You can officially give your child access to your credit card: why do this and from what age does the option work

Credit cards usually allow you to add an authorized user to your account. The minimum age for authorized users depends on your credit card issuer. Some parents choose to use this loophole to give their children a financial head start, as children are not allowed to apply for their own credit card account until they are 18 years old. CNET.

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If the primary cardholder has a solid credit history, this maneuver allows an authorized user to bypass limited or bad credit history.

What is the minimum age to be an authorized credit card user?

There is no law preventing you from adding a 2-year-old child as an authorized user to your credit card account, but many major credit card companies have some restrictions.

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For example, American Express allows authorized users starting at age 13, while Discover allows users aged 15 and over to become authorized users. Capital One, Wells Fargo, Chase and Citi have no minimum age requirement.

Please note that some issuers, such as Chase and Wells Fargo, will not report your account to juvenile credit bureaus.

What are the benefits of adding a child as an authorized user?

Boost your child's creditworthiness: While some credit card issuers will not report a minor's authorized account to a credit bureau, there are those that do offer a way for kids to get credit at an early age. This can help them qualify for better interest rates and credit cards in the future.

Teach your child about finances: Adding your children as an authorized user to your account can also help you teach your kids how to spend, save, and budget. If you want to help your child learn the financial habits of responsible credit card use and the potential implications and benefits of responsible credit card management, adding them as an authorized user to your card is a good place to start.

Earn extra rewards: If your child is an authorized user of your rewards credit card, their spending will earn rewards. As the primary cardholder, you are free to use these rewards as you see fit.

What are the disadvantages of adding an authorized user?

Whenever someone's name appears on your bills—whether it's a mortgage, a loan, or a credit card—you need to consider the risks. You are ultimately responsible for paying the bill, so if your authorized user makes a spending that you cannot afford, you could hurt your credit score.

Their activities can also affect your credit score. For example, your loan utilization ratio, which is the percentage of your credit limit used, should remain at or below 30% to achieve the best results for your loan. But if your authorized user spends extra money, it can lower your credit score.

How to add a child as an authorized user?

If you would like to add your child as an authorized user of an existing credit card account, please call your card issuer. In most cases, the card company will ask the child for a social security number and birthday to verify their age and associate the child's name with the account. You can also add a child as an authorized user when opening a new credit card account.

What is the difference between an authorized user and a joint account holder?

An authorized user is added to a credit card account by the primary cardholder who is financially responsible for making payments on the account. Authorized users can only make purchases with your card; they cannot make billing decisions on behalf of the primary cardholder.

Meanwhile, as the primary or co-owner of an account, you can add or remove an authorized user at any time and control other aspects of the account. Both joint cardholders are liable for the debt as if their names were on the mortgage.

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While it can be beneficial to add a child as an authorized user to your credit card account, you should ensure that you discuss the details and expectations with the child and ensure that the child understands the potential consequences of irresponsible spending.

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