It’s a common question on both parents’ and teenagers’ minds: how young is too young to get a credit card? Legally, no one can open a credit card unless they’re at least 18 years old. In the past, it was possible to add an under-18 as an additional cardholder in certain cases, but that’s no longer an option.
If your teenager wants to enjoy the flexibility of a card, there are several options available, including prepaid cards or debit cards. Here’s how to teach your teen solid financial habits to get them off to a good start.
Debit and prepaid cards first — then credit cards
Although your teenager is unable to have a credit card, they could benefit from a prepaid card or debit card which could help them learn about budgeting and responsible spending.
The benefit of allowing your child to use a prepaid or debit card instead of cash is better protection if they are a victim of crime. For example, if your child’s prepaid or debit card is lost or stolen, you could lock or cancel the card to protect their money.
Teach your teenager good financial habits as early as possible. When you’re confident your child has the skills to manage their money, they’ll be ready to graduate to a credit card when they turn 18, should they wish to have one and if they’re accepted.
Prepaid cards
Like a credit card, a prepaid card can give your teen the freedom and flexibility to spend online and in stores.
You and they can also see the spending in real time via app alerts or text messages so it’s easy for parents and their children alike to monitor and control the spending in the UK and abroad. Parents can block their teenagers from spending in blacklisted places, such as pubs, gambling sites, off-licences or casinos.
While a few prepaid cards are free, many come with a monthly fee or an upfront one-off fee. Your child could also be charged an ATM fee for withdrawing cash from the card. Learn more and comapre prepaid cards for kids here.
Debit cards
Debit cards are available to children aged 11-17 from most UK banks and building societies. Some accounts have the option of a cash card, which means money can only be withdrawn via a cashpoint. If your child has a Visa, Mastercard or Maestro debit card linked to their bank or building society account, they can use it in shops and online.
Parents will find they have less control as most bank or building society accounts are opened directly by the child or teenager in their own name. Parents won’t be able to monitor their children’s spending on a debit card meaning it could be a better option for older children.
There’s no danger of your child becoming overdrawn as no bank or building society offers an overdraft facility to under-18s. Accounts for children or teenagers are exempt from fees, although you may see 0% or incredibly low interest rates.
Once your teenager turns 18
When your child become a legal adult, they could have a number of credit card options available to them. However, as they are starting out with a zero or low credit score, their borrowing options will be limited.
It’s a great idea for them to get visibility of their credit record (which doesn’t need to involve any fee), so they can get a sense of how banks see them.
Add your over-18 child as an additional cardholder to your credit card account.
Open a student credit card if they’re in full-time education. As a student, they could also be eligible for student loans and overdrafts.
If they go into full-time employment, they may be able to open a credit card. However, their lack of credit history means they could be offered a card with a high interest rate or are not eligible for one at all.
While you still have them under your wing, teach your teenager how to avoid trouble with a credit card. Here are a few common pitfalls they should know about.
Making only the minimum payment. A cardholder is allowed to make only the minimum monthly payment on their credit card. However, that’s arguably the worst thing to do behind paying late. Paying the minimum allows interest to snowball and debt to accumulate. Here’s what to do: Show your teenager why it’s smart to pay off their balance in full each month. Teach them how credit card interest accumulates, and how it can be avoided.
Overspending. Teach your teenager that they should avoid spending close to their credit limit. Carrying a high balance puts one in danger of incurring overlimit fees, on top of accumulating high debt. Many experts recommend keeping spending under 30% of one’s credit limit. Here’s what to do: Encourage your teen to spend less than they receive from their allowance or job. Teach them how different factors could affect their credit score and why it’s important to have a healthy credit report for future large purchases, such as a mortgage or personal loan.
Paying late. This is a sure path to decreasing a credit score. If your teenager is an authorised cardholder on your account, you can protect them by paying your card bill as usual. But if you see signs your teen may pay late in the future, it’s best to nip the problem in the bud. Here’s what to do: Set up automatic payments on your card account so that you never miss a payment on your teen’s card account. Meanwhile, ask your teen to repay you by a certain date each month. Encourage them to set up phone or calendar reminders so they don’t forget.
No, you have to be 18 years or older to apply for a credit card in the UK.
If you’re under th age of 18 and looking for some financial independence, there’s plenty of current accounts to compare and open. Some accounts will reward you with a welcome bonus upon opening.
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Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio
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