A quick way to jumpstart your child’s financial journey is to make them an authorized user on a credit card. It makes for a great 18th birthday present. However many cards allow children as young as 13 to become authorized users.
Benefits of Authorized Users
By making young adult children authorized users, their credit profile will get the credit history from your card. This will give them a credit score without having to try to build credit with substandard products. You want to make sure you add them to a card that has a good history of on time payments and is at least several years old.
In many cases, young adults can quickly get an initial FICO score in the mid 700 range! This will allow them to get their own credit cards and loans much quicker and with better terms. After a couple years, they can be removed as an authorized user as they will have built up their own history and can stand on their own.
Quick Facts
- Adding an authorized user (or several) will not impact your credit score directly or hurt your credit
- You are still responsible for the payments on the card. If your authorized users make significant charges that you cannot pay, that will increase your utilization and can hurt your score.
- Authorized users can be removed at any time with no impact.
- You don’t need to actually give the authorized users a card / allow them to charge to the card for them to benefit. Just by adding them, they will get all the benefits.
- Most credit cards allow authorized users to make payments. However, they can’t change, alter, or see most other information on the account.
- Ensures young adults have a payment method in case of emergencies.
- Never add an authorized user you do not trust or one that is not a close family member.
Watch this video for some more details and how Brad @ TheFireStarterPack helped his oldest daughter out when she turned 18: