Frankly speaking, it’s tougher for teens to get a credit card than it was about 10 years ago because the Credit Card Accountability Responsibility and Disclosure Act of 2009 set rules on the extension of credit to people younger than 21, although credit card companies don’t always have age limits on when teenagers can get credit cards on their own, it’s typical for most people to wait until age 18.
Cents Ability advocates for teens as young as 16 to have access to credit cards but coupled with education and oversight from parents, In the year 2016 survey of 16- to 18-year-olds in New York City, Cents Ability found that 54 percent of them had access to credit cards, but 63 percent did not have conversations with their parents about money management as it relates to credit cards.
And also, according to the U.S news survey, they found that 40 percent of teens surveyed were not given proper preparation before obtaining a credit card.
And urge every parent to also show their children what their credit card statement looks like, how large and small purchases can add up into a huge bill and why it’s important to pay off the balance every month, or at least meet the minimum payment.
More so, they can review credit card repayment calculators with teens to show much longer it would take to pay off a debt by making only minimum monthly payments.
Applying For Credit Card In Australia?
To apply for a credit card is similar to taking a loan, and can be a test of how financially responsible you are, Credit card issuers are bound by Australian laws to verify how much you can feasibly repay, and not give you a credit card limit exceeding that amount, in Australia, you legally need to be 18 years old to apply for financial products like a credit card or a personal loan. when applying for a credit card age isn’t only the only qualifying criterion.
Can I Get A Credit Card At 16?
Before one can be eligible to apply for a credit card application, he/she will require proof of identification, including age, and you’ll also need to prove that you’re an Australian citizen or permanent resident. Also, you’ll need to submit proof that you’re employed and earn an income more than the minimum level specified by the credit card issuer.
Also, credit card issuers will also look at your credit history to check if you’ve had any issues repaying debt in the past. And before you get to 18, you may not yet have a full-time job, and may not have developed a credit history either. Because of all these reasons, 18 years is the minimum age for credit card applications.
Another alternative to applying for your credit card is requesting an additional card linked to your parent’s credit card account, although this won’t help you build your credit history, it can give you the experience of using a credit card responsibly.
Parents should be able to monitor your spending and can advise you on your spending patterns. And you may also want to consider a debit card with your bank account a prepaid card or even buy now, pay later services, like After pay.
What a College Student Should Look for in a Credit Card
There are different basis on which credit cards is been given, the student’s credit card sometimes has low monthly credit lines, that is to say, you may only be able to carry a small credit balance, say $500 or so. This is because these cards are designed for people who are just getting started on their credit journey.
Regardless of the limited amount you are allowed to spend, student cards are real credit cards. And your activity is reported to the credit agencies and you begin to build your credit history.
Luckily, there are no-annual-fee college credit cards, so you shouldn’t have a problem finding one that fits these criteria, you’ll also want to consider a reward or cashback program. But if you already spend money, why not select a card that offers rewards on purchases?
If you’re planning to travel abroad, a miles reward program might be a good option, as would a card with no foreign transaction fees.
Note, look for some additional perks that not every credit card issuer offers. Take, for instance, Discover offers a $20 statement credit each school year your GPA is 3.0 or higher for up to the five years after you get one of the student cards.
How To Avoid Unnecessary Credit Card Rejections
Different credit cards require different credit scores for approval, for instance, the “premium rewards” credit cards often require a higher credit score and a longer credit history due to their underwriting criteria.
To apply for a premium card or any card designed for high earners with excellent credit scores, if you have little or no credit history, may set you up for rejection and disappointment Instead, you may want to consider applying for a specifically designated student credit card. Never worry — some credit cards for college students have great rewards programs, too.
In conjunction, incorrect personal information, or lack of some vital information for the application, can also trigger the credit card company to decline your application, when you do apply, make sure to have all of your information ready and make sure everything is correct. Some of the information you might need includes:
- Social Security number
- Legal name
- Current address
- Time at current address
- Proof of income
How Old Do You Have To Be To Get A Credit Card In The US?
The minimum age to open a credit card as the primary account holder is 18 years. However, due to the rules and regulations from the Credit CARD Act of 2009, applicants 18 to 20 might encounter stricter verification requirements, including showing proof that they can independently repay what they borrow.
And must also show that you have an income — such as a salary, regular paychecks, commission checks, or income from investments — that protects young consumers from taking on more debt than they can handle.
Immediately you turn 21, you won’t be bound by these rules, though card issuers still review your income and it remains important to answer all application questions honestly.
Here’s how Discover identifies what it counts as “total gross income,” according to the description on the Discover it® chrome application:
“Income means wages, salary or tips, you currently earn or can reasonably expect to earn, other examples include bonus pay, commissions, and income from rental property, interest, dividends and retirement benefits paid.
And you do not have to include alimony, child support, or separate maintenance income unless you want it considered as a basis for repayment.
Age of 21 or older, you may include another person’s income that is available to you. Under 21 of age, Maybe consider the amount of another person’s income that is regularly deposited into your account.”
3 Things To Consider Before Applying For A Credit Card
- Evaluate whether you need a credit card
- learn how to shop around for the right credit card
- Plan it out
Evaluate whether you need a credit card
The first thing to do while getting a credit card as a young person is to think about whether you need your credit card – and be honest to yourself, also ask yourself what do you need the credit card for? Do you have a job and a strategy for paying back any debt you might accumulate? Do you know how to save for emergencies? These are important things to consider when you’re deciding whether to get a credit card.
In case you aren’t ready to get a credit card yet, there are some alternatives. But if you want to start building a credit history, you could become an authorized user on a parent or guardian’s credit card account.
Learn how to shop around for the right credit card
If you’re in college or university and looking to get a credit card, some financial institutions offer credit cards specifically geared toward those consumers who are just starting to build a credit history.
Based on law, no one can get a credit card on their own in Canada until they are 18 years old or the age of majority in their province or territory. Immediately you reach 18years, you might want to consider a secured or student credit card.
Plan it out
Again, always remember, that before you apply for a credit card, determine the monthly payments you can afford. And also, what’s your monthly income? If you’re in school, do you need to budget for books and food?
Remember that you need to adjust your spending to match your situation, for example, if you’re paying your credit card bills with income from a job, and you need to work fewer hours during exam time, you will have less money to spend.
The biggest advantage of a credit card is its easy access to credit. Credit cards function on a deferred payment basis, which means you get to use your card now and pay for your purchases later, so it is of paramount interest that you get your credit card if you have come of age.