help him get the feel of how to check his balance, and manage his money online.

 

I recently made him an AU on my Old Navy Visa card.  Honestly, it initially was a convenience factor.  We have four kids - my son is the oldest - and it just got too difficult to round up all of the kids at the same time for clothes shoping with everyone's schedules.  I figured with his own card (and because he has his own car) he can shop for clothes without us; plus since its co-branded, he can use it for other outside purchases as needed.  The interesting thing is that when I initially gave it to him, he asked how much was "on the card" because he assumed that it was similar to the debit card he had and it only had a certain amount on it.  I took that teachable moment to expand on his "credit education" and explain to him how true credit cards work, as opposed to debit cards.  I've never told him the actual credit limit ($4000.00 limit) because I don't feel that he needs to know that right now.   Has nothing to do with him going on a shopping spree because he never uses that card unless I tell him to, or unless he specifically asks because his bank account is low on funds (his purchases are always food or gas related, typical teenager).  It's because I am avoiding the "teenage chatter among friends" about who has what credit cards with what limits.   But if I didn't trust him, he wouldn't have it.

 

He starts his first full time job next week, so that is the next step in our money management education, payroll taxes, budgets, etc.  I will eventually add him on to our AMEX before he leaves for college, because he will have had a full two years of working, and I know the value of the AAOA (my AMEX membership date is 1989, courtesy of advice I received on these boards about "backdating" for AMEX) and hopefully he will also open up his own AMEX account in the future.  We plan on doing the same thing with the remaining three kids too! 

 

Bottom line, it's not just about teaching financial literacy, it's also about teaching independent life skills.  Had my parents done that with me - the financial portion - I could have avoided MAJOR credit care nightmares that I experienced that took a long time to clean up.

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Revelate
Posts: 9,477
Registered: ‎12-30-2011
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Re: At what age do you make your child an AU?

Tashia: wonderful plan, but I would suggest adding him to the Amex as an ACM as soon as possible really with how backdating works as currently it'll backdate to when he was added as an ACM, not to your member date.   

 

Don't have to give him the card, but to point out, Amex likely has the best feature set out of the AU cards because you can set a spending limit on it: on the assumption I have kids, I'd be doing similar to what you've done, but I'd be giving them the Amex as the typical spender just in case a "teachable" moment happens, it won't potentially cost more than it needs to.

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Valued Member
tashia729
Posts: 30
Registered: ‎03-07-2008
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Re: At what age do you make your child an AU?

I had completely forgotten about how AmEx has that preset spending limit!  That is a good idea, and I would give it to him to carry.  Something for my weekend "to-do" list!  Thanks for the suggestion!

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bdhu2001
Posts: 482
Registered: ‎04-24-2014
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Re: At what age do you make your child an AU?

My daughter was 31 and my son was 37.  I've let them use my cards, on Internet or phone.  Given them gas cards, but I've never added them as AUs until now (reading myFICO forums).  I didn't realize it would help them until now and now it doesn't help as much.

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+
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bdhu2001
Posts: 482
Registered: ‎04-24-2014
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Re: At what age do you make your child an AU?


OHWWCB wrote:

I was just telling my mother the other day that when I have kids, I'm adding them as AU's early and teaching them about credit scores and money. No one ever taught me that. I was WILDLY irresponsible with money in college and shortly after. I overdrafted my bank account every single week. I haven't written a check in years because I got blacklisted from writing bad checks. It was bad. As I got older I always had a good income but I constantly found myself barely treading water because of overdraft fees and high interest. I'm 32 years old now and it has only been in the last year that I realized how ridiculous my situation was. A single person who makes over 100k a year with no kids should not be living paycheck to paycheck. 

 

I want to save my hypothetical kids from the mistakes I made. They'll probably be AU's at 13.


I'd use momofbeth's idead of getting them a Bluebird card and puttling using it for allowances, etc.  I plan on doing that as soon as I have grand-babies that are old enough to go to the store and shop.  

You have fictitious kids; I have fictitious grand-babies.

Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+

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