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Should You Give Your Kid a Credit Card?

Written by Teri Cettina on July 22, 2014 in Family Money  |   No comments

Perhaps your teen is getting to the point where carrying around cash isn’t so convenient any longer. Maybe she’s signing up online for a crafts class, but she needs a credit card to do so. Or perhaps your student is away at college, and you’d…

should-you-give-your-kid-a-credit-card

Perhaps your teen is getting to the point where carrying around cash isn’t so convenient any longer. Maybe she’s signing up online for a crafts class, but she needs a credit card to do so. Or perhaps your student is away at college, and you’d rather he not carry a wad of $20s to the bookstore to pay for $400 worth of textbooks.

Is it time to let your teen or college student get a credit card?

First, you should know that the federal government has made it much tougher—thankfully—for anyone under age 21 to get a credit card. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) requires that anyone below age 21 either be able to show enough annual income to pay off his or her entire credit line or have a cosigner, such as a parent or spouse. The idea is to make it harder for minors to jump without thinking into credit card debt.

However, if you’re hoping to give your child a credit card with training wheels, you do have some options.

Perhaps the best strategy is to add your child to your own credit card account as an authorized...

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