Besides getting a driver’s license or ordering your first beer at the bar, getting a credit card is one of the most “adult” things you can do. And establishing credit early on will only benefit you in the future.
So how early can you start? At what age can you start applying for a credit card, and what are some tips and tricks for establishing good credit early? Let’s answer those questions and more.
How Old Do You Have To Be To Get a Credit Card?
Technically, you can get a credit card when you’re as young as 18. However, getting approved for a card is difficult until you’re 21.
This is because of a little law called the Credit Card Responsibility and Disclosure Act of 2009. Essentially, this act is a consumer protection law to prevent unfair practices by credit card issuers. This law is in your best interest because it’s trying to ensure that young people do not become victims of predatory games that some credit card companies play.
How Can I Qualify for a Credit Card if I’m Young?
Even though you can start establishing credit at 18, it’s pretty difficult to do it alone. You’ll need to meet a few requirements to get your hands on one.
Mainly, you’ll need to show that you have a steady source of income. Since most young people at this age are in college or job hopping, this can be a major barrier between you and your financial literacy.
The good news is that credit card companies will often allow you to add a cosigner. A cosigner is someone who agrees to share responsibility for charges made on the card. Co-signing doesn’t affect someone’s credit score unless you cannot make payments, so this is a great way to increase your chances of qualifying to start building credit soon.
You might also want to consider a student credit card. These are for individuals who do not yet have a credit history and are often much easier to qualify for than most other cards. They have lower credit limits but might have higher interest rates, so just be careful when you select one.
What Are the Benefits of Establishing Credit?
Your credit score is a three-digit number that can have a hold on your entire life. Establishing credit early on can help increase your financial literacy down the road.
One of the great benefits of establishing good credit is that you’re more likely to be offered lower interest rates on personal loans or future cards. When lenders see that you’re a trustworthy borrower, they’ll be more likely to offer you lower rates. You’ll also be more likely to get approved for loans or other personal expenses when your credit score is high.
In Conclusion
If you’re an eager beaver ready to start establishing credit, then you might be able to start as young as 18. However, it can be hard to qualify, so getting a cosigner or signing on for a student card is usually the way to go.
You can also increase your odds by having a lot of money saved. And if you want to make saving fun, Yotta can pay out your interest in prizes. It’s the most fun you’ll ever have saving your money.
Get started today.
