Yahoo Finance Is It Time To Get Your Teen a Credit Card? Here Are the Best Ones
Giving teens credit cards while they are still under your roof offers an opportunity for you to teach them good money management skills early in life.
More teens today are carrying debit cards like Greenlight — rated one of the best debit cards for kids — Chase First Banking or Capital One Money Teen Checking. As your teens get older, parents may consider adding a credit card to their financial arsenal.
The Future of Finances: Gen Z & How They Relate to Money
Find Out: If Your Credit Score is Under 740, Make These 4 Money Moves Now
How Old Does Your Teen Need To Be To Get a Credit Card?
To open an unsecured credit card, young adults need to prove they have the ability to make payments on their own if they are under age 21. The Credit CARD Act of 2009, effective in 2010, has barred issuers from extending credit to those under age 21 unless they have proof of income or an adult cosigner.
Those who are age 18 or older, however, are allowed by most credit card companies to be added to the credit card of a parent as an authorized user. Should a parent decide to add a teen on as an authorized user, they can begin teaching them good money management skills and best credit practices.
Take Our Poll: Do You Believe in Quiet Quitting?
Is It Worth Getting a Student Credit Card?
It may be tempting for parents to get their teen a student credit card, where they can earn a lower interest rate for making good grades. But these cards are designed for students who are at least age 18. Those ages 16 or 17 wouldn’t qualify.
On the other hand, the following 10 credit cards are great for authorized users, as well as 18- and 19-year-olds who are just starting to build credit in their own name.
Of course, if you have excellent credit and can obtain a top-tier rewards card and add your teen as an authorized user, you can accrue rewards points even faster, allowing the whole family to benefit.
Make sure to explain how important it is to pay off the card when the bill comes due to avoid interest charges, which add up quickly. Determine how much your teen can afford to pay toward the credit card each month and warn them not to exceed that spending limit each month. (Ideally, they should only use a portion of their available credit: not all of the available credit.) Make sure your teen is able to pay on time.
When you feel your teen is ready for their own card, one of these 10 cards could be a perfect choice as they build their credit.
Advice from CardCritics: Pay No Interest Until 2024 With These Top-Rated Cards
Best Overall: Capital One Platinum Mastercard
With no annual fee, the Capital One Platinum Mastercard is one of the best, overall, for adults and teens alike who are looking to build their credit. Capital One reviews your payment history and card use after six months to increase your credit limit automatically. Be aware that the card has a APR and does not offer any kind of rewards. But it does have several benefits, including no foreign transaction fees and best prices on thousands of flights, hotels and rental cars when you book through the Capital One Travel portal.
The card offers $0 fraud liability and an easy-to-use app which lets you lock and unlock cards, track spending and check your Vantage credit score right in the app.
The VantageScore calculates your credit score differently than FICO and skews slightly lower. For instance, a “Fair” credit score of 601 to 660 for Vantage would equal a “Good” score of 670 to 739 for FICO, based on this GOBankingRates.com chart.
Best for 0% Intro APR:
If you’d like your teen to get used to managing credit without the risk of interest charges if they overextend themselves in the first year, a card with a 0% introductory APR is the best choice. Fortunately, Discover It is available to people with a fair credit score and beginning to build their credit. You’ll enjoy a 0% intro APR for 15 months and, after that, APR.
Best of all, earn 5% cash back at select places each quarter, and 1% cash back on all other purchases automatically. At the end of the first year, you’ll also get a dollar-for-dollar match on all the cash back you’ve earned as an anniversary bonus.
If you want to show your teen just how lucrative a cash back card can be, without the high stakes of interest charges in the first 15 months, Discover It is a great card to consider.
Best for Cash Back: Capital One QuicksilverOne Cash Rewards Credit Card
Helping your teen build credit is even sweeter when they can earn rewards for every purchase.
The QuicksilverOne Cash Rewards credit card offers a straightforward 1.5% cashback on every purchase, every day. Automatic credit line reviews make it easier for your teen to build their credit quickly and be considered for a higher credit line in as little as six months. There is also 0% fraud liability, giving you and your teen peace of mind if they happen to lose their card or it gets stolen. The Capital One app also makes it easy to lock or unlock a card as needed. You can track your teen’s spending through the app and if it starts to get out of hand, lock the card with one click!
The drawbacks? A $39 annual fee and hefty purchase rate if you don’t pay the balance in full each month could lead you to consider other options.
Best for Restaurant Rewards: Capital One SavorOne
If you have excellent credit and would prefer to earn rewards for all those pizzas your teen orders, consider the Capital One SavorOne Rewards. With no annual fee, the SavorOne card offers 3% cash back in many of the areas your teen might spend the most money: dining, entertainment, popular streaming services and grocery stores. You could even teach them to grab the snacks they want at grocery stores instead of convenience stores to save money!
Plus, earn a one-time cash bonus of $200 when you spend $500 within the first three months of opening your account. Enjoy a 0% intro APR for 15 months and APR after that, and a annual fee.
Best for Students: Discover It® Student Cash Back
The Discover It Student Cash Back credit card is available to teens 18 and up with no credit history, as long as they meet other application criteria. The card offers 5% cash back at different places each quarter, including Amazon, grocery stores, restaurants, gas stations and even purchases made using PayPal. All other purchases earn 1% automatically.
Discover also matches your cash back with an equal bonus at the end of your first year as a cardholder. The rewards are flexible and can redeemed for cash, gift cards, applied as a statement credit or used for purchases on Amazon or PayPal. There is no annual fee for the card. The card has a 0% intro APR for six months from the date the account is opened and then variable APR of .
Best for Travel: Capital One VentureOne Rewards for Good Credit
As long as you have a good credit score, you can qualify for the Capital One VentureOne card and begin earning unlimited travel rewards. Get five miles per dollar when you book hotels and rental cars through Capital One Travel, and 1.25 miles for every other dollar spent. There are no foreign transaction fees, making this card perfect for the adventurous college student.
The card also offers a price match guarantee on travel, so if you find a lower hotel rate or airfare within 24 hours after booking, Capital One will refund the difference on your card. There is no annual fee for VentureOne. The only downside to this card is the APR, which is higher than many of the cards on this list. But as long as you don’t carry a balance, this shouldn’t be an issue.
Best Secured Card: Secured Sable ONE Credit Card
Secured credit cards can be great for teens who are just starting to build their credit. The Sable One is a secured credit card and has a 98% approval rate. There’s no credit check required to apply, but you must open a Sable bank account. Set your credit limit based on the money you have in your account.
Use your Sable ONE secured Mastercard and earn unlimited 2% cash back rewards on many brands you buy. There’s a $0 annual fee. If you make your payments on time each month and meet other tangible milestones, such as making 15 purchases in a month, you could graduate to an unsecured Sable ONE card in as little as four months. Some milestones are related to income, so you’ll want to set up direct deposit to your Sable account.
Best for Building Credit: AvantCard
The AvantCard is a lesser-known credit card which made the list for GOBankingRates’ Best Credit Cards to Rebuild Your Credit. It’s good for anyone, even teens, who are looking to build credit. The card doesn’t offer anything in the way of rewards, but it’s a straightforward card that allows you to gradually increase your credit limit through on-time payments. It is not a secured card, which means you don’t have to keep money in the bank to cover your purchases.
There are no over-the-limit fees, and no annual fee for qualified applicants. However, be aware the annual fee can range anywhere between $0 to $59. Your credit limit can range from $300 to $2,000. The variable APR is 27.99% – 29.99%. This is one of the highest in the industry so you’ll definitely want to pay your balance in full each month.
Best To Add Your Teen as an Authorized User:
Some parents with good to excellent credit may want to add their teen to their card as an authorized user to help them begin building credit with less risk. The is a great card to share with family because of the generous rewards program, plus tons of perks and benefits. Earn 60,000 bonus points after spending $4,000 within the first three months of opening the account. When you redeem those points through the Chase Ultimate Rewards portal for travel, they are worth up to $750.
You also earn $50 in statement credits good for hotel stays on your anniversary with the card each year. Garner 5x points on travel purchased through the Chase portal, 2x points on all other travel and 3x points on dining, eligible delivery services, online grocery purchases and select streaming services. Be aware that the card has a APR and an annual fee of .
Best for Budgeting: Upgrade Cash Rewards Visa
The Upgrade Cash Rewards Visa is a little different from the other credit cards on this list. The minimum monthly payments are based on set payoff dates for each purchase, and divided into equal monthly payments, so you can pay down your balance faster. With other credit cards, as your balance drops, your minimum monthly payment drops, which means it can take longer to pay off your debt.
When you open a Rewards Checking account to go with your Upgrade card, and make three debit card transactions, you’ll earn a bonus of $200. The Upgrade Cash Rewards credit card also gives you 1.5% cash back rewards when you make your payments.
You can also earn an extra 10% cash back from participating merchants when you shop online through the Dosh cash back app: Upgrade Shopping. Credit lines can range from $500 up to $50,000 depending on your credit. There is no annual fee for Upgrade Cash Rewards Visa, making it a great choice and something of an unsung hero in the world of rewards credit cards.
More From GOBankingRates
Check Out Readers' Favorite Small Businesses in Our 2022 Small Business Spotlight
This Credit Score Mistake Could Be Costing Millions Of Americans
4 Ways Women Can Prepare Their Finances for Unexpected Life-Changing Events
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Oct. 14, 2022.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
The information related to Chase Sapphire Preferred was collected by GOBankingRates and has not been reviewed or provided by the issuer of this product/card. Product details may vary. Please see issuer website for current information. GOBankingRates does not receive commission for this product.
This article originally appeared on GOBankingRates.com: Is It Time To Get Your Teen a Credit Card? Here Are the Best Ones
