Credit/debit cards for almost 18 year olds

[mlktwins]

Hi all! If not for the pandemic, I would have dealt with this a year or 2 ago 😆.

My boys need a debit/credit card (or both) at this point. They are 17.5 and will be going off to college next year. They haven't really needed anything before and just took cash with them when they went out. Now that they are older, and one is dating, and we need to get them something easier. 

I tried to add them to my Costco card, but they need to be 18 and have their own membership. I did just add them both to my Discover card. Anything else I should consider credit card wise? I would like them to use this occasional to start establishing some credit history.

As for debit card, they don't have a checking, but I can open a minor checking account and just make sure money is transferred from their savings to their checking (I plan to have the boys taking care of this). I don't use a debit card - I had one a long time ago and would not want to pay any fees so I just use my credit card. Anything I should know about a debit card for minors?

Thanks so much!

[HomeAgain]

You may want to look closer at a debit card for them.  Most people do not pay fees to use theirs. 

Oldest ds relies on a combination of cash, his physical debit card, Venmo, and ApplePay.  He has a credit card for just in case, but it's a Mastercard since it's more accepted over Discover.  But we set him up with his checking account and debit card when he began high school.  I'm glad we did.  A lot of places don't accept cash much anymore and the debit card gave him more freedom.  He's 23 and his youth checking rolled over into an adult one when he turned 18, but it left both dh and I on his accounts.  We've encouraged him to open up one without us on it, lol, but he doesn't really care.  He says it's handy for moving money back and forth between us and we're not the type to get into his business.

[2squared]

IME, Debit cards don’t have fees as long as you use them as a credit card. 

My teens have debit cards attached to their checking accounts, and they are authorized users on my credit card. They put my credit card into their ApplePay. When they are 18yo and in college, they also get their own credit card. 

My teens use Venmo a lot too. Cash isn’t used very often anymore. 

Edited December 12, 2022 by 2squared

[gardenmom5]

My sil put her kids on costco cards when they were in high school so they could go do her errands.  I think there is a limit of two people on a costco card, so if it's you and your dh that would be two people.  when do they turn 18?

we did visa cards when we sent our girls off to college.  we wanted to make sure they could book a flight if needed so the limit was at least high enough. dh's name was on their cards- but they were the only ones using it.  They also built up a credit score.

for somethings - debit cards will "hold" more than the actual charge before releasing it, so we really don't use them.

[teachermom2834]

My high school/college kids had debit cards attached to their checking accounts (though they don’t use checks anymore) and were authorized users on our family credit card. 
 

The debit card works well for them but I do worry that, in our experience, debit cards have seemed to get hacked more often than our credit cards and when they do it is a bigger inconvenience because you are out the actual cash until it is resolved vs. just putting a stop on the card and getting a new one. So I have always had them use our family cc at gas stations (which is where our debit cards were compromised in the past) and anywhere that looks kinda sketchy. 
 

The kids do use Venmo but that isn’t super safe. If that gets compromised they are out of luck. So my college kid that has a big balance in his account doesn’t have Venmo linked to it. I think the other kids have Venmo linked to an account they keep very little in so that if it was compromised they wouldn’t be out a lot of money. Venmo is convenient and there will be times that is how they are asked to pay for stuff. But it isn’t very secure. 

As far as building credit- some companies report authorized users to the agencies and that helps build credit but others don’t, apparently. We have capital one and it has helped my boys build credit. We have had the card over 15 years and on my 19 yo’s credit report it shows him as having had the account for 15 years. So he gets all the benefits of having had the account as long as dh and I have even though he’s only had it a couple years. 

[ScoutTN]

Dd has both checking and savings at our credit union and a debit card on her checking. I am a maker on her acct and can transfer funds to her. She has a job and regular income and uses her card for gas, Starbucks, clothes, lunch out etc. No fees of any kind on her accts. 
 

She is also an authorized user on my credit card. 

[athena1277]

Both of my teens, 19yo and 15yo, have debit cards oldest is an authorized user on dh’s credit card to build credit and to us in case of emergencies.  She’s in college away from home and needed to use the credit card (with permission from us) several times to pay for urgent care and an ER visit.  When dd started working, she got paid faster and with less hassle by having her paycheck direct deposited into her account, instead of waiting for a paper check.

I will say that them having debit cards simplifies things when they need money for things.  Their cards are under mine and dh’s account, so I can transfer money to them easier than I could give them cash.  They can see only their accounts in the bank’s app, but dh and I can see everyone’s and transfer between accounts.  

[BusyMom5]

Once they turn 18 they can apply for a Discover Student card.  My teens also have debit cards for their bank accounts- I can easily transfer funds if needed to their bank accounts.  

[Carrie12345]

We put all 3 oldest kids on our Discover because it’s dh’s oldest card and has a high limit. It’s only for emergency use (they use their own debit and/or credit for regular purchases), but it gives them EXCELLENT credit scores for getting their own cards, apartments, and whatever else. Before getting individual accounts, their credit histories are/were older than them! 🤣

Pretty much all banks issue debit cards with CC logos. No fees except to withdraw cash. 

[Carrie12345]

I meant to add, different banks have different age requirements. One dd had a regular “checking” account with Dh as a co-holder until she turned 18. Other dd went to a different bank that allowed 16yos their own account. 

[Bambam]

We went to our local credit union (where my kids already had savings + checking accounts). Their credit card has no annual fee, decent cash back percentage - but you have to be 18 in order to enter into a legally binding contract. Once they turned 18, we took them down there. Both had small incomes from jobs, so both got a small limit CC in their own name. Instruct them to pay it off every month (but wait to get your bill before paying it off, so they will report for your credit rating).  As they got older, made more money, they requested a credit limit increase, and it was granted. 

I would suggest reviewing the pros/cons of credit cards vs. debit cards and discussing with the young adults to decide which option is best for them. 

[Dmmetler]

L has a debit card and is an authorized user and has a card for one of our credit card accounts. We had to wait until age 18 to get a debit card for the HSA, which was a bit annoying for things like prescriptions. 

[Roadrunner]

Mine has his account attached to ours and his card is a debit. 
I am wondering if there is a prepaid credit card I can just add money as needed to prevent him losing the card and not realizing it’s gone for a week. 

[Miss Tick]

27 minutes ago, Roadrunner said:

Mine has his account attached to ours and his card is a debit. 
I am wondering if there is a prepaid credit card I can just add money as needed to prevent him losing the card and not realizing it’s gone for a week. 

Does he have a cellphone? In my experience people are much less likely to lose them and much faster to notice when they are gone. If that is the case he could probably attach his credit card to that. It would work wherever you are allowed to tap a physical card for payment.

[Roadrunner]

31 minutes ago, Miss Tick said:

Does he have a cellphone? In my experience people are much less likely to lose them and much faster to notice when they are gone. If that is the case he could probably attach his credit card to that. It would work wherever you are allowed to tap a physical card for payment.

I am getting old! 
of course. That’s a perfect solution! He uses Apple Pay right now with his card. 
 

Am I the only one uncomfortable with a credit card? 

[Miss Tick]

33 minutes ago, Roadrunner said:

Am I the only one uncomfortable with a credit card? 

You mean for your teen? No. Until recently I could not imagine adding a teen to my credit account, Horrors! But here I am, it is convenient, my teen has been trustworthy, etc. Los of reasons it is ok. However I *feel* like I'm joining the "except for my ____" chorus. All politicians are bad, except for mine, all schools are terrible, efm, teenagers are not reasonable credit risks, efm...

 

[City Mouse]

My kids got their own checking accounts with debit cards with their first jobs. That means DD was 16 and DS was 14. My DH was on each account and could transfer additional funds as needed. This worked fine even with travel without parents. We intentionally did not “give” either of them credit cards in their names, and we never found that it was needed. My DD got her own Discover card at some point without any assistance from us- probably one of the college student cards mentioned earlier. DS now 20 does not have a credit card and hasn’t found a need for one, but he does still live at home. Where we live it isn’t that unusual for people to not have credit cards.

 

[crazyforlatin]

Does the teen need to be 18 years old to be authorized user on parent’s credit card? Dd has a debit card since 16 yo that is attached to her own bank account with money from summer camp. 

[Amy in NH]

When they were 14-16 I set up each of my kids with a checking account with both of our names on it.  I got them debit cards on their account, which they could use anywhere as a credit card up to the amount that was in their account (it will be declined if the amount is more than they have).  The only fees happen if they use the card at an ATM not attached to their bank.  I was able to set up online banking with those accounts because my name was on them, and it allowed me to transfer money to them when they were away at college.

[teachermom2834]

5 hours ago, crazyforlatin said:

Does the teen need to be 18 years old to be authorized user on parent’s credit card? Dd has a debit card since 16 yo that is attached to her own bank account with money from summer camp. 

No. My kids were younger teens (15 maybe?) but I know someone on here has said they got them for very young kids for the purpose of building credit.

[teachermom2834]

5 hours ago, Amy in NH said:

When they were 14-16 I set up each of my kids with a checking account with both of our names on it.  I got them debit cards on their account, which they could use anywhere as a credit card up to the amount that was in their account (it will be declined if the amount is more than they have).  The only fees happen if they use the card at an ATM not attached to their bank.  I was able to set up online banking with those accounts because my name was on them, and it allowed me to transfer money to them when they were away at college.

We did this and the authorized user on the family card. The combo proves useful for different purposes and also served to build credit. That wasn’t our original thought with the credit card but all of our kids have found that aspect useful. For example one son didn’t need to pay the standard deposits setting up utilities at his first apartment because of his credit. A couple times they have expected to need us to co-sign something and then it came back that they didn’t need us because of the credit they had just from having been on our card. 
 

So all kids are different but so far our kids have been able to be on our card responsibly and they have been able to use the credit advantages getting started as young adults without going out and doing something crazy with their high credit score. The one kid I have that is the most at risk for impulsiveness has just not gotten his own credit card at all even though he is almost 23 and would qualify. So being on our card has allowed him to have a card when needed even into adulthood while not having something he thinks could possibly be an issue for him. 

[chiguirre]

12 hours ago, Miss Tick said:

You mean for your teen? No. Until recently I could not imagine adding a teen to my credit account, Horrors! But here I am, it is convenient, my teen has been trustworthy, etc. Los of reasons it is ok. However I *feel* like I'm joining the "except for my ____" chorus. All politicians are bad, except for mine, all schools are terrible, efm, teenagers are not reasonable credit risks, efm...

 

If it makes you feel better, Uncle Sam is handing government travel cards out to teenagers, too.

[El...]

3 minutes ago, chiguirre said:

If it makes you feel better, Uncle Sam is handing government travel cards out to teenagers, too.

So true! With a LOT of rules attached, though. 

[BlsdMama]

Our kids at home (17, 16, 14) have debit cards associated with their own checking accounts. The accounts are "nested" under our checking account. If they needed money transferred into their accounts we can do it via an app on own phone.