Do you have a graduating senior or young adult in your life? You can help these young adults with credit scores and credit cards. First, a young person needs to appreciate the value of money, and understand how credit cards work. They should learn to use credit cards like a debit card–spend money that you have, and pay off the credit card in full and on time.
Youth Debit Cards
When kids are young, you can set up an account with your local bank or credit union. They can learn how to use a debit card from this bank. At age 18, teens can sign up for a credit card. I recommend signing up for a credit card where they had a debit card. My kids all had accounts and debit cards with Mountain America Credit Union. They each applied for a MACU credit card at or after 18 and were approved with a $500 credit limit. They used their credit cards and paid them off each month. After having the credit card for 6 months to a year, young adults can apply for another credit card. This starts building their credit.
Authorized User
If you have great credit yourself, you can add your young adult to one or more of your credit cards. Note: you can add children before they are 18 as authorized users to your credit cards. Add them to accounts that have been open a long time and have a high credit limit. You don’t have to give the card to your child. Being added as authorized user will increase their credit limit and credit history.
Travel Cards
Once young adults have had two credit cards for at least a year and they have income, they might be able to be approved for a travel credit card. All 3 of my kids have applied and been approved for travel credit cards.
