How To Apply For a Credit Card Under 18
Updated: Oct 2, 2022
Credit cards are one of the most powerful financing options available for everyone. Every transaction with a credit card is paid through a loan and if paid in time then you occur 0% interest. Using your credit card and paying in time causes your credit score to rise. A credit score ranges from 300 to 850 and is a numerical rating that measures a person's likelihood to repay debt. A higher credit score signals that a borrower is at lower risk and more likely to make on-time payments. Lenders use credit scores to evaluate loan qualifications and credit limits.
Credit cards also offer benefits with the purchases you make. With every purchase, you stack points that can be redeemed as a reward. You can also earn cashback with every purchase making it a much better option than debit or cash as you'll be paying less for the same price. Sign-on bonuses and short-term bonuses are also available so make sure you find the best offer for a credit card. If you're looking for the best high-limit credit card make sure to check out our blog - Top 5 Best High Limit Credit Cards of 2022.
Credit cards offer an extra layer of security. Since credit cards aren't linked to your bank, transactions won't be directly withdrawn from your bank account. Unlike debit cards which if it was to be compromised and get fraud transactions, it would directly take it from your bank account and you would have to file disputes which is a pain in the neck.
Although credit cards are awesome the one problem for teenagers is, that they have to be 18 or over to get their own credit card. So, you can't register by yourself, but there is another way.
This method is called authorized user - a person added to a credit card account by the primary cardholder. Anyone can be an authorized user, so long as they meet the card issuer's age requirements. For example, the number one cardholder can also additionally select to feature their child, spouse, partner, or close friend as a certified user.
Being added as an authorized user to someone with a great credit history will increase your credit score and jumpstart your credit score from the beginning. When you turn 18 and apply for a credit card and it will show that you actually have a credit history which will cause you to have a high credit score from the beginning. This will benefit you by achieving lower rates for loans like car loans, mortgages, student loans, etc.
How to become an authorized user?
This process is very easy!
The primary cardholder has to add you as an authorized user. I recommend your trusted authorized user to be your parent or guardian who has a great credit score for you to benefit from. This process can either be done online, via the bank's mobile app or over the phone. It won't take much time at all as it can be completed within a few minutes. Your credit card will be mailed both to you and the authorized user, so you 2 would individually receive a card.
That's it now you're an authorized user!
The card balance will be charged to the primary account holder. Make sure to discuss how spending will work between the two parties.
How much does it cost to be an authorized user?
Most credit cards you're added to cost nothing to be added as an authorized user. Only a select few charge fees which could be $75 or more! Check with your credit card provider to see
How to remove an authorized user or get removed on the credit card?
As easy as it was to be added as an authorized user, it's that easy to remove. Depending on the card issuer, the authorized user can call and ask to be removed from the bank or the cardholder can call themselves to ask for the removal of any authorized users. Note that you can have up to four users authorized so make sure to remove them accordingly.
Can adding an authorized user hurt the primary account holder's credit?
Simply adding an authorized user won't impact your credit. Under some circumstances, the authorized user can affect your credit card. For instance, their transactions might push you over the 30% credit utilization ratio. In that case, your score might dip temporarily. The authorized user can also overspend and refuse to pay which puts you at financial risk as the primary account holder has to pay the bill.
These are already known things that can hurt your credit which if you performed it without having an authorized user would still hurt your credit. Make sure to discuss with the author user how you plan on budgeting spending or you can also choose them not to be able to spend it and they'll still build credit!
Overall, it's worth it to be added as an authorized user especially when you're under 18 because it allows you to establish a credit history and when you turn 18 you can open a credit card with a ready high credit score. And you as the authorized user don't have to spend money using the credit card as it accumulates the primary holder's credit score and adjusts your credit score based on that.
According to a 2018 study done by Credit Sesame, people who had a fair credit score saw their credit score improve by nearly 11% just three months after becoming an authorized user on someone's credit card.
What are you waiting for? It's very easy to be added as an authorized user. Get it done now!