Beginner friendly cards for 18 yr old

[Citylights18]

Just don't try to push him into a baller card like the AMEX Platinum or Chase Sapphire Reseve and give away his salary on the Annual Fee.

Cash back is good way to go. Maybe even consider credit one as they have high cash back and low barrier to entry. Play around with the Platinum X5 visa from Credit One.

[CreditAggie]

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@GZG wrote:

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@Atonswife wrote:

Hey all!!

It's been awhile but I need some advice.

My son is 18 years (will be 19 this summer) and we are starting his credit journey. He got a pre-approval through Cap One and also Discover. Once we knew he was pre-approved, my husband sent him a referral link for Cap One and he was approved for the platinum mc with $1k limit. Discover pre-approved for a secured card but when my husband sent the referral link, my son was approved for a regular unsecured Discover IT card also with a $1k limit which we found odd but definitely grateful.

Now i'm looking for one more card to establish his 3 tradelines. We tried the Amex & Chase pre-quals but said they couldn't find any offers. 

According to the terms from Discover after approval, it indicated they could not retrieve a score from Experian and it could be because there is sufficient information to determine a score, which is the case. 

Do you think we'd have a chance with any of the Chase cards or Amex? Do you think it makes a difference if he's applying through a referral link as it apparently does with Discover? Or do you guys have any suggestions in general?

My son makes $38k/yr and has $0 housing payment and no other bills.

TIA 🙂

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If I was 18 in this situation with everything I know now, I would wait a year, then get started with Chase and/or Amex. 

You can also consider checking if an offer for the Apple Card is avaialble and not <$1000 CL

I would also ask nicely for the money to get a 5 year NFCU/PenFed SSL to get a loan on file if they're not going to have a car loan/student loan on their file 

Do remember to product change to the quicksilver after the 3rd statement posts by adding "/productupgrade" to the end of the URL on the desktop website for that Cap1 account. 

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+1 on the Apple Card if your son has an iPhone. I got the Apple Card as my first ever CC with a $250 SL. Even with a SL less than $1000 I still think it is an excellent card for beginners. The 2% back with Apple Pay is very decent for a cash back card and the app is very nice. It also can have growth potential with use. My Apple Card now has a $12,000 limit which I think is incredible that my first card is also my highest limit card since many starter cards stay stuck at low limits.

I agree that gardening for a year would be the best plan before getting a Chase card.

[Bravatempo]

There are a lot of cards marketed specifically to students that will approve with limited or no credit history.

Have you tried the Bank of America prequal? They issue these student cards:

BankAmericard for Students
Bank of America Customized Cash Rewards for Students
Bank of America Travel Rewards for Students
Bank of America Unlimited Cash Rewards for Students

There's also the Deserve EDU card (Celtic bank). It's a no annual fee card and also has a prequal form on the website.

Patelco, Wescom, and Advantis credit unions offer unsecured cards for students or others with limited credit. So do Cadence Bank and first Commonwealth Bank.

[Atonswife]

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@MT64 wrote:

I've never heard of someone being approved for an unsecured credit card, least of all for $1k starting limits, with zero credit history. I would dare to say it's impossible but would like to know from someone who may have the experience explain how that actually is possible. Everyone I've dealt with (even the kids with close to $40k salary in their 20s) always end up with a $200-$300 secured credit card offer from CAP1 having zero experience. Discover has never been one to offer without a credit history so it's kind of baffling or an ultra rare fluke in your sons favor? I don't know but it would be interesting to know why.

Assuming he already has a bank account (not sure why it wouldn't be through a Credit Union if given the option / direction), I agree that establishing at least a bank account relationship with a CU is ideal. I don't see any mention of Cred.AI either, which while not an actual Credit Card, does report $1500 credit and is treated as such. I know if that was an option when I was younger, that would have been my first go to card to build credit with next to a Capital One, because no way Discover would have approved.

Does make me wonder if they're changing approval requirements for the younger kids now or what the story is behind that approval.

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@MT64 I honestly have no idea how or why Discover approved him for an unsecured card with a $1k limit. It makes me think they treat referrals differently and maybe base it on the credit history or the persom referring? Again, this is just my opinion.

A little back story...my son turned 18 Aug'22. A few days after his bday, we did pre-quals for Cap One, Chase and Discover (all cards my husband and I have). Cap One and Chase had no options for him and Discover only came back with the Discover Student card. 

Fast forward to now, my son started a permanent job in a hospital and is making $38k/yr. We felt this was the time to try again to start building his credit. He's never even been an authorized user on any accts. So we started checking pre-quals again. Cap One pre-qualed him for the platinum and the qs1. Chase came back with nothing and Discover came back with the Discover IT Secured card (not even the student card like they did last summer).

Since we knew he would be approved for the Cap and Discover secured, my husband used the referral options on his acct and my son applied using the links. He went with the Cap One plat since there's no annual fee. For the Discover, he was ready to set his secured limit at $300. But after the 60 sec processing time, it said he was approved for the Discover IT (the blue card) with a $1k limit.

Also, when we downloaded the terms and conditions, in the section where it would tell you the score and agency they used, it said they could not retrieve a credit score from Experian and it could be because he had insufficient history to establish a score. 

So this leads me to believe it has something to do with the referral because it's the same ss# and all other info from the initial pre-qual for the secured card vs through the referral link.

As far as his banking, right now he only has TD which is still under a student checking/savings. My husband and I have been with TD since it was Commerce bank due to some perks we received through our jobs. The summer before my son started hs, we opened his accts so we could easily transfer money to him for lunch and other school activities. It was just safer for him to carry a debit card vs cash all the time. Now that he's older and no longer a student, getting a regulat acct is also on the list of things to do.

The union he's currently in for his job has a credit union and he may also decide to join DCU but I think that'll come when he starts car shopping in about a year or more. We live in a major city so a car is on his list but not his priority anytime soon.

[Brian_Earl_Spilner]

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@Atonswife wrote:

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@FireMedic1 wrote:

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@Atonswife wrote:

Hey all!!

It's been awhile but I need some advice.

My son is 18 years (will be 19 this summer) and we are starting his credit journey. He got a pre-approval through Cap One and also Discover. Once we knew he was pre-approved, my husband sent him a referral link for Cap One and he was approved for the platinum mc with $1k limit. Discover pre-approved for a secured card but when my husband sent the referral link, my son was approved for a regular unsecured Discover IT card also with a $1k limit which we found odd but definitely grateful.

Now i'm looking for one more card to establish his 3 tradelines. We tried the Amex & Chase pre-quals but said they couldn't find any offers. 

According to the terms from Discover after approval, it indicated they could not retrieve a score from Experian and it could be because there is sufficient information to determine a score, which is the case. 

Do you think we'd have a chance with any of the Chase cards or Amex? Do you think it makes a difference if he's applying through a referral link as it apparently does with Discover? Or do you guys have any suggestions in general?

My son makes $38k/yr and has $0 housing payment and no other bills.

TIA 🙂

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If you son is brand new to credit. It will take 6 months for a score to generate. But congrats on a great start!

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Thank you!!

I figured it'd take time for a score to generate. I meant to say above "insufficient information" but you understood perfectly. 

We're pleasantly surprised and pleased that with no score he is 2 for 2 with $1k limits. Like I said, right now he's not so much into the credit mix. He's focused on budgeting, building his savings and wants to start investing for retirement. So we're just taking things one step at a time. 🙂

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Honestly, building retirement is a really smart thing to do. I would maximize pre-tax deductions into their 401k or Roth. The problem for most people is freeing up money they're used to having so it never gets done. If your son is used to the smaller paychecks off the bat, it'll be much easier.

As for a 3rd card, once his score generates, they can get a chase or Amex. This would be a good opportunity to teach him how to evaluate the strengths and weaknesses of card rewards and rewards systems compared to his planned spend. They can look at the ecosystem provided by both lenders and cards used to earn rewards. And since both systems have cards with high annual fees, they can learn how to gauge value versus fees for long term use. 

[Anonymous]

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@Brian_Earl_Spilner wrote:

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Honestly, building retirement is a really smart thing to do. I would maximize pre-tax deductions into their 401k or Roth. 

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I assume "Roth" there is meant to be IRA (there are no pre-tax deductions into a Roth).

However, in this case, I would focus whatever he wants to put into retirement into a Roth (401(k)/403(b) if offered, or IRA).  With that salary, tax deductions aren't that valuable, and building a nice tax-free account into retirement will be helpful! 

(Speaking as one with the first-world problem of having "too much" in a traditional IRA, where all withdrawals generate tax with cascading consequences for Medicare etc)

[Remedios]

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@MT64 wrote:

I've never heard of someone being approved for an unsecured credit card, least of all for $1k starting limits, with zero credit history. I would dare to say it's impossible but would like to know from someone who may have the experience explain how that actually is possible. Everyone I've dealt with (even the kids with close to $40k salary in their 20s) always end up with a $200-$300 secured credit card offer from CAP1 having zero experience. Discover has never been one to offer without a credit history so it's kind of baffling or an ultra rare fluke in your sons favor? I don't know but it would be interesting to know why.

Assuming he already has a bank account (not sure why it wouldn't be through a Credit Union if given the option / direction), I agree that establishing at least a bank account relationship with a CU is ideal. I don't see any mention of Cred.AI either, which while not an actual Credit Card, does report $1500 credit and is treated as such. I know if that was an option when I was younger, that would have been my first go to card to build credit with next to a Capital One, because no way Discover would have approved.

Does make me wonder if they're changing approval requirements for the younger kids now or what the story is behind that approval.

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I have. My daughter. Her first approval was $1000.00 by US Bank, followed by Disco and Amex couple of months later ($2500/$2000), FBNO $11,000 (9 months after her first approval), then CSP at $7900 when her oldest account was 13 months. 

Recently she got $10,000 Cash+  

Her Disco is $7000 now, it's 22 months old, Amex, pretty sure it's $9000. 

It's possible when stars, income, banking relationships, and knowing which door to knock on align.

One caveat, she was AU on two accounts when she was approved for her first account, however she referred her boyfriend who didn't even have CR (literally nothing) and Discover approved him for $2000, so AU account isn't necessary. 

[Brian_Earl_Spilner]

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@Anonymous wrote:

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@Brian_Earl_Spilner wrote:

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Honestly, building retirement is a really smart thing to do. I would maximize pre-tax deductions into their 401k or Roth. 

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I assume "Roth" there is meant to be IRA (there are no pre-tax deductions into a Roth).

However, in this case, I would focus whatever he wants to put into retirement into a Roth (401(k)/403(b) if offered, or IRA).  With that salary, tax deductions aren't that valuable, and building a nice tax-free account into retirement will be helpful! 

(Speaking as one with the first-world problem of having "too much" in a traditional IRA, where all withdrawals generate tax with cascading consequences for Medicare etc)

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Yeah, you're right. I was half asleep when posting.