Last update: January 24, 2024
8 minutes read
Learn the age rules for owning a credit card, explore young adult credit options, and kick-start your financial journey effectively. Discover when you can start building your credit and financial independence.
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Are you in your late teens, thinking about getting your first piece of plastic - a credit card? Or are you a concerned parent doing your homework on credit card rules for young adults? Either way, we need to answer the burning question: how old do you have to be to get a credit card?
Here's the short answer: You have to be at least 18 years old to apply for a credit card in the U.S. This post explores the ins and outs of this law, along with exceptions to the rule, and options available for the youngsters looking to build their credit.
According to U.S. federal law, specifically, the Credit CARD Act of 2009, a consumer can apply for a credit card at 18 years old. But, it's not as simple as hitting the magical number 18. You see, there are certain requirements set by the law that play a key role before you can get a credit card, even if you’re over 18.
Not only do you need to be 18, but the law also requires applicants to either have some independent income source or a cosigner. In simpler words:
Well, here's where it gets tricky. If you're under 21 and don't meet the criteria mentioned above (i.e., you don't have an independent income), here’s what you can do:
Here's a dose of reality: Being 21 or above doesn't give you automatic approval for a credit card. Even though restrictions drop off at 21, approval is not guaranteed. Many credit card issuers weigh in your credit scores and income while considering your application.
So you've just turned 21 and are thinking about establishing your credit profile, despite being a little wet behind the ears credit-wise. Don't worry, there are a few credit card options for you to consider:
Yes! The Credit Card ACT of 2009 allows credit card applications with cosigners, which could be your workaround. However, keep in mind - most major card issuers don't allow co-signers. But hey, don't lose hope, you may have better luck with smaller banks and credit unions, who often offer much better interest rates on credit cards anyway.
What are credit unions? They are financial not-for-profits where people in your community or state can pool and borrow money - they work just like a bank but with lower fees/rates and more of a community feel.
Starting your credit journey is an exciting step. But like any journey, it comes with do’s and don'ts. Sticking to these will help protect you from the risks of debt and bad credit. Let's take a closer look:
Start with a secured credit card or as an authorized user
Always pay your bills on time
Stick to a budget
Check your credit score regularly
Jump into multiple credit cards at once
Ignore late payment dues
Overspend on your credit card
Apply for a credit card without understanding its terms
While getting your first credit card is a fundamental step towards financial independence, like most things, it comes with its own sets of advantages and disadvantages.
Getting your first credit card can seem like a minefield. That's where we step in. Our mission at TuitionHero is to simplify finance for you, whether you're a student just stepping into the classroom of credit building or a parent juggling college funds and credit scores.
From offering guidance on student loans and scholarships to providing advice on handling credit card offers, we're here to back you up every step of the way.
And get this - beyond helping with credit card choices, we also help you with student loan refinancing and FAFSA to secure better financial aid. With TuitionHero on your side, you'll get the reliable financial education you need, so you're never left scratching your head over college finance matters.
So there you have it – the ABCs of when and how to start your credit card journey. Remember, being young doesn't mean you're at a disadvantage. With a bit of financial knowledge and habits in place, you can lay a solid foundation for your credit history. At TuitionHero, we're here to help you make smart decisions about credit cards and everything else finance-related.
Check out our FAQ below for quick answers to the most common questions.
Secured credit cards, student credit cards, making full payments on time, and being an authorized user on a credit card with healthy credit activity are all great ways to build your credit as a young adult.
Start by ensuring you meet the minimum income and age requirements. Building a good credit history by paying your bills on time, keeping your credit utilization below 30%, and fixing any errors in your credit report can boost your chances considerably.
With consistent and responsible credit habits, it's possible to establish a decent credit score within six months to a year of opening a credit card. Timely payments, low credit utilization, and a mix of credit types contribute to a good score.
A good credit score opens doors to financial freedom - from being approved for apartments and loans, to securing lower interest rates on credit products, and even favorable terms on insurance policies. Plus, if student loans are part of your college plan, lenders may be more willing to grant loans to students with a good credit score.
Brian is a graduate of the University of Virginia where he earned a B.A. in Economics. After graduation, Brian spent four years working working at a wealth management firm advising high-net-worth investors and institutions. During his time there, he passed the rigorous Series 65 exam and rose to a high-level strategy position.
Rachel Lauren is the co-founder and COO of Debbie, a tech startup that offers an app to help people pay off their credit card debt for good through rewards and behavioral psychology. She was previously a venture capital investor at BDMI, as well as an equity research analyst at Credit Suisse.
At TuitionHero, we're not just passionate about our work - we take immense pride in it. Our dedicated team of writers diligently follows strict editorial standards, ensuring that every piece of content we publish is accurate, current, and highly valuable. We don't just strive for quality; we aim for excellence.
While you're at it, here are some other college finance-related blog posts you might be interested in.
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