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I don't remember what card it was, but I do remember when I was in high school, my dad took out a credit card in my name, with him as the cosigner. I believe it was from his bank. He did not give it to me. He paid for various things with it to start my credit history.
Then when I went to college, he did give it to me, with a specific list of what I was allowed to buy - school books, or food / supplies from the student center. The bills were sent to him, not me, and we went over them every month on the phone.
After a year of this, I was allowed to bring my car to college, and expected to get my own job to pay for gas and any spending money I wanted, and I had to give my dad the money to pay off my part of the credit card each month. I was required to pay my amount in full every month for anything I had spent (he continued to pay for school books and food). One time I went over what I could pay, just once. My dad paid it, and turned the card off until I paid him back in full. And yelled at me for about a week.
By the time I graduated, I'd had 5 years of positive credit history, and 4 years of supervised credit practice. It's been 15 years since then, and I've never carried a balance on a credit card, ever. And my FICO score is in the 840's. I plan on doing the same or similar with my own kids.
Sounds like you had a good dad. It is easy to get in trouble with credit.
You just signed up at one of the vultures that paid colleges a few bucks to set up a booth in front of dorms. That's how I got my first credit card. I don't have the IQ of a Dodo bird though as many people do so it was never a problem. I had something like $5,000 in credit limit across multiple cards before I turned 19 and amazingly (sarcasm) it never was a problem. The stupidest things I did was buy some shares of Google with my student loan check and pay my tuition with a credit card one quarter. Paid maybe $50 of interest. Dumb but worked out well as even though I obviously couldn't get in at the IPO it's still close to a dime bagger. If it it completely flopped, it's not like the $1,500 in credit card debt would have haunted me. Regardless of how the stock performed I paid it off in a few months. I just might not have had anything to show for it
Not this one, we tried. This was a company that marketed to high school and college kids. They want them hooked...
In two years, he had a $10k limit at age 18. Yes, he had a job, but just try to keep current at minimum wage with $10k, and 22% interest.
Pretty easily, actually.
You basically have three groups of people.
1) Realizes a stove is hot abstractly.
2) Does not realize a stove is hot abstractly and must burn themselves, sometimes repeatedly if they're really slow, to learn it.
3) Isn't capable of realizing a stove is hot. Dave Ramsey crew.
If you're group 2, way easier to learn the stove is hot with a $500 limit at 18 when you have no real adult responsibilities. Foregoing that concert is much easier than learning how to live within your means when you need to put gas in the car to get to work, food on the table, rent, utilities, insurance.
Sounds like you had a good dad. It is easy to get in trouble with credit.
You have to know your kid.
At 18 my parents told me they were giving me $3,000/year in one lump sum at the beginning of the year (cost of books/tuition at the junior college) and off I went. I was still on their medical insurance and cell phone and car insurance (although I didn't have a car) and had a rent free room as long as I kept my grades up if I wanted it. They cosigned on my first apartment as I went straight to a four-year college and took out parent plus loans that I was responsible for paying off in the amounts I told them I needed. They also paid the ER co-pays when I got hit buy a car so it's not like I was totally independent but that's the only time I had to ask for monetary support. Some kids need a lot more helicoptering and others don't. My sister was more difficult in that she's financially irrational and stubbornly independent. If you tried to micro-manage her it wouldn't work.
I started off much earlier. You didn't ask mommy and daddy for $5 to go to the arcades. You had an allowance and chores. You didn't ask them for money for prom. You had a job and needed to learn to budget for those things.
I had roommates where the parents basically ran the household finances. The parents check for rent showed up in the mailbox a week before the rent was due. When we split the utilities a check for that showed up in the mailbox a few days later. The kid had a credit card they put any day to day expenses on that and then you got to hear the arguments every month when the credit card bill showed up. If they wanted to go on a snowboarding trip, they called up mom and dad and swung the guilt trip on them or just went and put it on the credit card figuring it was easier to beg forgiveness than ask permission. The way my parents handled it was as completely alien to them as how theirs handled it was to me. You're parents seriously just give you $3,000 man that's awesome. Uh, yeah. That goes pretty quick over the course of a year when you actually have to pay for rent, food, tuition, books, clothes.
I got one for our daughter when she was 12.
It worked out just fine and she is now 30.
Quote:
Originally Posted by elnina
Huh? "You must be at least 18 to apply for a credit card. If you are under 21, to get approved for a credit card, you must provide proof of your independent income or assets to show that you will be able to make the minimum payment amount on the card."
So, how did she GET it and who paid the bills? Was it a prepaid card, or was she just an authorized user on a parent’s account? An authorized user won’t pay the same credit building dividends as having your own account.
I found out about it somewhere around 20 years later when I went to buy my first car and saw my credit report.
My dad did the same thing as Dave did.. Got the card in my name, basically put it up/threw it away.. It was never used. American Express actually was encouraging it at the time is my understanding. He was basically the co-signer on it.
But.. It established a credit file on me.. And, I suppose it helped when buying that first car.
I got my first credit card at 18, but this was when the companies were flooding college campuses giving the cards away like candy. Nearly 10 years later and I've borrowed and paid back tens of thousands of dollars in credit card debt; my FICO score is about 770. But I know for a fact that not everyone is going to be as responsible as I was and am.
My son got his first credit card when he was 18 at the bank that he has his checking and savings account. When he applied for a credit card, he had just started a summer internship...and the form asked current monthly income...and he put down the monthly income that he was making for the internship. He got his cc with a limit of around $750. He's still in college and uses the card for his personal expenses.
Good credit history takes time. I didn't get my credit card until I was 25... which hindered significantly my ability to get a car loan, mortgage, etc. It all took longer than it could have.
While I am all for living within your means, having a great credit can be smart and helpful on many levels! Including more options for business and fewer lost opportunities.
So, I would like my son to get as early of a start as possible! Even better if he could learn to use it and be responsible while still at home and I could show the ropes, teach some things and help out.
It used to be that you could add someone onto your credit card, and have good payments reported to credit bureaus for both members... Heard that option is long gone. (I know one can do some research and find just about any info, but that could take days and days... whereas, if someone could suggest a teenage-friendly credit card here, it would save me a bunch of time and hopefully make that person feel good to give advise!)
Hmm, my dog got a card, and I don't think she was even a year old. But she handled it fairly irresponsibly, I won't get her another one.
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