If you're tired of paying for downloads, games, and in-app purchases that your child may “accidentally" charge to your credit or debit card, you may find yourself wondering if your child can get a kids credit card. After all, our society is becoming increasingly cashless, as most of us make purchases with cards and smartphones more frequently than with cash or checks.
However, unless the child in question is over the age of 18, they cannot legally get a child credit card in their own name. Because a person under the age of 18 is not considered a legal adult, credit card issuers are not allowed to issue them a credit card. But that doesn't mean your child can't use a credit card to make payments. As a parent, you have a few options for providing your kids access to card payments.
Make the Child an Authorized User on Your Credit Card
If you want to give your child the authority to make charges on one of your own credit cards, you can contact the issuing bank and ask them to add an authorized user. Some credit cards may allow you to add an authorized user through your online portal.
If your child is an authorized user on your card, they can make charges and the card will show up on their credit report. However, the child will not be legally responsible for the account.
To avoid winding up with a lot of charges you weren't expecting—and the responsibility for footing the bill—it's important to set boundaries for your child's use of the card.
Serve as a Cosigner for a Child Who is 18-21
If your child is over 18 but under 21, they can get a card in their own name, but they must have an adult co-signer, unless they earn significant income to qualify for the card on their own. You can cosign for your child, and you will both be legally responsible for any debt associated with the credit card account.
If you feel comfortable cosigning for your child to get a credit card in their own name, make sure the credit limit is relatively low. If the child maxes out the card and is unable to pay off the debt, you want to make sure it's an amount you're willing to cover.
Provide Your Child with a Prepaid Kids Debit Card
For children under the age of 18, a prepaid debit card designed specifically for kids, like GoHenry (much different than what a traditional bank offers), is a safer, smarter option than a credit card. These cards offer unique safety features that allow you to help teach your kids financial literacy without putting your (or their) finances or credit at risk.
For instance, if the card is lost, you can instantly block it with the touch of a button—and when it's found, you can instantly unblock it. Also, there's no chance of overspending, because the card will only allow purchases that are covered by the funds that have been added to it. And with a parent account linked to each of your children's accounts, you can easily add allowance and keep track of what your child is spending, saving, and giving.
A prepaid debit card for kids can be a valuable tool in your child's financial education, allowing them to join the cashless economy without the risks of using a credit card.