We’ll go over everything you need to know about getting a credit card for your 17-year-old in this article. We’ll also go over some of the major advantages, disadvantages, and benefits of getting a credit card at a young age.
If you begin building credit when you are a teenager, you will have a great chance of establishing excellent credit.
Getting a credit card for your 17-year-old child ensures that you can begin mentoring them on how to improve their credit score at a young age.
Continue reading to learn more about the best credit card for 17-year-olds.
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CITI DIAMOND PREFERRED
This is one of the best credit cards for 17-year-old kids available, and it will ensure that young adults have the opportunity to build a strong credit score.
Your teen is unlikely (hopefully) to require a balance transfer to eliminate debt.
The Citi Diamond Preferred Card, on the other hand, is a great way to pay off some of your own debt while also allowing your teen to start building good credit habits.
The card also has an introductory APR on purchases, but you shouldn’t use it to make purchases if you’ve done a balance transfer, so plan ahead before you apply.
THE BENEFITS OF A CITI DIAMOND CREDIT CARD FOR A 17-YEAR-OLD
APR introduction On balance transfers, the Citi Diamond Preferred Card offers a 0% intro APR for 21 months before reverting to a variable APR of 13.74 percent to 23.74 percent. This is one of the market’s longest introduction periods.
There’s no annual fee. There is no annual fee for using this card. A balance transfer is limited to four months.
This card has a 4 month time limit for transferring existing debts, which is slightly longer than the average. Many cards on the market only give you 30 to 60 days to transfer funds.
THE DOWNSIDE TO A 17-YEAR-OLD GETTING A CITI DIAMOND CREDIT CARD
There are no incentives. Because this card is solely focused on introductory APR offers, it may not be the best long-term credit card option for your teen in terms of building value.
APR penalty is steep. If you miss a payment, you’ll be charged a penalty APR of 29.99 percent variable. Failure to make a payment may result in the loss of the card’s introductory APR.
If you pay your balance in full at the end of each month, this isn’t a problem, so consider setting up automatic payments.
CREDIT CARD OPTIONS FOR A 17-YEAR-OLD
Your teen may benefit from having a credit card, but they may not be ready for one just yet. Debit cards for teens, on the other hand, can teach your teen good financial habits without jeopardising their credit.
You can then graduate your child to a full-fledged credit card once you’re sure they can manage their money.
Step uses secured loans to help your child establish a good credit history. The
To help your child build credit, this account combines aspects of a debit card and a credit card. However, you won’t have to worry about overdraft fees because Step won’t let your child spend more money than they have.
Establish credit. Step allows your child to build a credit history before they reach the age where they can apply for a credit card.
Automated transactions As a joint owner of the account, you can set up recurring transfers to automatically fund the card.
No monthly fees. The Step card has no monthly or annual fees, and there is no minimum balance requirement to keep the account active.
Cash and checks cannot be deposited. This account does not accept cash or checks, but you can fund it with direct deposits, bank-to-bank transfers, and apps like Venmo.
Withdrawals from ATMs. If your account balance is insufficient, ATM withdrawals work like cash advances, and you may be charged interest or finance charges.
YOUNG ADULTS GETTING A CREDIT CARD
Before we get into the benefits of getting a credit card for a 17-year-old, keep in mind that you must be 18 years old to apply for a credit card on your own.
You must be at least 18 years old to obtain a credit card. You can, however, be an authorised user on someone else’s account if you’re under the age of 18.
For a minor, this is a good option because it helps them establish a credit score and history. When a minor reaches the age of majority, having a good credit history can help them qualify for better credit card options, such as rewards or travel cards.
Here’s an example of a typical credit card journey a teen might take.
This is an ideal age to introduce your tween to a kid-friendly debit or prepaid card. These cards are a relatively risk-free way of teaching your child about responsible spending.
They don’t pay interest and are reloaded with money from a bank account or another source. These cards don’t build credit, so use them only until you’re sure your child understands the basics of card usage.
Consider allowing your teen to graduate to a credit card after they’ve demonstrated their ability to responsibly use a debit or prepaid card.
You can track their spending after you add them as authorised users. You can also teach them about credit management before they get their own card.
When your child turns 18, they can legally apply for a credit card from certain companies. The training wheels can be removed at this point, and your child can open an account in their own name.
While you could encourage your child to apply for high-rewards or travel cards right away, a student credit card is one of the more secure options.
These cards usually come with some built-in forgiveness for missed payments and few fees, making them ideal for a young person learning to use a credit card.
WHY SHOULD YOUR TEEN GET A CREDIT CARD?
You may believe that your adolescent is too young to use a credit card. However, there are two major reasons why having one might be a good idea for them.
1. It can teach your teen how to responsibly use a credit card in the future.
You have control over your teen’s account and can see how they use their card after adding them as an authorised user.
You can more effectively teach them sound financial habits if you have insight into their spending. It’s better for them to learn from you now rather than later when they’re on their own.
2. It can assist your teen in establishing credit early on.
When it comes to getting a credit card, most people start with a clean slate. This usually means they’re restricted to student and secured cards, both of which have limited functionality.
You can assist your teen in establishing a strong credit history before they turn 18. Simply add them as an authorised user to your account and make sure they pay on time.
When they reach the age of 18, their credit may be strong enough to significantly expand their card options.
3. It is practical for both parents and children.
You might forget to give your child money for school meals, transportation, or supplies.
Obtaining a credit card for your child can help you avoid unpleasant situations and cash theft. You can also set spending limits on some cards to ensure that your child does not go over their budget.
4. You can increase your rewards.
Why not get something in exchange for assisting your teen in establishing credit? On purchases made by authorised users, most credit cards offer rewards.
Consider a family-friendly credit card, as adding your teen as an authorised user on one of these cards could help you earn more rewards on everyday purchases.
MISTAKES TO TEACH YOUR KIDS ABOUT CREDIT CARDS
Teach your teen how to avoid credit card problems while they are still under your care. They should be aware of a few common pitfalls.
1. Making only the bare minimum payment.
On their credit card, a cardholder is only allowed to make the minimum monthly payment. However, after paying late, this is arguably the worst thing you can do. Paying the bare minimum allows interest to accumulate and debt to grow.
Here’s what you should do: Demonstrate to your teen why paying off their balance in full each month is a good idea. Show them how credit card interest builds up and how to avoid it.
Teach your teen the importance of not exceeding their credit limit. Carrying a large balance puts you at risk of incurring overlimit fees, as well as accumulating large amounts of debt. Many experts advise that spending should not exceed 30% of one’s credit limit.
Here’s what you should do: Encourage your teen to spend less money than they earn from an allowance or a job.
Teach them about the impact of their credit utilisation ratio on their credit score. Also, explain why keeping their ratio under 30% is a good idea.
3. Making late payments.
This is a surefire way to lower your credit score. You can protect your teen by paying your card bill as usual because they are an authorised user on your account.
However, if your teen shows signs of paying late in the future, it’s best to address the issue right away.
Here’s what you should do: Set up automatic payments on your card account so you don’t have to worry about missing a payment on your teen’s card.
Meanwhile, set a monthly deadline for your teen to repay you. Encourage them to set reminders on their phones or calendars so they don’t forget.
4. Theft of a credit card.
Teach your children to protect their credit card information. Although credit card fraud can occur even when all precautions are taken, teaching your child how to protect their credit cards is a good place to start.
Here’s what you should do: Explain to your children how credit card information can be stolen and misused. Also, teach them how to recognise which websites are safe to use online and which are not.
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