In today’s increasingly digital world, teenagers are becoming more involved in managing their finances. Whether it’s earning money from part-time jobs, receiving allowances, or learning about budgeting and saving, financial literacy is an essential skill for young people.
With this growing independence, many teens may wonder if they can get a credit card, a tool that can significantly aid in financial management and future credit building.
However, obtaining a credit card before turning 18 is not straightforward. Credit cards are financial products tied to a person’s credit history, and most minors do not have the credit history required to qualify.
Additionally, legal and regulatory restrictions generally prevent anyone under 18 from entering into binding credit agreements. Despite these challenges, there are alternatives that can help teenagers manage their finances and begin building good financial habits.
This article explores the possibilities and limitations of credit cards for those under 18. We will discuss the legal restrictions, viable alternatives to traditional credit cards, and recommend five of the best credit card options designed to help minors start their financial journey.
Legal Restrictions on Credit Cards for Minors
Minimum Age Requirement
Credit cards are legally available to individuals aged 18 and older. The age requirement is set because credit cards are a form of unsecured credit, meaning the cardholder borrows money against their future ability to repay.
Since minors are generally not considered legally responsible for debt, financial institutions cannot issue credit cards directly to them.
Parental or Guardian Consent
While minors cannot hold a credit card in their own name, they can access credit through other means. One common method is for a parent or guardian to add the minor as an authorized user on their credit card account.
In this arrangement, the guardian is responsible for the account, including any debts incurred, while the minor has access to a card for spending. This can be a useful way for teenagers to learn about credit while still under the supervision of a responsible adult.
Financial Institutions’ Policies
Banks and credit card issuers typically have strict policies regarding accounts for minors. These policies are in place to protect both the financial institution and the minor from potential financial mismanagement.
In most cases, options for minors involve prepaid cards or accounts linked to a parent’s or guardian’s account, which have strict spending limits and oversight.
5 Best Credit Cards For Teenagers
Here are five of the best options available for minors who need a financial tool similar to a credit card:
Banco PAN Card
Banco PAN’s credit card for minors offers several benefits, including the ability for the cardholder to adjust spending limits, which allows for better control and customization.
Cardholders can accumulate points through the Surpreenda Mastercard Program, which can be exchanged for exclusive benefits and experiences. The card also provides access to special offers and discounts in numerous online stores, enhancing savings on virtual purchases.
There is no minimum income requirement, and the card may be available free of charge, depending on the account holder’s status.
Inter Gold Card
The Inter Gold Card offers several notable advantages for users under 18. It provides cashback at the Inter Shop, allowing cardholders to get a portion of their spending back.
The card functions as both a debit and credit card, offering flexibility in everyday transactions. Through Banco Inter’s super app, users can explore various investment options, promoting early financial education.
Additionally, the card participates in the Inter Loop Points Program, enabling users to accumulate points on transactions that can be redeemed for various rewards. Notably, the Inter Gold Card has no annual fee.
Trigg Card
The Trigg Card is an excellent choice for minors, offering up to three additional cards for children starting from age 8.
A unique feature is the ability to personalize Trigg Visa cards with designs of popular characters, such as superheroes, providing a fun and personal touch.
The card offers attractive cashback of up to 1.3% on spending, making it a practical way to save money. Furthermore, users can earn up to R$7,200 per year by referring friends to Trigg, adding a financial incentive to expand the user community.
Nubank Card
The Nubank Card allows for additional credit cards for minors, which are linked to the primary account for easy management of limits and expenses.
Benefits include cashback on purchases and no annual fee, making it a cost-effective option. For added security, users can also opt to use a virtual card for online transactions.
Superdigital Card
The Superdigital Card is a straightforward option for minors, providing automatic approval upon application. As a prepaid card, it requires funds to be loaded before use, which simplifies financial management and control.
The card comes with no annual fee, making it a cost-effective choice. Additionally, it offers international acceptance with the Mastercard brand, allowing for use around the world.
Tips for Parents Considering Credit Options for Their Teens
Start with Prepaid or Debit Cards
It’s advisable to begin with low-risk options such as prepaid or debit cards. These cards allow teens to learn the basics of money management without the risk of debt or negative credit impact.
Monitor Spending Regularly
Parents should regularly review the statements and transactions associated with their child’s card. This ensures that the teen is using the card responsibly and staying within the agreed-upon limits.
Educate on Credit Management
Parents should take the opportunity to teach their teens about credit scores, interest rates, and the long-term impact of their financial decisions. This education is crucial for preparing them to handle a traditional credit card when they reach the appropriate age.
Set Clear Limits
Establish clear spending limits and discuss the consequences of exceeding those limits. Setting boundaries helps teens understand the importance of budgeting and spending within their means.
Final Thoughts
Despite the limitations on traditional credit cards for minors, the alternatives discussed can effectively support financial learning and management for young people.
Prepaid and debit cards offer controlled spending options, while authorized user cards provide an opportunity to build credit history under parental supervision. Parents play a crucial role in guiding their teens through these financial tools and ensuring they use them responsibly.
Parents should explore the options available and select the one that best fits their child’s needs and financial goals.
By starting with these tools, teens can gain valuable experience and prepare for more advanced financial products in the future. Financial literacy is a crucial skill, and providing teens with the right tools and guidance can set them on a path to long-term financial success.
