Whether you love them or hate them, credit cards can make or break your financial future. Getting your hand on your first credit is itself a milestone but if you are not careful enough, it can soon turn into a mess.
Additionally, if you have just turned 18, you would definitely want to prove your mettle and achieve a sense of financial responsibility. But, without understanding the ins and outs of the credit system, you may just end up ruining the magic number – credit score.
But, then what is the right age to get hold of your first credit card? If you are also looking for these answers, we are here to break it down all for you in this article. Let’s dive right in.
What’s the Best Age to Get a Credit Card?
A credit card is a double-edged sword and your creditworthiness may take a huge hit if you don’t use it responsibly. There is no ‘ best age’ but only the right age to use a credit card, responsibly.
When you use a credit card, you should pay off the full credit or at least the balance in full every month. But, if you ignore doing that, you can have a domino effect on your financial future.
Ideally, you should be able to make enough, to pay off your monthly bills along with your credit card expenses. And saving up in the early days and maintaining a strike-free credit history will only help you boost your credit score.
Will You Get a Credit Card If You’re Under 21?
Although the age 18 is identified as the age of adulthood, you are allowed to officially hold a credit card only at 21. This was not the case earlier, but the 2009 Credit CARD Act bought this change.
This federal law mandates all applicants under the age of 21 to get a credit card cosigner unless they have an adequate full-time income source. It is unlikely for most students to make enough money while studying, and so they need someone with a good credit score to cosign for them.
But, there’s a catch. If you miss your credit payments, then it directly damages your co-signer’s credit score, and oftentimes 75% of cosigners end up footing some of their credit bills. So you have to be extra careful to not ruin the relationship.
What Are Your Other Options?
If you are unable to find a cosigner, a secured credit card is your best bet. This is rolled out for people who don’t have any form of credit history and it is a fair way for the bank to limit its risk.
A secured credit card is backed by a cash deposit that is equal to its limit, and it also helps you to build your credit score from scratch. Plus, after you have built a good credit score, you can make a transition to an unsecured card for adding more value to your credit score and eventually get your refund.
Or else, you can also ask for a retail card from your favorite retail shop as they may leverage a card with minimal credit requirements. But, be very careful to pay back on time to avoid falling into the debt trap.
Did you know? Student Credit cards are also an option if you are in college. These are tailor-made for college students who have no credit history whatsoever.
The Bottom Line
Starting early not only helps you build a credible credit score but also helps you reap benefits like getting access to the best credit cards, best interest rates, and much more that can come handy in the future.
However, if you somehow feel that you aren’t ready for one, hold off and save yourself from all the trouble until you attain financial maturity to use it wisely.
