So you’re already an authorized user on your parents’ credit card, but you’re looking to strike out on your own in the wide world of plastic. What are your options? We’ll break down the rules around applying for your own line of credit and help you decide which card is best for you.
First off, the age restrictions
You might have heard that you have to be 21 to get a credit card without an adult cosigner. That’s actually not quite true. The law imposing an age limit – the Credit CARD Act of 2009 – says that applicants under the age of 21 have to meet a minimum income requirement, but that requirement holds for everyone, no matter how old they are.
Now, the income requirements
If you want apply for a credit card on your own, you’ll have to prove to the bank that you’re capable of paying your bills. Only the person (or people) whose name is on the loan will be responsible for paying off the balance, so the bank has to make sure it’s not lending money to someone with no money coming in. The requirements vary by bank.
That said, if you don’t meet the income requirement but are over 18, you have another option: secured credit cards. Secured credit cards are backed by an upfront deposit (often the amount of your credit limit) that’s returned to you when you close the account. Since the bank isn’t taking a risk by lending to you, it won’t require a minimum income. A great option for a no annual fee secured credit card is the Digital Federal Credit Union Visa Platinum Secured Credit Card. Anyone can join DCU by making a one-time, $10 donation to the nonprofit Reach Out for Schools.
You might be wondering what good a secured card does you if you have to make an upfront deposit. The benefit of using one is that it helps to build your credit, and if you want to get your own account, this is a good first step.
I’m over 18 and have the money. Now what?
If you’re ready to pull the trigger on your own credit card, here are a couple good options to consider.
The Chase Freedom® has a $0 annual fee and 5% cash back on rotating bonus categories up to $1,500 spent per quarter. Those categories have included gas, movies, Amazon.com and more. It’s a solid card that you’ll be using for years.
The Citi ThankYou® Preferred Card for College Students is an excellent option for college students who enjoy eating out (or getting takeout) and going to concerts, sports and the like. It has an annual fee of $0, and earns 2 ThankYou Points per $1 on dining and entertainment and 1 point per $1 elsewhere. You can usually redeem ThankYou Points for gift cards at 1 cent per point.
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