Parents looking to give their kids a financial headstart in life might opt to open a savings account or a 529 college savings plan to help fund their education. But one of the most often overlooked ways to give your kids a leg up is by helping them establish a good credit score.
Building credit is important, but as a young person, it can be difficult to do – especially at an early age. But one of the easiest ways to start the process is by adding them as an authorized user to one of your own credit card accounts.
If you're not familiar with credit card authorized users, adding someone, be it a family member, partner, or even a friend, to your existing credit card account means they'll get their own physical card, which they can use to make purchases on your behalf. Though, there's no requirement that you give them the card and actually let them make purchases on your behalf.
Even if you have no plans to let your kids actually use the credit card, it's an easy way to help them establish good credit – as long as your account is in good standing. If it's not, those derogatory marks on your credit report will also impact the authorized user.
Each bank handles this process a bit differently, so read on for everything you need to know about adding your kids as authorized users to your credit card account including age requirements, cost, and more.
What's the Minimum Age to be an Authorized User: Bank by Bank
Every bank has its own minimum age requirements for authorized users, so it's important to understand the rules laid out for all of the banks, especially the ones that issue the credit cards you already hold or you might be considering.
Here's what you need to know, bank by bank.
| Card Issuing Bank | Minimum Age Requirement | What information does the bank collect? |
|---|---|---|
| American Express | 13 years old | Full name, date of birth and Social Security number |
| Bank of America | None | Full name, date of birth and Social Security number |
| Citi Bank | None | Full name and date of birth |
| Capital One | None | Full name, date of birth and Social Security number |
| Chase | None | Full name and date of birth |
| Discover | 15 years old | Full name, date of birth and Social Security number |
| Wells Fargo | None | Full name and date of birth |
| U.S. Bank | 16 years old | Full name, date of birth and Social Security number |
As you can see, some banks like Bank of America, Citi, Capital One, Chase, and Wells Fargo don't have any age requirements for credit card authorized users, while others like American Express, Discover, and U.S. Bank do.
The information you'll be provided to require varies from bank to bank as well. At a minimum, you'll need to provide a full name and birth date. Some banks will also need the authorized user's social security number.
How to Add Your Child as a Credit Card Authorized User
To add your child (or anybody for that matter) as an authorized user to your credit card account, most banks will give you the option to do so online. That said, you can also call the number on the back of your card and the customer service representative should be able to help you add a user as well.
For example, if you have an online account with Chase Bank, you can log in and select the card you want to add an authorized user to. From there, you can navigate to “account services” and then “add an authorized user.”
Simply fill out the required information and your authorized user should receive their own card in the mail within a few weeks.
If you later decide to remove your child as an authorized user, the process should be much the same. You can manage that in your online account, or call the number on the back of your card and a customer service representative should be able to complete the process for you.
Is There a Cost to Add an Authorized User?
Whether or not there's an extra cost associated with adding an authorized user depends on the credit card. If you have a credit card that doesn't charge an annual fee, there shouldn't be a cost to add an authorized user, either.
However, if your card does have an annual fee, that doesn't mean there will be a fee to add additional users. For example, the *chase sapphire preferred* and the *capital one venture* both charge an annual fee of $95, but there's no additional fee to add an authorized user to either card.
The same is true for the *capital one venture x* – Capital One's top-tier travel card which charges an annual fee of $395. And, Capital One also allows you to add up to four additional authorized users to the Venture X card at no additional cost.
Then there are premium travel cards like the *chase sapphire reserve* and *the amex platinum card*. The Sapphire Reserve has an annual fee of $550, and if you want to add an authorized user, that will be another $75 each year.
With the Amex Platinum Card, you'll pay an annual fee of $695 (see rates & fees). To add an authorized user to the Platinum Card, you'll pay $175 for up to three additional users. So whether you add one user or up to three, you'll pay a flat $175 fee.
If your card charges a fee to add authorized users, it's likely that your users will also get some of their own benefits like lounge access, a credit for TSA PreCheck or Global Entry, and more.
But if your primary goal is to add your child as an authorized user to help them start building credit, you'll likely want to find a card that doesn't charge an additional fee for authorized users.
How Does a Credit Card Authorized User Build Credit?
Authorized users will build credit based on how the primary credit card account is managed. If the card account that an authorized user is attached to is in good standing, the authorized user will benefit. Conversely, if the account is not in good standing, the authorized user's credit score will take a hit as well.
That means paying your bills on time and in full and keeping your credit utilization ratio below 30% will help your authorized user build a good credit score. But if your account has any derogatory marks, remember that not only your score will suffer, but the scores of your authorized users will also.
Read More: How to Get Your Free Credit Report & Understand Your Credit Score
Bottom Line
Adding your children as authorized users to your credit card accounts can be a great way to help them establish a good credit score. As long as your account is in good standing with no derogatory marks, your authorized users will benefit just by being associated with the account.
Every credit card issuing bank handles this process a bit differently, and age restrictions vary from bank to bank. But if you have a card that allows you to add a child as an authorized user and it doesn't charge a fee to do so, it can be a great way to help them start building credit.
One card that kills two birds with one stone is the Barclay’s Upromise Mastercard. The minimum age for an authorized user is 13, and purchases feed into your child’s 529 account. In addition, there is no annual fee for the Upromise Mastercard, nor are there international fees. I have used it a lot to book tours and accommodations for an upcoming New Zealand trip (where American Express is not widely accepted). It’s a great way to earn towards college.
Back in early 2000s we added our 12 year old son to a Target branded Visa card so when we travelled overseas he had the means to buy stuff without needing foreign currency and obviously for any unforeseen emergency. This also stood him in good stead when applying for his own card. Plus he learnt
to put most all your expenses on a card to gain maximum perks be they miles, cash back or whatever and then pay off the balance every month so as not to incur any fees.