In the U.S., you must be 18 years old to get a credit card, but extra restrictions apply until you celebrate your 21st birthday. So, in many cases, young adults may need to wait until they turn 21 to apply successfully.
That said, some alternatives are available to help increase credit card access for younger borrowers. Here’s what you need to know about getting credit cards once you turn 18.
Why 18 years old?
In the United States, the age of “legal majority” is 18 – which means that before you celebrate your 18th birthday, you can’t enter a legally binding contract.
A credit card is, in addition to a piece of plastic, a contract between you and the credit card issuer: you promise to pay back the money you borrow, while the credit card issuer promises to lend you the money.
Credit card access for people under 21
According to the 2009 Credit Card Accountability Responsibility and Disclosure Act (yes, that’s an acronym for CARD), adults under 21 who apply for a credit card must either have a cosigner or be able to prove independent income that can be used to repay debt.1
Unfortunately, this is a bit of a catch-22 because many major credit card issuers don’t allow cosigners.
Still, if you’re trying to get an early start on building your credit history or otherwise want the power of plastic in your pocket, you may have some options.
Apply for a secured credit card
Secured credit cards are, as their name suggests, “secured” by a cash deposit when the account is opened. That way, the card issuer has something to fall back on – a security – if you don’t repay your debt.
A secured credit card works a lot like a debit card, but your payment history can be reported to the three major credit bureaus: Equifax, TransUnion, and Experian. This feature can allow you to start building positive credit history with on-time payments.
Ask to be added as an authorized user
Younger borrowers might also be able to become authorized users of an established adult’s credit card – often a parent’s or guardian’s. As an authorized user, you’d get a credit card with your name on it connected to the owner’s account without submitting your own application.
That said, proceed cautiously because the account owner’s actions can directly affect your credit, both positively and negatively. If the account owner maintains healthy credit habits, like making on-time payments and keeping their utilization ratio low, being an authorized user can help build your credit. But if they make late payments or default, being an authorized user can hurt your credit, too.
Apply for a student credit card
Some issuers offer credit cards specifically for students. They may come with lower credit limits and no minimum credit score requirement to apply.
Of course, these cards are also subject to the 2009 CARD Act. You’ll still need to either prove independent income or enlist the help of a cosigner – if the card issuer allows, which, in many cases, they do not.
Get a cosigner
As mentioned, many major card issuers don’t allow cosigners anymore – because the need for one may indicate you’re a riskier bet as a borrower.2 But there are a few instances where you can be added as a joint owner or co-owner after someone else successfully applies for the card.
This is similar to being an authorized user, with one key difference. As a co-owner you are also liable for the account balance, while you are not liable as an authorized user.3
You’d need someone else to apply for the card in the first place and then be added on as a joint owner once they open their account. This process works differently for each card issuer, so review the information you receive from the card issuer for more information.
Get a full-time job
This option isn’t available to everyone – classes, internships, and other commitments may take up much of your time. But if you’re not planning to go to college or otherwise have enough time, you may qualify for a credit card on your own if you’re a full-time employee – which could help you meet the “independent” income requirement of the CARD Act.
There’s no specified required income, but remember that even full-time employment is not a guarantee you’ll be approved.
Getting a credit card under 18
Let’s be clear: you can’t legally get your own credit card under the age of 18. The only way for those under 18 to access a credit card is to become an authorized user of a parent or guardian’s card – and even this method requires some planning.
- Verify the bank’s minimum age requirements for authorized users. Some banks may not have a minimum age requirement, while some might require an authorized user to have already celebrated their 13th birthday. Either way, you’ll want to check before attempting to sign up.
- Set up a responsible spending plan ahead of time. While credit cards can be a helpful tool for younger people to learn how to manage money, they also enable you to spend more than you can afford. To prevent problems, have a frank conversation with the primary account holder about expectations and responsibilities before you start using your authorized user’s card.
- Consider a credit card for emergency use only. Some parents or guardians may be wary of offering their teenager a credit card without restrictions on how it can be used. In that case, consider setting a caveat that the card can only be used in emergencies – which can provide both people peace of mind.
- Remember, being an authorized user can hurt your credit score, too. As exciting as it is to work on building your credit history early, being an authorized user can hurt your credit history if the primary account holder doesn’t practice smart credit habits.
Getting a credit card when you're 21 years old
Good news: once you’re 21, the CARD Act’s “cosigner” rule no longer applies!
Still, you may want to look for student credit cards or cards otherwise geared toward those with new or unestablished credit. After all, many credit cards come with eligibility requirements that young adults with a blank-slate credit history may be unable to meet.
Here are some factors to keep in mind when applying for a credit card at 21:
- You can apply for a credit card on your own, but you still need to qualify. Cards designed for people with little-to-no credit are usually a better fit for young adults with short or new credit histories.
- You may have more options if you started your credit history early using one of the methods described above, like becoming an authorized user on a parent’s card. You can check your credit score for free once a year at annualcreditreport.com, which may give you more insight into which cards you’re more likely to be approved for.
- A cosigner can increase your approval odds if you can find a card that allows them. When you enlist a cosigner, the strength of their credit history is used along with your own, making it easier for those just getting established to be approved. You’ve heard us say it before, though: finding a credit card that allows a cosigner can be difficult.
- Look for a card with rewards that work for you – and no annual fees. Some credit card issuers charge an annual fee, which might be unaffordable to younger cardholders. Fortunately, plenty of cards don’t come with maintenance fees. Some cards offer rewards like cash back or travel miles that can put a little bit of money back in your pocket and make your next trip more affordable.
- Remember: only spend what you can actually afford. On average, Americans hold about $5,733 in credit card debt.4 By paying your credit card balance on time and in full – that is, not just the minimum – each month, you can take advantage of any rewards without paying interest or late fees.
Building credit is easier when you start early
Building credit history can be challenging for younger borrowers. Fortunately, tactics like becoming an authorized user on a guardian’s account or applying for a student credit card can help you get a leg up on creating a good solid credit history for a firm financial future.
Once you’re in the market for a credit card, explore the best credit cards for building credit.