Children as Authorized Users

[Anonymous]

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?

[Cred4All]

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 .

[SBR249]

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.

[Anonymous]

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@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 .

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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.

[SBR249]

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.  

[Anonymous]

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. 

[K-in-Boston]

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.  

[sdsoccerdad]

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.

[Anonymous]

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.

[Anonymous]

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