the child’s name. The child can use this card as a card of his own but the only difference is that the primary holder (parent) is responsible for the entire balance.
4. Co-signing a loan or credit card:
If you think that it is not a good idea to make your teen an authorized user on your card, you can co-sign his or her first credit card. This will pack more punch than authorized user. Ownership as your child will be the primary borrower and it will do more to help your child build a solid credit score. But remember to educate your child how to use the card responsibly. You should be comfortable with this possibility before moving forward.
5. Obtain a secured credit card:
If you feel your child is not particularly responsible with money, the best option is to help your child apply for a secured card when he/she is 18 years old. These cards are normally fully secured and require cardholders to deposit a few hundred dollars which is usually equal to the credit limit. You can make the initial deposit together. The advantage of such a card is that your economic risk is just the amount of deposit and some credit cards come with some additional attractive features like a reasonable annual fee of about which allow kids to monitor their credit scores and use a credit simulator to see what the consequences will be if they missed a payment or continue to pay on time over an extended period of time.
If your child uses the credit card regularly for small purchases and pays off the balances in time he/she can qualify for an unsecured credit card after six months.
Building up a solid credit score will help your child qualify for loans, auto insurance and even affect whether he/she can get a job. Therefore, you should monitor your teen’s activities as she/he gets into the credit habit and allow more flexibility as responsibility is demonstrated.
Obtaining a reasonable of credit at an early age and using it responsibly will definitely pay off in the long run. There are tricks and techniques to build a good credit score a young age but in the end, it boils down to being responsible.
About the Author:
My name is Angela Welsh a Financial Adviser at Zinu Credit Repair. It is a legitimate credit repair agency in US. That offers a free credit repair consultation, which includes a complete review of your FREE credit report summary and score. If you are looking for the best credit repair company in your area. Please contact me.