topic Re: Children as Authorized Users in General Credit Topics

Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 12:15:17 GMT

I know someone who’s score is riding in the 800s largely in part due to an authorized user account from his parents which makes his credit profile 10 years older than his age. The question comes to mind now, what about for my kids?

Is there a minimum age to add authorized users? I have a 5 year old and this site leads me to believe they can be an authorized user https://wallethub.com/answers/minimum-age-authorized-user-credit-card-2140663918/

If they can’t handle it properly in the teenage years just remove them as an authorized user, correct? Simple as that?

I understand some Credit Card will backdate history with Authorized User accounts, which Credit Cards do that?

— Above all, is this a good strategy? What would you do to get your children hitting the ground running when they turn 18?

Re: Children as Authorized Users

Cred4All — Mon, 22 Oct 2018 12:22:09 GMT

My 2 cents. I can see a 14-17yr old having one for times they are out with friends, on a vacation with family, just got a driver's license etc. and need it for emergencies or minimal usage. That obviously would help benefit them in the long run and start them off on the right track to a solid credit profile, history, and financial education.

On the flip side, although it would appear to be possible based on some information online, I would suspect adding an AU below those ages is a risk. I say that because there are times where any adult has issues, unforseen circumstances, etc. and one slip of the credit belt ourselves and you inadvertently damage a youngsters credit profile. Again, if that's even possible per the site's data .

Re: Children as Authorized Users

SBR249 — Mon, 22 Oct 2018 12:38:37 GMT

I don't think there are legal restrictions on how young an AU can be. However, different card issuers can impose minimum age limits. Ultimately while a good credit score is important, it's the overall credit profile lenders look at in making credit decisions. An AU, no matter how great the underlying account may be can only get you so far even if it were backdated to the first Jamestown colonies with a CL of $LOL.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 12:40:09 GMT

@Cred4All wrote:
My 2 cents. I can see a 14-17yr old having one for times they are out with friends, on a vacation with family, just got a driver's license etc. and need it for emergencies or minimal usage. That obviously would help benefit them in the long run and start them off on the right track to a solid credit profile, history, and financial education.

On the flip side, although it would appear to be possible based on some information online, I would suspect adding an AU below those ages is a risk. I say that because there are times where any adult has issues, unforseen circumstances, etc. and one slip of the credit belt ourselves and you inadvertently damage a youngsters credit profile. Again, if that's even possible per the site's data .

Yea I know some issuers will report old history on new authorized user accounts so if that is still the case in 10 years then that would be great because it wouldn't matter if they were a user now or in the future. The risk of damaging credit by some dumb move is definitely a risk. We don't carry a balance and have never paid a cent of interest and have family finacially well off enough that would help us in a financial crisis situation. I have never had a single derog on my account but I do always over-stress about possibly screwing up and missing paying a bill.

We're all human and prone to mistakes so good point there.

Re: Children as Authorized Users

SBR249 — Mon, 22 Oct 2018 12:50:44 GMT

Another thing is that for an issuer that backdates an AU TL, there's essentially no benefit to adding your 5 y/o vs. adding them when they are 16 y/o. The account opening date and history will essentially be the same in both cases.

But on the flip side, you should take comfort in the fact that AUs are not contractually responsible for the debts on the account. Therefore, if you slip up and get a derog, you can usually remove the AU and file disputes with the CRAs to have all records of the TL removed from their credit reports as they were never responsible for the account. There should not be lasting damage as long as you take action to clean up their CRs in a timely fashion.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 14:35:02 GMT

OP - I would do it. Add them and no one is saying you ever need to give them a card - I would stick it in a sock drawer. But while the credit score is merely a number - it is the credit file that ultilmately determines approvals and credit line. Some banks do not factor in AU accounts in their internal decision making process at all.

But providing you teach your kids to manage their finances properly - I see no down side to this at all.

Re: Children as Authorized Users

K-in-Boston — Mon, 22 Oct 2018 15:19:57 GMT

There are a number of very good reasons to add children to accounts, setting them up for a good credit score in the future is only one good one. As far as backdating, all lenders that I am aware of do this with one exception - American Express, who for the past 3 years will report the account opening date as the date that the AU was added. For premium cards like the Platinum Card from American Express, this can be a no-brainer as benefits like lounge access and roadside assistance extend to authorized users. Amex very recently dropped their minimum age from 15 to 13, various lenders have policies that an AU must be somewhere between 13 and 18, and there are a number of lenders who have no age requirement (Chase and Bank of America come to mind, which both of my kids will be added to in a few years). I think it's a great replacement for cash allowances. I'm not so old that I don't remember how I spent cash when I was a kid. LOL At least this way when you see $50 liquor store charges from your 15 year-old from the night they "went to the movies with their friends," that presents an opportunity for discussion.

Re: Children as Authorized Users

sdsoccerdad — Mon, 22 Oct 2018 17:13:31 GMT

I have two kids. Ages 15 and 17. I added them to a few cards that do not get much use just to start building their credit. They use the cards mainly for gas or when they go out. I also added them to one of my biz cards since that one does not get reported to the CR's.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 17:39:03 GMT

I have personally benefitted from this strategy. My oldest TL is nearly 10 years older than I am. Obviously different lenders view this differently, but it doesn't hurt to have that on my reports. While that's nice, its biggest impact came when applying for my first card... I didn't know what I was doing and applied for a BCE with nothing but the aforementioned Amex AU on my file. I was (in hindsight, shockingly) approved. I know Amex is kind to thin files (not sure about that thin) but I really think the AU relationship drove my acceptance.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 20:05:24 GMT

If you decide to add, I don't think you should give the 5 year old a physical card.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 20:14:57 GMT

Typically the minimum age is 13 with most CCC, though there are a few who don't require an age. You'd have to do your homework to see if the cards you have fit your desire. But there is no real benefit to add them at age 5 as opposd to 13. When they're not even going to utilze the ability until about 7 years later.

I just wished that more CCC offered spending limits on authorised users besides Amex.

Re: Children as Authorized Users

Anonymous — Mon, 22 Oct 2018 22:06:03 GMT

This is something I’ve also been looking at. My two older kids are 15 and 14. My thought is to make them both AUs on my Quicksilver. It’s a steps card with a $500 limit that’s unlikely to grow much. I plan to have cards issued in their names and to keep those cards in my lockbox. When they will be going somewhere that having a card is wise, I’ll give them their cards and a limit to spending. Both are good about things like that and I don’t worry about them blowing off the limit I give and spending more, especially since I’ll show them how the purchase alerts show up on my phone almost instantly. Being a lower limit card, it’d be hard for them to get me into debt trouble, and as the card by next spring will be basically a SD card with only a Netflix subscription, there’ll always be plenty of room for use on it.

Re: Children as Authorized Users

digitek — Mon, 22 Oct 2018 22:09:36 GMT

I've been meaning to to for a bit, but this thread just reminded me and I added my 10 year old and 2 year old as AU's to Chase Amazon and Citi DC. Both asked for age and had no problem adding them.

I'll probably chop the cards up when they get here. Hopefully it can help them in the future, but I can't really see a reason not to.

Thanks OP

Re: Children as Authorized Users

Anonymous — Tue, 23 Oct 2018 02:16:31 GMT

Our 13 yo is an AU to DH’s Amex Plat. She has a $500 limit and only gets the card in very controlled circumstances. We got her the card for the Global Entry credit & an extra lounge entry for some trips we took this summer.

Re: Children as Authorized Users

matrix12 — Tue, 23 Oct 2018 03:32:21 GMT

I added my kids (ages 13 and 16) as AU on my AMEX gold and set up low spending alerts for both of them so I can keep tabs. They only get the cards when they are going to movies, lunch, etc. with friends and have to turn them in as soon as they get home. They have been very responsible in the past (they even ask if they can spend $0.99 to download a song from iTunes), so I decided to trust them with a card.

There were a few reasons I set them up:

1) It is a convenience for me since I typically don't carry much cash and I can keep track of what they are spending and more importantly where.

2) AMEX lists each AU charges separately on the statement. Each month, I sit down with them and review their charges to show them how quickly spending can add up over the course of a month. I want to demonstrate to them how it can be easy to lose track of spending when it is not cash coming out of a bank account. Hopefully, this will help to establish some fiscal responsibility with them.

3) As previously mentioned, it will help them establish a good history to give them a little head start when they turn 18.

4) AMEX offered me 5,000 bonus MR points for each AU I set up (after they spent $500 in 3 months). I'd like to say I came up with the idea on my own, but honestly, I would not have even thought of the above reasons if AMEX hadn't teased me with the bonus points.

Re: Children as Authorized Users

jdbkiang — Tue, 23 Oct 2018 05:54:10 GMT

There are really no downsides to doing this either. Any mistakes the primary cardholders make can be neutralized by simply removing the AU's. Regardless, unless it's Amex, most other companies will backdate the history, so adding them at the age of 5 vs 15 doesn't make much of a difference. The ability to set AU limits is very convenient and a good way to teach kids about money as well. Additionally, you also don't have to give them the card anyway, so that limits risk too, if you have a very generous child...

Re: Children as Authorized Users

josh1 — Tue, 23 Oct 2018 05:44:03 GMT

I was added as an authorized user on my parents CapOne QS, and I know they have a minimum age (14 maybe?). Really you need to base it off your opinion. If you believe they are mature enough and understand money, I would say it is safe. Just make sure you talk it through with them and make them understand it isn't just free money. Make sure you check your balance every once and a while, which I mean I always suggest anyways, and if they do something bad you can take the card away.

My parents allowed unlimited spending on my card, but I had to pay back anything that was for me (so they would pay for food etc) with that being said though I have always been very careful with money. So I recommend giving it to them when you believe they can handle it, talk it through with them, monitor your account, make them pay if they purchase something they shouldn't have, and if they abuse it just take it away and put it in the sock drawer.

Re: Children as Authorized Users

msm859 — Tue, 23 Oct 2018 06:24:26 GMT

I added my granddaughter when she was 9 years old. Chase Ritz Carlton card had a deal extra 10,000 points for adding an authorized user. I keep the card except when we travel then I give it to her. What is amazing is no one asks her for any id. One lady did ask her if it was hers and she said yes and then rang it up.

Re: Children as Authorized Users

Anonymous — Tue, 23 Oct 2018 19:15:16 GMT

That's one issue that can arise, as most kids that young do not haev ID. But most places don't even bother to ask anymore anyways.

Re: Children as Authorized Users

imaximous — Tue, 23 Oct 2018 19:34:16 GMT

I've added my kids to my BofA cards. Not because it's going to help them anytime soon, but because of the Museum benefit. For those who care and didn't know, every first weekend of the month, BofA offers "Museums on Us." There's a list of places you can visit and not pay if you're a BofA customer. In my area (NY and NJ), there are a bunch of participating museums and it saves me a bunch of money.