How Do I Get a Credit Card if I’m Under 21?

It used to be easier to get credit as a young adult.  But, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), effective February 22, 2010, changed that. Now you have to be 21 years old to get a credit card, unless you have a job or a co-signer over age 21.  The CARD Act banned freebies at college campus card signup tables and prohibited pre-approved credit card offers. Students now have to apply for the credit cards pursuant to the new rules.

There are, however, some options to get credit cards.  And, these don’t include having your friends co-sign for you or using your student loans as “income” on your credit applications.

Getting a Co-signer

While it’s not the best strategy, you could consider getting a co-signer for a new credit card.  Co-signing means that if the responsible party does not pay, the co-signer is equally liable for the debt and would have to step in.  The credit card issuer reports the credit card information to the credit reporting agencies. And, since both “signers” are listed as being responsible for the payment, the card is reported on both credit reports.

If the parent has a solid payment history, this will help the young adult’s credit reports and credit scores. But, if either the parent or young adult does not pay on time, both credit histories will suffer.   When you apply for another credit card or a loan down the road (now with less than perfect credit), you won’t get the best interest rates or terms.  This will cost you additional money to finance the purchase.

Becoming an Authorized User

This is clearly a better strategy.  You can become an authorized user on one of your parent’s existing credit cards. You would have use of the card, but you aren’t responsible for payments.  The account is reported to your credit reports as well as the credit reports belonging to your parents.  Keep in mind, however, if your parents don’t pay the account responsibly it will damage your credit reports and scores.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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