Credit Cards

When Are You Old Enough For Your First Credit Card?

If you are 16 or 17 years old, you might approach your parents asking for your first credit card. One of two things can happen. They will either give into your request and help you get an account, or shoot you down and tell you to wait until you’re an adult. And if the conversation doesn’t go your way, you probably can’t wait to turn 18 and apply for your own credit card.

But don’t fill out your application so fast. Although you’re technically an adult at the age of 18, becoming an adult doesn’t automatically give you the green light for a credit card.

If we rewind time and go back 5 or 10 years, getting your first credit card at 18 was as easy as opening a bank account. As long as you were enrolled in college and had some type of income, many credit card companies were happy to issue a low-limit credit card. It was a way to help young adults establish a credit history while in school, which made it easier for them to buy a car and purchase a home after graduation.

Naturally, the ideal was that college students would use their credit cards responsibility and build a solid credit score. But in most cases, the opposite occurred.

Rather than use credit cards for books and emergency expenses, many young adults went on shopping sprees, partied and took vacations they couldn’t afford – racking up a bunch of debt that they couldn’t pay. And when they couldn’t pay the debt, the creditors came knocking.

It’s a different story today, as the Credit Card Act of 2009 basically pulled the plug on easy credit approvals for college students. Before 2009, credit card companies would bombard college students with pre-approval credit card offers and heavily promote credit cards on college campuses.

Back then, any college student with a pulse and a bank account could get approved. Today, attending college and being over the age of 18 isn’t enough to qualify for a credit card.

According to new laws, no one under the age of 21 can qualify for a credit card without a cosigner or proof of adequate income. In other words, young adults must demonstrate the ability to repay the credit card, or have someone on the account who’s willing to assume responsibility for the debt if they default.

The cosigner doesn’t have to be a young adult’s parents, although they’re probably the best people for the job. Parents who cosign are more likely to be involved in their child’s financial life. They can steer their child in the right direction and correct bad money habits before it’s too late.

This may not be the best news if you’re looking forward to getting your first credit card at 18. But given how the average college student has over $3,000 in credit card debt, tightening the rules has long-term benefits.

Without a credit card in your pocket during your college years, there is a lower risk for excessive debt. And since you have to rely on cash, you’re forced to budget and live within your means.


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