Written by: David Ogden
Credit and Debit Cards for High School Students
It wasn’t too long ago that the idea of a high school student having a credit card was pretty ludicrous, unless that student was named Rockefeller or Buffett. Things are different now, though, as parents look for ways to give their children more financial independence and responsibility, and the credit card is becoming a tool to help high school students not only pay for the things they want and need more easily, but also to learn about how to manage credit.
If your high school student is a senior who is 18 years old or older, they are actually legally able to apply for a credit card on their own. However, for a credit card company to grant some 18 years old or older a credit card, that person would have to have sufficient income and match the card issuer’s requirements. The latter requirement has been in place since 2010 as part of the Credit Card Reform Act. It basically means that you need to have a job, even if it’s not a “real” year-round big money job. You just have to have some kind of income. Banks will pretty much expect a high school student to have no credit history, so that won’t be a problem, either. For college-bound seniors, there are credit cards just for college students with similar requirements.
If your student is under 18, the options are a bit more limited, because they are not legally allowed to have their own card without a parent or guardian’s name on the card. There are a number of credit cards that teenagers between the ages of 13 and 18 that a parent can obtain with their parents or guardians.
Reloadable prepaid cards like the American Express Pass Card are an option for students. With these, you load the money you want the student to have onto the card before they use it and they can only spend up to that amount, so they have the convenience of a credit card without the risk of going into debt. The downside of prepaid cards is that there are often fees attached and some can be rather substantial, proportionally.
Parents also sometimes have the option to issue their kids a secondary credit card on the parental account. In this situation, the parent or guardian can whatever limit they wish and make the student pay their portion of the bill each month. If the parent chooses to add their child’s social security number to the account, it could start to build the child’s credit history in a relatively safe way. Another added bonus of this arrangement is that the student’s purchases will help the parent earn credit card rewards.
There are obviously a number of debit and credit card options available for high school students, and there is no particular one that is the right answer for everybody. By considering the options and talking them out with your student, you can find the right option for your student at this point in their life.
Compare before applying.