Helping a child build a credit history

Starting adulthood without a credit history can make it difficult to rent an apartment or purchase a car. Eliminate this challenge for your kids by adding them as an authorized user on your credit card. Here’s how;

How you can help

1) Add them to your credit card as an ‘authorized user’ - usually done through the credit card account website

2) When a card comes in the mail for them, cut it up
3) Continue to pay your credit card bill on time

That’s it! They’ll build excellent credit as a result of your good financial habits, and will begin their adult life with a financial leg-up. The key though, is not letting them use the card that will arrive in the mail when you add them as an authorized user. It's best to cut it up as soon as it comes in the mail. Better yet, encourage your child to use a debit card and avoid credit cards altogether.

If you don’t have good financial habits and have trouble paying your bills on-time each month, don’t do this or you will give your kid lousy credit which is no help at all.

This is an easy way to way to help a child build credit without risking them getting into trouble with a credit card. Once they’re older and have good credit, they will be more capable of managing their use of credit cards and other credit products. They will also have a sense of appreciation that you helped them navigate this process while they were young.