A young person can get a credit card by becoming an authorized user on someone else’s account, or by waiting until they turn 18 and applying for one on their own. There are some guidelines and requirements for both methods – such as having self-control with spending, or having enough income to qualify for your own credit card – but the positives are well worth the trouble for a young person just starting to build their credit.
Becoming an authorized user is the easiest way to start building credit as a young person because there’s no credit check for authorized users, and it’s the only way to get a credit card before you turn 18. Authorized users aren’t legally responsible for paying the bill, so it’s good to lay down some spending rules with the primary cardholder before using the card. As long as the primary cardholder pays their bills on time and uses the card responsibly, the authorized user will get good information on their credit report, even if they never use their card.
Young people age 18 and older are legally allowed to apply for their own credit card. However, credit cards - even student credit cards - require applicants under 21 to have independent income to comply with federal law. That means an 18-year-old can’t list a parent’s or spouse’s income, for example, on their credit card application. The more income you’re able to show on an application, the higher your approval odds, and possibly your credit limit, will be. So it’s best to have a job with steady income before you apply.
If you’re not sure about your ability to handle an unsecured credit line, or if your credit report already has some blemishes, consider a secured credit card. Secured credit cards require a deposit up-front, which then becomes your credit line, so it’s harder to “go overboard” with these credit cards. But they report to credit bureaus, so having one will build your credit every month as long as you pay your bills on time. And they are easier to get than unsecured credit cards. Some don’t even check your credit.
Finally, if you’re looking for your first credit card, it’s good to keep a few things in mind. The best credit cards for young adults aren’t expensive - they won’t have monthly or annual fees. Some secured cards have annual fees, but there are fee-free options, too. Also, find a credit card that reports to all three major credit bureaus every month so you can build your credit history.
No matter which card you choose, make sure to pay your bill on time. This will keep your account in good standing and help you build credit. Paying your balance in full every month will also allow you to avoid paying unnecessary interest. In addition, make sure to keep your utilization low by not going over (or even getting close) to your credit limit. Do those things as a young adult, and you’re on the road to a great credit score.
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