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Suri Cruise, 6, pays with credit

By Janna Herron · Bankrate.com
Thursday, August 30, 2012
Posted: 4 pm ET

If you haven't been following celeb news, Suri Cruise, the offspring of Tom Cruise and Katie Holmes, demands fresh-baked cupcakes at 1 a.m., prefers fine china and carries her own credit card, according to a cover story from a Hollywood tabloid.

Now, there is a host of parenting discussions that can come out of those details, but I'm going to focus on this: Suri Cruise has a credit card with her name on it. I can't verify if it's true, but it's definitely possible with some important conditions.

Katie Holmes

According to Star magazine, Katie Holmes got daughter, Suri, a credit card.

Suri Cruise is too young to get a credit card account in her own name or jointly with someone else. A person has to be 18 years old to enter into a contract, which is what a credit card account is, says John Ulzheimer, president of consumer education at SmartCredit.com.

But Suri -- or any other child -- can be added as an authorized user, or "AU," on an adult's credit card account. The primary credit card holder also can request additional cards in the AU's name. While an AU is allowed to make charges on the account, he or she isn't financially responsible to pay the debt back. That falls on the primary credit card holder. In this case: Katie Holmes.

(The tabloid noted that its source said the account belongs to Holmes, who got her daughter her own card.)

I emailed the major credit card issuers to see if they have age limits on AUs. Chase and Wells Fargo representatives confirmed that their companies don't have minimum age requirements for authorized users.

American Express said its cardholders can request additional cards with custom credit limits for anyone 15 years old and older. This allows parents to set spending limits on the card account and change them at any time.

"The additional card has the teen or young adult's name on it," says AmEx spokeswoman Leah Gerstner, "as well as a distinct account number which helps protect the parents' account if the card is ever lost or stolen."

Exposing your child to credit cards before they are on their own is a good idea, says Ulzheimer.

"Just not at six years old when they're still trying to figure out how to get to their first grade classroom," he says. "Sixteen is a good age as it's an unofficial 'next step' toward adulthood."

That way, your teenager has two years before college to learn smart credit card behavior. You can teach them how to keep charges below 10 percent of the credit limit to boost their credit score. You can show how much money you end up paying in interest if you send in only the minimum payment each month. And all the while, your child can build a good credit history while being an AU on your card, an advantage for them when they eventually apply for credit on their own.

How did/will you teach your kids about credit cards?

Follow me on Twitter: @JannaHerron

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14 Comments
Bobbie
October 08, 2012 at 7:18 pm

I doubt highly if any of this is even true! Things have a way of being morphed when someone is a celebrity.

VegasDude
October 01, 2012 at 2:13 am

I carry maybe $20 in my wallet as an "emergency backup" for gas, etc .... ALWAYS USE my Debit card now for EVERYTHING.... Makes life a LOT EASIER... I just turned 50, and can remember when we had passbooks at the bank... handwritten when you made deposits.. at banks with a line of teller windows staffed with 5-10 real people, WOW, lol... AND when the FIRST ATM's rolled out... Was like WOW... Like Dinosaurs now.... extinct... =)

Luise Strait
September 29, 2012 at 9:47 pm

This is about really rich people - not your ordinary child in any way.
She has nothing to worry about regarding her credit.
She's not signing for anything.
This is so her expenses can be accounted for so her parent's accountants can keep track of expenses. It was most probably in the divorce decree. Under the circumstances it makes perfect sense.
Big money - different rules.
The nanny, bodyguards, and other care takers have their cards as well and have to keep track of their spending.
This is a very large "company" of sorts and ultimately has to be run like one.

MJG
September 25, 2012 at 2:39 pm

My children have debit cards for their own bank accounts so once they have saved up enough money to purchase what they have been saving for yes they get to use their card to purchase it on their own. My oldest(9) monitors her account and it allows me to deposit their allowance, child support, birthday checks, or whatever into their accounts. It allows them to feel the pinch of spending their own money and assures that they know what they have to spend prior to making a purchase. Some people do it with cash I choose the debit card since it allows us to track and monitor spending rather than being completely dependent on receipts which they tend to loose.

Is it possible that Suri has a debit card rather than a credit card?

banker
September 23, 2012 at 9:44 am

Your statement that the AU is building his/her credit by using the card is incorrect.The AU credit card is just a card that gives the user permission to access someone else credit card.The credit card company doesn't ask for the AU SS#,just the name. The only way to help a young person start building a credit history is by being added as JOINT user on the parent credit card.

l
September 22, 2012 at 10:04 am

WHO CARES!

danielle
September 21, 2012 at 5:38 pm

Credit cards are the new money now......no one carry money anymore......so it's important that kids star using the card instead.

KindaKnow
September 21, 2012 at 12:33 am

She is NOT THE FIRST rich kid with a credit card, so what's the big deal?

melissa
September 17, 2012 at 8:13 pm

Why would a six year old need a credit card? Shouldn't she always be in the company of a parent, nanny or guardian? So, why would she need to pay for anything? Ridiculous. That child is going to be a holy terror when she comes of age. Think Paris Hilton x 10.

ships58
September 16, 2012 at 11:01 pm

ok, while I would not ever give a minor a credit card, I do understand that in this case it probably makes sense. She moves in a world very different of ours, she has body guards, nannies, and others taking her places, and one of the beliefs of Scientology is that free will be allowed and encouraged at all times. Soooo if she wanted cupcakes at midnight, someone could take her card and go get them.

My children, even the older ones, do not need credit cards, I want them to know the value of money, to understand the power and responsibility of credit and I want them to learn how to work, save and plan for things they cannot afford. Let's face it, that will not be this child's reality, her father and her mother are very rich, and she will have no normative relationship with money, credit or the need to work in order to provide for ones self.