While 18 is generally the youngest age you can legally open a credit card account, there are restrictions for applicants between the ages of 18 and 20. In this article, we’ll provide requirements and considerations related to age and applying for a credit card, as well as information to help you decide whether you are financially ready to consider one.
Getting a Credit Card Between the Ages of 18 and 20
Because getting a credit card involves entering into a legal agreement, you generally must be at least 18 years old to apply for one. Obtaining a credit card when you are under 21 isn’t always a straightforward process, but you do have options for getting one.
If you are between the ages of 18 and 20, you will have to provide financial information indicating your ability to independently pay for debt arising from the use of a credit card in order to be approved for one. Another option is to be added as an authorized user on someone else’s credit card account. Unlike applying for a credit card, an authorized user typically does not have to be 18 or older, although specific age requirements depend on the credit card issuer. If you are applying for a credit card and new to credit, a secured credit card may be a good option. We’ll discuss these two options more below.
Becoming an Authorized User
An authorized user is someone who has permission from the primary cardholder to use the credit card account. Once you’re an authorized user, you’ll receive your own card with your own name. You’ll be able to make purchases with the credit card as you would any other credit card, and your spending activity will appear on the primary cardholder’s account. However, the primary cardholder will be responsible for any payments, so it’s essential that you and the primary cardholder establish guidelines for using the card, such as a repayment plan if the understanding is that you will pay for the purchases you make on the card.
In some cases, the activity on the credit card account will appear on your credit report. Therefore, if the primary cardholder manages the account responsibly, including maintaining a positive repayment history, being an authorized user could bolster your creditworthiness and make credit easier to get in the future.
If you’re unsure about a card issuer’s authorized user requirements, check their policies before making a decision.
Card applicants between the ages of 18 and 20 may consider a secured credit card, which requires a security deposit as collateral. Secured cards typically have less stringent creditworthiness requirements than unsecured cards, so they could be a good option for someone who is applying for their first credit card and looking to start building credit.
Generally, the limit for the card will equal the deposit amount, so it might not be as high as the limit on an unsecured card. Still, it can function as a great first step in building your credit history.
When Do I Know I'm Ready to Get a Credit Card?
There could be long-lasting consequences for your finances and creditworthiness if you accrue credit card debt and can’t pay it back. Because of this risk, you should consider carefully whether you’re financially ready for the responsibility of a credit card. In the following sections, we’ll discuss some considerations to help you decide.
You Know How to Stick to a Budget
An important factor in deciding if you are ready to get a credit card is whether or not you know how to plan and stick to a budget.
Budgeting successfully means creating a spending plan based on your income to organize your finances. It can help you determine how much of a monthly credit card payment you can afford, so that you can limit your spending on the card accordingly. With this plan, ideally you will be able to pay the statement balance on your credit card in full each month by the due date to avoid interest.
In addition, if you already have a history of making sensible budgets and keeping your finances on track, that’s a good sign you can manage a credit card.
You Are Ready to Start Building Credit
You can use a credit card to help start building credit by establishing a positive repayment history.
Repayment history tells the story of how you’ve managed your debt, and it’s an important factor in determining your ability to access future credit. If you are prepared to use a credit card responsibly with the goal of building credit over time, you may be ready for a credit card. Responsible use means at least making the minimum payment on your credit card by the due date each month. You should also be mindful of interest charges that accrue from paying only a portion of your statement balance each month. Interest charges could become difficult to pay off as they accumulate over time. To avoid interest, you should pay the entire statement balance by the due date each month.
You Have a Reliable Source of Income
Getting a credit card could lead you to financial difficulty if you don’t have enough income to pay off the debt on the card. Having a reliable source of income that will enable you to pay the statement balance by the due date each month is a good indication that you are ready for a credit card.
Find the Right Credit Card When You’re Ready
With this information, you can better understand age-related requirements and options relating to applying for a credit card – and whether you’re ready for that responsibility. Moving forward, make sure to look at Citi’s credit card offers to help find the card that best suits your financial needs.