How old do you have to be to get a credit card?

Few tasks have the lasting financial impact of building a solid credit history. For younger individuals, building credit early can help you later in life as you pursue life and your financial goals. Getting a credit card requires you to be at least 18 years old, but it may be challenging to qualify for a credit card before the age of 21.

Here’s what you need to know if you’re between the ages of 18 and 21 and want to apply for a credit card.

How old do you have to be to get a credit card?

Credit card issuers require applicants to be at least 18 years old to qualify for a credit card. However, you must prove you have enough income to afford monthly card payments.  Otherwise, you might have to get a cosigner with established credit history to qualify.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 introduced several consumer protections that required more transparency and fair business practices from credit card companies. The CARD Act also set a minimum age requirement of 21 to open a credit card without a cosigner or independent income. Individuals at least 18 and under 21 may qualify for a card if they can prove they earn sufficient independent income to pay their credit card debts. 

The law also protects young adults from unfair business and marketing practices by card issuers, including gift giveaways for applying for a credit card. 

How to get a credit card between 18 and 20 years old

If you’re between 18 and 20, you must prove you make enough income independently to afford credit card payments. Only independent income or assets count towards the income requirement. Income from a relative or friend doesn’t count, even if they plan to help cover monthly card bills. 

If you cannot show adequate income to obtain a card alone, you might be able to qualify with a cosigner or joint applicant. Not all credit cards allow you to use a cosigner.

How to get a credit card if you’re 21+

Even if you’re 21 or older, you must still meet issuer requirements to qualify for credit cards. Card issuers perform credit checks to determine an applicant’s creditworthiness and to set interest rates. Issuers may also consider other factors, such as your income or employment status when approving card applications. 

Some card issuers allow you to prequalify for a credit card without affecting your credit score. Prequalifying doesn’t guarantee approval, but it can better indicate which cards you may qualify for if you do apply.

Is there any way to get a credit card before 18?

In some cases, you may qualify for a credit card before you turn 18 years old by becoming an authorized user on a parent or legal guardian’s credit card. You will receive your own card to use for purchases, but the primary cardholder is responsible for paying the balance. As long as the card issuer reports authorized user activity to credit bureaus, you can build credit as an authorized user. 

“Having an authorized cardholder can be a mutually beneficial relationship when done right. If the authorized cardholder doesn’t materially use more of your credit line and you are able to make regular on-time payments, then your credit score should be positively impacted over time by the additional purchases. Additionally, if your account maintains good credit history, this will contribute to the authorized user’s credit score as well,” said Rick Conyers, assistant vice president, credit card products at Navy Federal Credit Union.

Most credit card issuers report authorized users’ account information to the three major U.S. credit bureaus. Provided the information is positive, such as on-time payments or low credit utilization, credit reporting can boost the authorized user’s credit score. Major credit card companies that report authorized users to one or more credit bureaus include: 

• American Express
• Bank of America
• Barclays
• Capital One
• Chase
• Citi
• Discover
• Navy Federal Credit Union
• PenFed Credit Union
• Synchrony
• U.S. Bank
• Wells Fargo

Double check with your card issuer to verify they report activity to authorized users’ credit reports before adding someone as an authorized user to your card account. 

How to build credit for beginners

Building credit isn’t difficult, but it can take time and discipline to master. Your first credit card can be a valuable asset to help you build credit. It’s not just about having a credit card, though, it’s how you use it and how it fits into your overall strategy to build credit. There are five primary factors used to calculate credit scores, each carrying a certain weight in score calculations: 

• Payment history (35%): The largest factor that affects your credit score is your payment history on credit accounts. A history of on-time payments reduces the risk for lenders and can improve your score. 

• Amounts owed (30%): Having a balance on your credit accounts is ok, but using a large percentage of available credit can overextend you financially, making you at a higher risk to default when borrowing. 

• Credit history length (15%): Having a longer credit history can have a positive impact on your credit score. Creditors look at the ages of your oldest and youngest accounts and the average age of all of your accounts. 

• Credit mix (10%): Having a mix of credit types can also improve your credit. Accounts considered include credit cards, installment and other loans, retail accounts and other revolving credit accounts.  

• New credit (10%): Opening several new credit accounts in a short period of time can negatively affect your credit score. 

Tips for using a credit card to build credit

There are credit cards designed for those just starting to build credit. After you’ve determined which card might be best for your needs and financial circumstances, here are some tips to consider when using your card to build a positive credit history: 

• Spend within your means: You should only make purchases with credit cards that you can pay off at the end of the billing cycle. 

• Make on-time payments: Payment history significantly impacts your credit score. Paying your bills on time can help boost your score and improve your chances of approval for credit cards and other financing later.

• Pay your balance in full: Credit card companies charge interest, called APR, if you carry a balance over each month. Paying your balance in full every month will help you avoid costly interest charges and credit card debt. 

• Keep your balance low: Just because you have a credit line doesn’t mean you must max it out. Only use your credit card for necessities you can afford to cover and maintain a low balance to improve your credit utilization ratio, which is the total amount of your credit card balances compared to the total amount of credit available to you. Keeping low balances shows that you’re managing your credit well and not overspending.

The importance of building credit

Credit opens up financial opportunities for consumers. Established credit can help you qualify for various financing options, from credit cards and student loans to mortgages and auto financing. Not only can having good credit help you qualify for financing, but it can also help you qualify for lower interest rates, saving you significant money when borrowing funds to cover purchases. 

Having good credit can help you in other situations too. For example, landlords often perform a credit check before approving rental applications and potential employers may consider credit history during the application process. 

What your credit score means

A credit score is a three-digit number that summarizes information in your credit report. It indicates how likely a borrower is to repay a debt. Most lenders use FICO credit scores when determining creditworthiness, but some may utilize other methods like Vantage Scores. A good credit score can help you qualify for more financing opportunities and better interest rates. 

Frequently asked questions (FAQs)