Do I need a co-signer for my credit card if I’m under 21?
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Getting a credit card in your name can help you establish a good credit history, which can come in handy later when you’re ready to buy a car or a home. But although it’s great to build credit early, it can be more difficult if you’re not yet 21 years old.
The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 created new rules for card issuers regarding applicants under 21. Specifically, the Act requires people under 21 to have proof of sufficient income or a co-signer — someone who agrees to share responsibility for the debt.
Unfortunately, most major credit card issuers have stopped allowing co-signers. While that doesn’t mean you can’t get a credit card at all if you’re under 21, it may limit your options.
Why you might not qualify for a credit card on your own
Technically, you can apply for a credit card as young as age 18. However, the CARD Act requires card issuers to use discretion when approving younger applicants. To get a credit card in your name under the age of 21, you need to have one of the following:
- A co-signer who’s willing to share responsibility for the card
- Proof of independent income
These rules are designed to protect young consumers from abusive credit card practices that might cause them to get in over their heads with debt. They can also help young adults learn good credit habits. You may be less likely to run up a high balance, for example, if your parent co-signed your card and is monitoring the account’s activity.
This rule benefits the credit card company, too, since there’s someone else who can be held responsible for the debt if you can’t pay. The credit card company can take collection actions against the co-signer, including suing them for the debt. But getting a credit card with a co-signer has become more difficult as most major card issuers no longer allow cosigners.
That means if you’re under 21, your ability to get a credit card in your name will largely hinge on whether you have income or not. The CARD Act doesn’t specify a certain amount of income needed, but if you don’t have independent income — which may be the case if you’re going to school full-time or have a job but aren’t earning a lot — you’re less likely to get approved.
Which credit cards allow co-signers?
Most major card issuers have shifted away from allowing co-signers of any kind. As of February 2023, the list of card issuers that do not allow cosigners includes:
Bank of America does offer an alternative to the traditional co-signer arrangement. If you apply for a Bank of America credit card and are approved, you can ask them to add a co-applicant to your account. This isn’t exactly the same as having a co-signer upfront, however. And if you’re under 21, you’ll still need to show proof of income to get approved.
You may also be able to find credit cards issued by smaller banks or credit unions that still allow co-signers. If you have a student checking account with a local bank or credit union, that could be a good place to start when looking for cards that allow co-signers. Or you could check with your parents’ bank if they’re willing to co-sign a credit card on your behalf.
Alternative: Become an authorized user
If you can’t get a credit card in your name because you’re under 21 and don’t have an independent income source, you could instead become an authorized user on someone else’s credit card account.
As an authorized user, you’ll be granted access by a primary cardholder to their card account. You’ll have your own credit card with your name on it that’s linked to the account. And while you can use the card to make purchases, you’re not responsible for the debt that’s created. You won’t be able to do things like:
- Request credit limit increases
- Add other authorized users
- Redeem rewards, unless you’re authorized to do so by the primary cardholder
Most major card issuers report authorized user status to the three major credit bureaus. As long as the primary cardholder is practicing good credit habits (paying on time, keeping balances low, etc.) your credit score can benefit. The impact isn’t exactly the same as having a card in your name alone, but you can still piggyback off someone else’s good credit to help establish a credit history of your own from a young age.
There are pros and cons to being an authorized user, with the main pro being the opportunity to build credit. Just make sure you verify with the issuer that it will report your authorized user status to the credit bureaus, so you can reap the credit-building benefits. You should also make sure you choose an account holder you trust. If the primary cardholder pays late or has a high credit utilization on the card — or worse, defaults on the balance — your credit score could go down.
Overall, becoming an authorized user is worth considering if you’re under the age of 21 and want to build credit. Be sure to choose someone who has a history of responsible credit use, and determine some ground rules upfront for how you’ll use the card and what you might pay toward the balance.
Credit cards for when you turn 21
Once you turn 21, you’ll be able to apply for student credit cards or other cards in your name without needing a co-signer according to CARD Act regulations.
However, the application will probably still ask for your annual income. Keep in mind that your approval can depend on your credit score. If you don’t have a lengthy credit history yet, your best option may be starter credit cards or secured cards.
Starter credit cards tend to have lower credit limits, and they may or may not charge an annual fee. A secured card requires a cash deposit to open, which typically doubles as your credit limit. Either one could be a good stepping stone for building credit so you can eventually get approved for cards that offer more features and benefits.
The bottom line
When you are under 21, getting your first credit card can be daunting if you don’t have independent income or the card you’re interested in doesn’t allow co-signers. You could wait until you turn 21 to apply for a credit card, but taking the authorized user route could get you on track with building credit sooner. The most important thing to remember when getting a credit card at any age is to use it responsibly, by charging only what you can afford, paying on time and keeping your balances low.