If you dream to have your own credit card but you're under 18, your dream remains as such in most cases. But if you have a parent with good FICO score and a major bank card, there is a great opportunity to obtain that small piece of plastic and benefit from its conveniences and perks. So, how do you clinch the deal?
If your parent is planning to apply for credit card online, ask him/her to tick off the field with additional cardholder. That's it. The issuer does not require any of your personal data except the age of course. Some companies will even approve you for the additional card if you are much under 18! That is how you can get your first credit easy and fast.
If you're going to try it out, make sure you learn about all the benefits and pitfalls of an easy to get additional credit card.
As long as you already know about the benefits - otherwise why would you attempt to get it? - we will drop the details and only highlight the basic things:
Minimum age: some issuers have the minimum age requirement for secondary card user and some - don't.
Eligibility requirements: as additional cardholder you are not subject to credit history and income check. This makes the primary cardholder automatically responsible for all payments and cash withdrawals made with the plastic.
Credit bureau reporting: this is one of the major reasons why a teenager should get an additional credit card. Apart from easy credit, the youngster can start their personal credit report as most companies report the primary user's payment activity on the secondary user's report. It allows you to build up positive payment history which makes you eligible for some of the best credit card applications in the future. This is of most benefit for freshmen who can use their payment records to receive low APR cards with rewards.
Debt collection: as a secondary (authorized) user you are not liable for any debt made by the primary user.
There are just a few pitfalls associated with using additional credit card but they may have negative effects on your financial life as adult.
If the primary card user defaults on his/her account, it'll be reflected in your report, in your name. Guess about the consequences - damaged score, bad risk and denials in credit for major purchases.
Some companies gave up the practice of credit reporting so think twice whether you really need a line of credit that does not build your score. If you are just after an easy payment tool or additional source of income, ask your parent to get you a pre-paid card. It works just like a debt one but does not require you to open a bank account. Your parent can buy a prepaid card for you and load funds on it when needed.
Easy credit is a risky temptation, but if you get its principle - you'll work it out.