Credit is an essential part of adult life, and starting to build it early is crucial to long-term financial success. If you're a 17-year-old looking to get ahead in the world of personal finance, this article is for you. In this guide, we'll discuss the possibility of obtaining a credit card at 17, explain why it might be a smart move, and highlight the best options to help you on your journey to a solid credit history.
Credit Cards For 17 Year Olds To Build Credit Table of Contents
Can 17-Year-Olds Get a Credit Card?
At the age of 17, you are still considered a minor. While some card issuers accept applicants under the age of 18, they typically require a co-signer, like a parent or legal guardian. Alternatively, becoming an authorized user on an existing cardholder's account can help you build credit without the responsibility of managing your own credit card account.
Co-Signer vs. Authorized User
As mentioned, there are two main ways for 17-year-olds to have a credit card: having a co-signer or becoming an authorized user.
- Co-signer: A co-signer is an adult who agrees to take on the responsibility of the credit card if the primary cardholder fails to make payments. The co-signer's credit score can be impacted positively or negatively based on the primary cardholder's actions.
- Authorized User: An authorized user is added to an existing credit card account and is issued a card in their name. They can make purchases and their activity is reported to the credit bureaus, helping improve credit scores. However, they are not legally responsible for making payments on the account.
Why Should I Start Building Credit at 17?
Building credit as a young adult offers several benefits:
- Developing Good Financial Habits: Learning to manage a credit card responsibly can help shape positive financial habits, essential for success in adulthood.
- Establish a Credit History: A well-established credit history is important for future credit card approvals, loans, and rental applications.
- Lower Interest Rates: Good credit scores often result in lower interest rates on loans and credit cards, reducing the long-term cost of borrowing.
Best Credit Card Options for 17-Year-Olds
Given the limitations of obtaining a credit card at 17, here are some options that can help in building credit through co-signing or becoming an authorized user:
- Secured Credit Cards: These cards require a cash deposit as collateral, which also acts as the credit limit. They are an excellent option for young adults to begin building credit, although a co-signer is required.
- Retail Store Cards: Many stores offer cards with lower credit requirements, perfect for young adults. However, they often come with high interest rates and limited usage locations.
- Student Credit Cards: These cards are tailored for students and often provide rewards and benefits, such as cashback and discounts. They require a co-signer and may have a limited credit limit.
Credit Cards For 17 Year Olds To Build Credit Example:
Imagine Sally, a 17-year-old high school senior. She wants to start building credit to have a solid credit score by the time she turns 21. Sally's father agrees to co-sign a student credit card with a $500 credit limit for her.
Sally uses the card for small purchases like filling up gas or buying groceries and pays off the balance in full before the due date to avoid interest charges. By the time Sally has reached the age of 21, her responsible credit management has earned her an excellent credit score.
Building credit at a young age is an excellent way to develop financial responsibility and set the stage for a healthy financial future. Though options are somewhat limited for 17-year-olds, using a co-signer or becoming an authorized user can be a stepping stone to greater financial independence. Remember, no matter the card, the key to success is responsible spending and timely payments. Share this article with friends and family looking to establish credit, and be sure to explore other guides on Flik Eco for more personal finance tips!