So, What’s the Minimum Age for a Credit Card?

Posted on : 02-09-2010 | By : Rachel Rogers | In : Credit Cards

Tags: Card, Credit Card, Minimum Age

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For a while there, it seemed like there was no legal minimum age for a credit card at all. We’ve all heard tales of babies getting credit card applications, and I personally know someone whose young goat got one. (I’m not kidding here).

Things are still nebulous on this front, even in the wake of the infamous Credit CARD Act of 2009, which straightened out a lot of things credit card related. Let’s take a brief gander at the issue.

Well, legally…

Remember the heady days when credit card companies tempted college students with the promise of nectar and ambrosia–that is, beer and pizza–if they’d just sign up? I do, and before February 2010 many a young adult started down the slippery slope to financial penury that way.

Before the Credit CARD Act, you were considered financially responsible at the age of 18. Not anymore. As with the drinking age, financially responsible now hits at age 21.

There’s one caveat: if you can prove you have the money to pay your bills, you can still get a credit card on your own recognizance before you’re 21. But it isn’t easy.

Meanwhile, back in the real world…

As everyone knows, little things like age limits aren’t effective if older people don’t want them to be. Parents can easily piggyback their kids onto their credit card accounts and have cards issued for them, even for teens as young as 13 or 14.

In fact, some parents get their kids started early just so that they can teach them to use credit cards without abusing them. The idea is to create healthy spending habits and build credit while the parents can still control their kids’ finances. Often, these cards also serve as just-in-case financial safety nets.

Kindercredit

Credit card issuers actually expect this, so they offer special prepaid cards with strict limits (usually a max of $500) for parents to give their kids. The Visa version is called Buxx, the MasterCard version the Allowcard.

The company line is that these cards are safer than cash, offer full parental control, and can help young people learn to budget. That may be so, but my recommendation is twofold: first, don’t give a kid younger than about 16 a credit card, and watch their statements like a hawk.

That way, you can cut them off whenever you need to. But of course, that depends on how responsible your kid is: some young people are more responsible at age 12 than others are at 18.

So what it comes down to is what it comes down to with most things involving your kids: their minimum age for a credit card is up to you.