Should you co-sign for your teenager’s credit card? The CARD act makes it more difficult for credit card companies to extend credit to people under 21 who don’t have their own independent income. Should you co-sign so that your kid can get a card anyway? Michelle Singletary of the Washington Post says, “No.” [Washington Post via Public Citizen] (Photo:foundphotoslj)

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  1. winshape says:

    Not just no, but HAAIILL No.

    You might as well forge, hammer, and bolt the chains to your kid’s leg.

  2. youbastid says:

    I got my own card at 18 without a cosigner, and it was very valuable at getting an early start on good spending habits, using credit wisely, and building a credit history. If it was necessary, and my kid couldn’t get their own card at 18, I would definitely cosign for them. Of course, at the same time there were kids my age that ran themselves into trouble, so it’s not for everyone.

    • Jesse says:

      @youbastid:

      And people 18-21 don’t necessarily need a Visa/MasterCard/Amex. A gas station credit card is a great tool to establish credit provided that it is paid off every month. It’s hard to get in trouble with these unless you don’t pay the bill or buy like $20 worth of candy every day.

      • humphrmi says:

        @Jesse: Agreed, there are better ways to get credit:

        - Instead of giving them a card that they can use for anything that pops into their head, encourage them to finance (gasp!) an important purchase using a bank or credit union sig loan, and co-sign on that. For instance, if they want to buy a computer, borrow using a sig loan. This gives them a non-revolving loan with a set pay-off date and amount, so they learn to PAY OFF LOANS.

        - For a new car, use car financing. Again, if you’re OK with co-signing, co-sign the car loan rather than a revolving card.

        Etc…

        Note I’m not debating the point of whether co-signing in and of itself is good or not, that’s a decision that each parent has to make based on what they know about the responsibility that their kid demonstrates.

        • TEW says:

          @humphrmi: Your logic is poor at best. To make a 18-20 year old buy a car with a loan or go into other debt because of this law is awful. With a credit card you will not be out a nickel if you pay off the balance every month but with a loan you are guaranteed to pay interest. I understand that you want the debt to have some assets as a result but it is not worth paying extra for.

          • humphrmi says:

            @TEW: Talk about poor logic. First, I didn’t suggest forcing an 18-20 to go into debt at all, I suggested that there are better types of loans than credit cards to learn how to use credit wisely. And let’s look at this statement:

            With a credit card you will not be out a nickel if you pay off the balance every month but with a loan you are guaranteed to pay interest.

            If your teenager can afford to buy a car with cash, then they don’t need a credit card or a loan. If they have to finance, they are far better off taking out a closed-ended car loan than a revolving credit card account.

            And I’m not saying that asset based loans are better than any other.

            • Eyebrows McGee (now with double the baby!) says:

              @humphrmi: “If your teenager can afford to buy a car with cash, then they don’t need a credit card or a loan. “

              The issue for many students wouldn’t be so much a need to buy as a need to build a credit history. Getting my own card when I was 19 or so and using it to buy books once a semester was very helpful when I graduated and had a credit history. My sister, OTOH, had no CC in college, then went to work abroad for three years, and came back to the US with basically no credit history, which has totally screwed her in apartment hunting, setting up utilities, and, yes, getting a credit card. My parents had to co-sign for her in her mid-20s just so she could get a freaking place to live.

    • BytheSea says:

      @youbastid: I got a credit card at abotu 18, too, but I had a job and had had once since I was fourteen. And I wasn’t poor, we lived in a swank suburb. Every kid is different, but perhaps the banks have a point on who is trustworthy with credit and who isn’t. Until then, you can get your kid one of those pre-paid check cards that you or they put money on, and the parent is a joint owner of the account.

      • youbastid says:

        @BytheSea: I think giving them a pre-paid check card has the opposite effect. That’s just free money and they don’t learn that they ever have to pay for what they buy. I would give one of those to my kids if they were 12 maybe, but not 18.

  3. Silversmok3 says:

    Funny, we restrict drinking to the age of 21 ….but we let teenagers with no job get 4 digit credit limits.Go ahead, co sign for em.

  4. calquist says:

    Depends on the kid. At 18, the debit card was perfect for me. I got my first credit card at 21 to start building good credit, by then my time in college and debit card managing had taught me a little bit about budgeting and I managed to not run myself into debt.

    However, I know plenty of 23+ y/os who I still wouldn’t trust with a credit card.

    • SacraBos says:

      @calquist: My kid still can’t handle a debit card correctly, so H*LL no to co-signing for him. I can’t tell you how many times I’ve checked the statement where he’s hit an ATM for $20 – and get charged $2 by the ATM and $2 by the bank for the “privilege”. And then he wants more money cause he’s a little short again. I’ve explained it to him several times, but he just doesn’t seem to get it. Scared the bejeezus out of me for his future.

      • calquist says:

        @SacraBos: I did that all the time in college. It wasn’t until I graduated and got a job and made my own money that it finally sunk in how all those things add up.

      • scootinger says:

        @SacraBos: A little off-topic, but I think you need to use a different bank. There are a lot of banks that don’t charge you a fee for using “outside” ATMs, and even a few that will reimburse you for ATM fees charged to you by other banks.

  5. Silversmok3 says:

    Id say no way.Even if you have a responsible 18 year old-and whos gonna say they dont?-life happens.Job loss, short some $$ on the college tuition, or theyre just plain broke and friends want to go out.
    Never underestimate peer pressure, and quite frankly it could be said that few adults need credit cards, much less any teen just learning about budgets and spending.

    If you NEED to train a teen about credit, use a secured card with THEIR OWN MONEY.That way, no lifetime of debt from that late night Papa Johns run…

  6. Gmork says:

    By getting a credit card at 18 I had the opportunity to build up a good credit history that really helped me out. I don’t understand why they changed the law so that an adult would have to have a parent sign off on something. I was out of the house at 18 and my parents wouldn’t/couldn’t help with anything. I had to take care of myself, this law makes doing that harder. If this law had been in effect when I was 18 I would not have been able to build up my credit score to get the lower interest rate on my first car or my house.

    • j-o-h-n says:

      @Gmork: Parents only have to co-sign *IF* the 18-20 yr old has no independent means to pay — if you are 18 and have an adequate income of your own, this does not apply to you.

      • Raanne says:

        @j-o-h-n: What does “independent income” mean though – The whole time i was in college I was claimed as a dependent by my parents, even though i had a job. would i still have qualified? I think that the extra 5 years or so helps with my credit, as the credit card that i opened when i was 18 is still the main credit card that i use.

        I have real issues with treating someone who is legally an adult different due to an arbitrary number. Either 18 is an adult, or it isn’t.

      • TEW says:

        @j-o-h-n: I have not heard what the independent income really means. Does it mean you have a job or does it mean you are not a dependent on your parent’s tax returns? I think few companies will deal with the trouble that the government will cause them.

    • BytheSea says:

      @Gmork: Because that adult is unemployed.

      • hedonia says:

        @BytheSea: I don’t think it has to do with your status as a dependent or not, I think its based just on demonstrable employment/income.

        • OneTrickPony says:

          @hedonia: Correct–it has nothing to do with tax status; it has to do with income. The law, very briefly, states that a full-time student between 18 and 21 can get an un-cosigned card with a limit of $500 or 20% of their annual income, whichever is greater. Anything higher would require a co-signer.

          There’s a lot of misunderstanding about this portion of the bill. It’s not, in essence, treating 18-21 YOs any differently than adults 21 and over. Instead, it’s actually requiring that credit card companies treat them the same as non-student adults. That is: no income, little or no independent credit.

          • lilyHaze says:

            @OneTrickPony: If the $500/20% of income limit is true, I’m all for it. Do college kids or unemployed 18-21 year olds need more than that?

            My first credit card (little to no income) had a $500 limit. I was fine. I think the problem was that college kids that they sign up for MULTIPLE cards, each with a $500 limit. Then, as they go into more debt, the companies offer them a greater limit.

  7. Jonbo298 says:

    It all depends on the situation. Trust is earned, but broken instantly (unless your stupid…). I had to co-sign for my car because I couldn’t (past medical bills that got paid off but damage was done), but my grandma was willing to help because I showed that I can afford it.

    1+ year later, and I’m making double payments a month effectively to the car and most new debt from my new round of med problems being paid off in conjunction. I earned the trust the right way by showing her what I could do, while others in the family had broken her trust in them.

    For a credit card, I’d just go the secure card route if they had bad debt in the past. I had to and while it’s only $300 right now on my limit (rarely touch it as it is and only use to build credit that was burned int he past) but I had to foot my own cash to cover it which didn’t bother me.

  8. HadwinAmphiaraus says:

    Just turned 22 now, still in college, got my first card at 18, from what i recall at that age I did carry a high balance, my limit was $700 and it was lingering around $500, when I got a new job at a national pre owned car superstore, I learned about debt to income, credit utilization and all the necessities, if it wasn’t for them I’d have no clue, I currently have approximately $10,000 of available credit, I use less than 300$ so my ratio’s are great, score is great, just got to keep it that way, and yes peer pressure to go out and have fun is quite big especially when your in south florida where everyone and their mother have debt

  9. putch says:

    i dont understand why they inserted this under 21 provision in. I like the CARD act. i don’t think CC companies should advertise on college campuses. i think CC companies should more adequately gauge a consumer’s ability to repay their debts. I get it. I like it.

    but, i dont get why a 22 year old w/o independent income should have an easier time geting a credit card than a 20 year old w/o independent income. isn’t the issue income and you’re ability to repay and now how old you are?

    i dont get it. the military isn’t required to get parents to co-sign enlistment papers for 18 year olds.

    so you can die in iraq but can’t get a discover card? makes sense.

  10. krunk4ever says:

    I can’t believe this.

    Sure many kids aren’t trust-worthy enough, but for those who have earned your trust, I don’t really see any reason why not.

    First of all, you can control the credit limit or how much you can lose out. With something like $1,000 limit, is that really too much for you to lose in order to give your kid another lesson in financial responsibility and help him start building his credit?

    There are many things parents have to help cosign for (i.e. college loans, apartment lease, etc), and if you can trust your kids with those, I hardly think a low limit credit card is all that much…

    • wcnghj says:

      @krunk4ever: If the kid defaults, the card will still show up on the parents credit report.

      Who says the kid will tell the parent right away?

    • BytheSea says:

      @krunk4ever: $1000 plus overdue fees for months can add up to a lot of money very quickly.

    • frodoUnderhill says:

      @krunk4ever:
      My credit limit when I was 18 was $500 and my mom made sure she saw the bill every month. Having an established credit score right our of college really helped me buy a house my first year working.

  11. HRHKingFridayXX says:

    If you have a good kid, I think this would work. Having your them know that you’re looking over their shoulder and covering a percentage of the bill is a good way to have training wheels on your finances.

  12. pecan 3.14159265 says:

    I think irresponsible teens will find themselves ways to continue being that way. Parents can either try to remove every temptation or threat but it’s impossible to do so. Parents need I teach their teens about sound money management and consequences of failing to make the proper decisions. And cards should be tools and used as a contract of trust between parents and teens, never something you simply give a teen. When I got mine at 18 I was told to be careful with it and that it was a tool, not a toy.

    Credit cards can also be a teaching tool for parents, a way of showing in tangible ways how one bill could wipe out a summer job’s earnings. If they have to pay it themselves and you are afraid they will wreck their credit if they spend too much, the first lesson is then: how to teach kids the value of money?

  13. Tambar says:

    Best case scenario is to add them, don’t tell them, don’t give them the card. It builds up their credit, which they likely won’t check until they’re older. But stay diligent on checking yours, ’cause kids is sneaky.

  14. Cant_stop_the_rock says:

    I will definitely cosign for my kids if necessary. It’s important to start your credit history as early as possible. I will raise my kids the way my parents raised me, and they will not spend any money that they do not have.

    • Anonymous says:

      @Cant_stop_the_rock: I’m goign to agree with you completely here. When I was 14, my mom co-signed for a Capital One credit card for me, that had a credit limit of $150. I’m 22 now, and my credit report (and score) reflects that 8 year history of credit.

      Obviously my parents trusted me, as I never abused the card, but rather used it for incidental expenses like a movie ticket or whatever, that I had previously used cash for, without a change in behavior from when I was using cash.

      Too when I went to college a few years ago, I was used to using credit as a cash replacement rather than a supplement to cash – spending money I do have instead of racking up a balance, and so I never had any crazy credit card bills that other college students seem to have racked up.

  15. Rebecca Cutri-Kohart says:

    I disagree with this. I thought I was being “good” by not getting my first credit card until my senior year in college. I took a job the year after (2002) making a good salary with gauranteed periodic raises (gov’t job.). The year after that I decided to by a house (live in Houston, houses have been and will always be cheap here..). I had a 10% downpayment + closing costs in the bank. I had a stable salary. What I did not have was credit – I had zero credit history besides one card with a $1000 limit that was precisely 2 years old. I ended up being able to eventually get a mortgage, but my rate was about 0.5% higher than what I could’ve gotten with a high credit score (and refinancing costs $$$$) This effected me from the beginning – I had to make a bigger deposit on an apartment (after being denied one application), had to put deposits on utilities to get hooked up, my car insurance rate was higher. Having no credit costs you money. Bottom line. Parents should cosign a card for their child the day they turn 18 to help them build credit. Put a reasonable limit on it ($500 seems to be a reasonable liability to be willing to take on for your child) and help them get their life started right.

  16. Rebecca Cutri-Kohart says:

    and don’t forget the 18 year olds who don’t go to college.. join the military, have random jobs, pursue trades, whatever. We live in a credit card driven economy. Getting a hotel room requires a security deposit on a credit card, so does a rental car (not that that’s easy for an 18 year old to get) and making purchases online.

  17. Haggie1 says:

    A prepaid Visa card gives them all the convenience of a credit card with none of the risk…

  18. Daniel Parmelee says:

    Yes, but get a very low credit limit. Maybe $500 or less. This gives them some purchase power, but limits the extend of their “damage”. Maybe after they’ve proven they can handle it, bump it incrementally. i.e. after the first year make it $1000 or something.

    People need to establish a credit history. This means age of accounts AND willingness to pay them regularly.

    There are always secured credit cards, too.

  19. Raanne says:

    So, i stated it above, but what does independent income mean? I was claimed as a dependent until i graduated college – but that had nothing to do with if i had income or not.

    I personally think this is an awful part of the CC act. I think that although the credit card companies do tend to prey on 18 year olds because they think they are easy money, it is no different then when they prey on other “vulnerable” groups such as those who have recently gotten out of bankruptcy, or have poor credit.

    In our country, 18 is an adult, 18 is when you can legally sign a contract – why would we make an exception in this case?

  20. Jerry Vandesic says:

    One suggestion that I have heard is to add your 18 year old child as a authorized user to your credit card, but don’t give them the card or let them know the number. By the time they are 22 and looking for their first apartment or their own credit card, they will have an established credit history (assuming that the parent is not a dead beat).

    • wcnghj says:

      @Inka Dinka: :)

      Correct, just make sure you have never been late on the card and that there isn’t too much of a balance.

    • HRHKingFridayXX says:

      @Inka Dinka: Yeah, be careful with this. Say one parent loses a job, then your kid will have bad credit without even knowing it.

    • shepd says:

      @Inka Dinka:

      The “authorized user” credit benefit went away quite a while ago, I’m sad to say.

      The only benefit being an authorized user has, nowadays, is that ability to use the card (and possibly be on the hook for paying it if the card’s owner is a deadbeat) and that’s it.

      • Jerry Vandesic says:

        @shepd: I think “went away” is too strong a statement. The bureaus tweeked the model, and in some cases an AU is meaninless, but for family members an AU still provides benefit to a credit score.

  21. Kimberly Gist-Collins says:

    No way. Good kids can make bad decisions too.

  22. wcnghj says:

    Let them take the financial planning class. If they take one of those, they can apply alone.

  23. Raanne says:

    another question to ponder is whether the bad credit use has to do with a card holder being a first time card holder, or if it has to do with the age. I feel as though they may just be delaying the problem.

  24. Powerlurker says:

    The answer to any question beginning with the words “Should I cosign…” is HELL NO unless you would feel comfortable paying for everything yourself anyway.

  25. Cat_In_A_Hat says:

    What about cases when the parent’s credit is so far in the dumps that they do not qualify as a reliable co-signer? My mother has horrible credit and wouldn’t even have a slight chance of co-signing for me (if I were 18) and getting my first credit card under these new provitions. Luckily I was able to learn from my parent’s credit card mistakes and when I got my first card at 18 with a limit of $500 I understood the meaning of credit and didn’t charge things expecting never to pay for them. Having established credit at 18 years old helped me tremendously when it came time for me to buy my first car. Although I am only 23 my credit record is excellent and my credit score is much higher than many of my friends who weren’t as responsible.

    • KHook321 says:

      @Cat_In_A_Hat: I was/am in the same situation. My parents both have terrible credit and could definitely not co-sign on a credit card for me. Why should I have to wait until I’m 21 to start building my credit because of their past mistakes? If anything, I’ve learned what not to do from them. I’m responsible with my credit cards and I’ve built up a great credit score the past few years. And I don’t even make much money, I just don’t charge more than I can handle. I think it’s wrong to pre-judge a group of people based on age.

  26. H3ion says:

    I think you have to know your children. Sure they can screw up but if they’ve generally been responsible through high school, they’re not going to turn into werewolves when they hit 18.

    We obtained joint credit cards for each of our children when they entered college, more because we wanted them to have a source of funds in an emergency. They got the bills each month and paid them. We got copies and never had a problem.

    Would I do it again? Sure.

  27. scootinger says:

    I received my first credit card (one specifically marketed to students) from Citibank when I was 18. When I saw that it had a $2,000 credit limit, I wondered what the fuck they were thinking giving out CCs with such a limit to someone like me who 1) had no credit history and 2) no proof that they had a way to pay off a credit card? I am PLENTY responsible with my personal finances, but a lot of kids my age would have probably gone straight to the mall and maxed out the card upon seeing that magic number.

    Today I’m 20 and have over $40,000 in credit lines, the vast majority of it being from Citibank and Chase. The most egregious offender has been Citibank, which has upped the aforementioned “mtvU” credit card from its original $2K limit to $10K. In addition, they’ve been more than happy to accept me for 3 credit cards totalling $18K that I applied for a couple of months ago.

    The only reason I applied for those cards was for bonus point offers (yay $325 in giftcards!) and 0% no-fee balance transfer offers (I’m planning on letting my $15K from Citi sit in the bank and earn interest for a year.) I always pay off my credit cards every month without exception. But not everyone else does. Irresponsible lending like this is why we are in the financial situation that we are now. Evidently their attitudes haven’t changed, though…seeing as Citi has been happy (even in this recession) to extend $18K in credit to a 20-year-old college kid who makes a few hundred bucks a month in income.

    Back to the original question, though…I do think that there should be limitations when kids get credit cards…but not to the extent that this law proposes. Maybe let kids get a CC with a $300 credit limit or so, which would allow them to learn responsible use of a CC and to build credit, but not leave themselves and the lenders totally screwed if they do mess up?

    • Michael Belisle says:

      @scootinger: You don’t think that the first condition, “card issuer has to verify that a young adult has the “independent” financial means to repay any credit that has been extended,” is reasonable? The law does let them get a card with a $300 limit, as long as the young adult has the means to pay that off.

      I also like the restrictions on free gifts. It was ridiculous to walk around campus and see kids lining up to sign up for credit cards in exchange for a box of cold Papa John’s pizza.

      Basically, the banks were taking advantage of two things: 1) it wouldn’t take much to get kids to sign up for credit cards and 2) mommy and daddy would probably bail them out if they take the bait and overspend.

      • scootinger says:

        @Michael Belisle: Sorry, I didn’t fully read all of the rules. That sounds fully reasonable to me.

        It’s rather bothersome that kids will whore themselves out to credit card companies just for a piece of pizza or “oh-hi-I’m-a-billboard” tee shirt. Apparently my campus doesn’t allow the credit card vultures to solicit on campus…so they go to pizza and sandwich places off campus and advertise “FREE FOOD!!!”…if you signup for a credit card, of course. They would have to pay me $50 (at very least) to get a credit card.

  28. 2 replies says:

    CREDIT?! WTF!
    NO NO NO NO NO!
    1×10^6 times NO!
    NO^n!
    Teenager & Credit card should NEVER be spoken in the same sentence unless you’re saying either this sentence or something like: “Teenagers should NEVER ever, Ever, EVER, EVER have a credit card.

    Credit cards do NOT teach financial responsibility.
    They encourage the EXACT opposite.

    <Rant>

    This is how I look at kids & finances:
    Fetus:
    - Joint bank account or CDs for college saving. (No checking, just savings. For large $$ gifts they may get on special occasions; ie birthdays, x-mas, graduation parties etc). The dependent should never be allowed to even TOUCH this account unless they’re making a DEPOSIT.

    Pre-Highschool:
    - Allowance for school lunch or brown bag it.
    - Chores if they want spending money.

    Highschool teens?
    - Credit union account with checks, no debit card yet*. It should ONLY contain THEIR money. Joint? Yes, so you can monitor it.
    - Money beyond chores… they get a job to fill the CU account and to teach them the value of a dollar.

    *Checks so they can learn how to balance their own books. After they’ve proven that, then and only then can they get the DEBIT card. (You’re still monitoring the account, mind you.)

    POST HIGH SCHOOL GRADUATION:
    The ONLY reason I see any dependent having a joint card is if they’re in college. Even then it’s ONLY for books & emergencies (meaning hospitalization, car repair during holiday travel home).

    Not going to college? Whatever, it’s the kid’s choice.
    Once they graduate & move out their college savings is theirs & they’re no longer a dependent.

    </Rant>

  29. Michael Belisle says:

    I can agree with the advice here based on my experience. When I was about 18, I had my mother cosign for my credit card (unlike my siblings). This gave me a gold credit card with $3000 limit instead of $500 student card like my siblings.

    Now years later, my oldest card is still this one cosigned with mother. It has a ridiculously high limit in the tens of thousands of dollars. I’d kind of like to not have any financial ties to my mother these days, but the only way to do that is to close the card. That’ll ding my score, so I’ve avoided doing it.

    In the end, despite the initial convenience, everything would have been much easier if I had gotten a card without having a cosigner.

  30. Tim says:

    I don’t know about this one. I’m under 21 and got my first card when I was 19, almost 20. The worst thing I’ve done with it was to pay rent, but I got that paid off within a few months. But, as we all know, people are different.

    But also keep this in mind: we know banks are already being more cautious about who they extend credit to, and they’ll continue to be more and more cautious. So it’ll be even harder for people to get credit at that age. How can someone start to build a credit history then?

  31. TrinityLast says:

    Well, at least it makes it clear about independent income. I’ll be honest, if my brother-in-law had not be able to get a credit card while it was perfectly legal for him to go MIA in Iraq for a month at 18, his first tour in the sandbox, I would have been just a tiny bit furious.

    Especially considering that the credit card is what his wife ate on while he was gone. But that begs the question – you can get MARRIED, and enter the military at 18. I would hope that the law takes such situations into consideration.

  32. colorisnteverything says:

    This is a stupid discussion. IMO. My parents were always willing to co-sign for me (if I had needed it). I, of course, was responsible and did not blow money on things I didn’t need. I’m actually one of the cheapest people alive.

    My parents “trained” me for a credit card by getting me a VisaBuxx card when I was 16 in preparation for a performance trip to New York. The card was pre-paid, but I was able to learn to use it and use it responsibly. If people haven’t done this for their kids yet, they should. If the kid doesn’t learn to use the card responsibly, I would no co-sign. I have many friends that if I was parenting them I would NEVER have co-signed. They are just not responsible people.

    I got a loan when I was 18 for “flow” and the ability to earn credit. We needed a supplement of $5,000.00 which we can afford to pay over the month. I am paying down interest AND priciple and my parents are paying for me to pay. They know I am a student and will continue to be one when I go to grad school. However, they wanted ME to accrue credit. They co-signed and got above prime for me. I, of course, am happy with this.

    I also got a capital one card when I turned 18. It was for college emergencies. I need to have a card down at school, Dad said. So, I got one. I used it maybe 3 times over time to increase my credit limit and build a history. I always paid the card off IMMEDIATELY after using. I still do this and have never made a payment that wasn’t my full balance and I am almost 22.

    Kids need something in case an emergency happens in certain cases. I am inaccessible to my parents right now because I am overseas on study abroad. I have two credit cards and they have been lifesavers. My parents can get me money if needed, but it will take a few days via my bank account at home or a wire transfer. Even as a college, student, though, this can be a problem. I am 4 hours from home and my parents both work. There is no way for me to have “instant” access to money if I need it.

    Also, a lot of stores will take your debit/credit card, but will make you do it on credit. DO NOT DO THAT. You may have to if you don’t have a credit card, but I always ask if I am unsure. My Dad is a banker and he doesn’t allow us to do this. He says it is FAR better to deal with your bank than the credit card company, which may have absolutely no need to pay you back. Always pay debit on a debit/credit. Use your CREDIT CARD for credit purchases.

    Also, while some people may have no “need” for a credit card until 21 because they live close to home and don’t have my circumstances, they need to look at the bigger picture. When one applies for a rental or looks into buying a house, 5 years or more of excellent credit looks a great deal better than 1-2 years of credit, right? I have an “excellent” credit score because of my use of credit. I will be eligible for these things. A person who waits until 21 will not.

  33. scokar says:

    What happens when they turn 21? Can you remove the parent from the card?

  34. Real Cheese Flavor says:

    I’m officially an old person now because the first thing that came to mind was, “what the hell does a teenager need a credit card for?”

  35. Rectilinear Propagation says:

    Isn’t the new law moot point, at least for now?

    It’s not like anyone is even trying to lend money or give a credit card to people who don’t already have a credit history (and an excellent one at that) anyway, regardless of age.

  36. Trencher93 says:

    Does co-signing build KID’S CREDIT? I don’t think so. The goal is to establish your kid’s credit so they can buy car/house/etc later in life.

  37. bdgbill says:

    I got a credit card when I was 18 and it was the best thing that ever happened to me. I totally screwed up my credit by the time I was 20. This prevented me from going 30-50 grand in debt during my 20′s (which I surely would have done).

    By the time my brain started to work sometime in my early 30′s, my credit was easily repairable and I had no debt whatsoever. I was also used to living a cash based life and not spending money I did not have. This has served me well.

  38. GoPadge says:

    I follow the advice of a very wise man… (Dave Ramsey)

    If the bank, who actually hire people to figure out what the odds are that a particular subset of the population is a good or bad credit risk, says your kid is a bad risk (and hence the need for a cosigner); why should I disagree. I mean my judgement is clouded by my familiarity to the person.

    Of course, I plan to have my kids understand the benefits and risks of credit long before a bank tries to get their leachy hooks into my kids. My kids won’t go on my cellular plan, they’ll have their own pay as you go phone with their own bill to cover. They won’t have access to my vehicles until they can cover the increase in insurance payments. Their first car will be my current daily driver, a ’97 VW Jetta with 1/4 of a million miles on it.

  39. mzs says:

    You have to be careful as the kid as well. I became an authorized user of one of my parents’ cards when I went off to college. I tried to get a credit card myself but was not able to get any good ones without terrible fees and low limits. So I would use the card essentially three times a year to buy books and then repay my parents from my part time work and stipend soon after. Also just after college when my debit card got over charged by a fat fingered clerk at a gas station I had to use that card again.

    Then years later it was time for me to buy my first house and I learned that my parents had not good credit. My being authorized on that card led to a whole lot of letter writing to get approved for my IL HUD loan (they were incredibly careful). It made everything on my parents’ credit reports suspect about me as well.

    So if you are a kid be careful about your parents as well. But also appreciate all that they did for you and later on when your parents borrow money from you be man enough to just give it to them. (That’s a different story, and of course man applies to woman as well.)