s/o Debit cards for teens - what age for 1st credit card?

[SebastianCat]

The thread about debit cards for teens got me thinking.  

 

First, at what age do you get your teen a debit card?   (I asked this on the other thread, so if you answered there, no need to answer again.)

 

Second, at what age did/does your teen/young adult get a regular credit card?   Is it a secured card?   Do you have any other wisdom or advice to teach teenagers about how to start building a good credit history?

 

Thanks.

[Guest]

I am answering theoretically, but here is what i would like to see before a kid got a credit card..

 

Regular income.

A written budget that has been adhered to for 6 months.

A financial management class.

Actual fear and trembling at the thought of going into debt for anything other than a house.  (In other words, the credit card is just convenient cash, and it is paid down to zero at receipt of the bill.  And it is not put on the budget as "credit card" but the items are broken down into actual budget items.)

[regentrude]

I think mine had their prepaid cards since age 14 or so. Regular debit card : DD since she had her own checking account at age 17; the bank made an exception for her since she was a first year college student - normally their account holders have to be 18.

 

Credit card is difficult. The laws changed recently, and it is no longer easy for college students to get credit cards (it was very easy a few years ago). So, unless the student has enough of an income, no card.

 

Best way to build credit is to put the student as authorized user on a parent's card. And then paying off student loans is another good way to  build credit.

 

ETA: I would make sure the young adult understands that a credit card should be paid off monthly in full to avoid fees and interest, and that owning a credit card does not mean they can now afford something for which they don't have the money already. They should view it just a convenient means of paying, not as a means of borrowing money.

We model this and talk about it frequently. Living with a prepaid card is good training in this respect.

[Pawz4me]

16 for both debit and credit cards.

 

Their debit cards are attached to their own checking accounts, and they can spend whatever money they have however they want.

 

They're both authorized users on one of DH's credit cards.  We got credit cards for them for several reasons --

 

We didn't want them using their debit cards to pay for gas (too many skimmers at gas stations!)

It's more convenient for us for handling their expenses that we pay for

The cards "earn" us a goodly amount of cash rewards

We wanted them to start building their credit scores as early as possible (oldest DS's score is already very close to 800)

 

We've talked to them about the importance of using money and credit wisely since they were old enough to understand.  They've seen first hand from us what having a great credit score can do for you nowadays.  We kind of figured if all of our advice hadn't "taken" by the time we got their cards then we'd really messed up somewhere along the line.  So far there haven't been any problems.

[QueenCat]

Both got "authorized" user cards associated with our credit card at around 14-15. That's when they started flying regularly without us. 18 for unsecured, low limit cards in their own name.

[TechWife]

My son got a debit card at the age of 16 when he opened his own bank account. He will get a credit card whenever he wants to and can pay the bill on his own. We have no plans to cosign a credit card application. We will recommend he get one his senior year of college, if possible, in order to build his credit rating. 

 

ETA: If he does any study abroad, we will likely get him a credit card on one of our accounts for the duration of his trip so that he has access to emergency funds. 

 

 

[Guest]

Listening in for the future....

 

DS is 8 and has the PIN number for my debit card and is allowed to use it to buy things online or in stores. He has two "jobs" that provide some decent, regular income (for an 8yr old).

[Chris in VA]

My dd has an atm card, but that's it. We don't allow any credit cards until they are old enough to do it without us, and then we advise being very, very cautious. Olders have car loans to build credit--one paid off his car early, so he's looking for another longer-term item loan to build his credit, but he's not concerned at the moment. The other needs a steadier income before getting a cc--probably won't, because he doesn't believe in them.

I'm sure my misuse of credit contributed to the caution.

[Lolly]

16 when they start driving on their own. We do not like debit cards. Our kids all have credit cards. I am listed on their card in order for them to be able to qualify (technically, they are on my card. But we have a separate account for each dc). They are responsible for paying the bill.

[AK_Mom4]

All my older kids got debit cards when they opened their checking accounts. This happened around age 16 when they got their first jobs with pay checks (before that they just had savings).

 

I'm sure DS23 has a credit card. None of the others have needed one yet.

[ScoutTN]

I had one at 16 when I was traveling cross country (flying) 3 or 4 times a year and taking the train from NYC to New England. No debit cards then, so I had a low limit but enough to get a hotel, meals or a cab.

[SebastianCat]

Thank you for the responses.   I remember my freshman year of college (not even 18 yet) how many credit card applications showed up in my mailbox, and at the time it seemed like "easy money."   Boy, was that a hard lesson.   I'm hoping to avoid those pitfalls with our kids, but if they're going to mess up, I'd rather them do it while they are still at home under our guidance.   

[katilac]

My dd was 16 when she got a credit card, in her name but tied to our account. 

 

I think the money talk is like the sex talk - you can't just sit them down one day and tell them everything they need to know! It needs to be an ongoing conversation from a young age. 

 

We prefer credit over debit for several reasons. Financially, it makes more sense to pay a credit balance in full monthly, versus having the amount immediately taken out with a debit card. Credit cards are more secure and the user has a lower liability. Finally, I don't want my teens at ATM machines - high danger spots for being robbed. 

 

Edited to add that 16 is not a magic age for our kids to get credit cards. It's like cell phones: they get them when they need them, when they are often at activities and not in our company. 

[MinivanMom]

I applied for two credit cards the moment I turned 18; you gotta love all those credit card applications they (used to) throw at new college freshman. I used the cards occasionally and paid them off every month. I didn't have any guidance, but not accumulating debt or accruing interest is pretty common sense. I know that my college also inundated us with info about budgeting and financial management; the information is certainly there for any teen who would like to acquire it.

 

By the time I graduated from college (at 21) I had a good credit history in my own name so I could buy a car, move cross-country, and establish myself without any assistance . . . which was good since I didn't have a family support system.

 

[Pegasus]

We are another family that doesn't use debit cards. DD just recently got her first credit card at 18.  It is a joint card with me since she has no independent income.  We wanted her to have one so that she could buy her textbooks, etc. without DH or me having to tag along to the college bookstore as well as a way for her to start building a credit score.  She has always been very frugal with money so we weren't worried about her running up a balance.

[gardenmom5]

Varies with child and need.

[SparklyUnicorn]

Ugh yeah..credit card.  Frankly, don't do it.  LOL

 

Ask me how I know.

 

 

[Hikin' Mama]

My kids got a debit card around age 16, which is when they got checking accounts. My sons had jobs before that, so they had money to manage.

 

I don't think everyone should have a credit card. It is way too easy to rack up the unneccesary debt with those. With that said, I did advise my middle son (20yo) to get one, because he is very responsible and good with his money. He really is an exception, though, for his age. He has a small limit and uses it to buy his books or a plane ticket home. He never carries a balance, but pays it off every month. I don't even think a lot of older adults should have one. I know too many people who impulse buy with them. Even if you have the money to pay it off every month, it makes purchasing WAY TOO easy, imo. I do have one, btw, and use it quite a bit, but I still would advise against them for many people, especially young people.

[Alessandra]

I can't speak generally, but I can say what we did.

 

I had to unexpected back out of a trip to Washington where ds age 15 was playing chess. So he went by himself, staying with relatives in a nearby suburb. I did not want him to carry wads of cash, so I got him a gift card from my bank (no fees). A lot of places do not take cash easily -- prepaid cards on the Washinton Metro, the Bolt bus (in case he had to change a reservation). Checked bagge fees at airports must be paid with a card, no cash. Using a card was an easy way to track expenses.

 

Then I also opened a tiny checking account, in his name, but with me as the custodian, in order to get a debit card, because Uber taxis will take debit, but not gift cards. Also I wanted to be able to add money in an emergency. (Later this summer, ds was on a plane and I forgot about checked luggage fees, so added money to the checking account by going to the bank.) A debit card also allows for a cash advance, and a gift card does not. The debit card has my name on it. :-( Another problem with debit cards is that I cannot access the info online unless I put ALL my accounts online. Oh, and my particular bank does not want to give checking accounts to 15 year olds, but they did because we convinced them it was an emergency. Other banks, like Chase, advertise student checking accounts.

 

There are kid credit cards, like VISA buxx (spelling?). I think these sound wonderful, but not all banks offer them. My bank has something similar, but the only way I would be able to fund it was by getting either a debit or credit card for my account and adding money online. I do not want another credit card, or any debit card or online banking....

 

Btw, ds drew up a budget before his trip and prepared a statement after the trip. On his second trip, he had to pay for some items that I would have covered because he had no recollection of where that money went. It was a small amount, but a good lesson. He has to save receipts or scan them or, at minimum, make a note of expenditures.

 

Ds has been good with money, so I plan to make him an authorized user on one of my credit card accounts. When he is 18, I will help him get a credit card of some sort.

 

I also like to get proper IDs for my kids. They both have non driver IDs.

 

ETA. I also use gift cards to help ds get used to budgeting. For example, he has a phone that is paid by the month. I pay most, he is responsible for some. So he got a gift card that covers three months of what I would pay. If he uses the money for something else, no phone.

[Carol in Cal.]

DD is 19 and still only has a debit card.  She lives in another city but does not drive, or else I would force the issue.  But she doesn't want a credit card because she doesn't want to have to pay monthly bills and she is plumb terrified of debt.  I think she should get one to establish good credit, using it a little but paying it off completely each month, but she can't stand the idea of that much complexity.  Whatever.