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Credit cards are a powerful tool for building credit and teaching kids about money. But with all the worries of credit and the responsibility that comes with it, diving straight into credit can present a lot of stress and quickly lead into a deep hole of debt – which is precisely why, historically, there haven’t been any credit cards for kids.

But that’s OK, for two reasons.

  1. That’s changing as banks and other financial companies are exploring special credit cards tailored toward minors and beginning to introduce them to the market.
  2. If you don’t feel comfortable with your kids having a credit card for now, you can take an important first step toward that by setting them up with their very first debit card.

Today, we’ll explore your options. We’ll discuss this emerging class of card, teach you more about the best debit cards for kids, and explain more about the relationship between kids and credit cards.

The Best Credit Cards for Kids

young man woman smartphones apps

Any parent can counteract poor money habits through financial education. With the right tools, you can give kids an edge that’ll help them build credit and make smart financial decisions.

Simply put: Unsecured credit cards—the traditional type of credit card that doesn’t require a deposit beforehand—are considered too hazardous a tool for kids. That’s why there are rules preventing companies from opening individual credit card accounts for anyone under age 18.

Historically, parents have had two solutions:

  • Get their child a regular or prepaid debit card.
  • Make their child an authorized user on the parents’ credit card.

The former, which we’ll talk about in a minute, is considered the safer and more traditional route. Traditional (and especially prepaid) debit cards for kids offer a number of guardrails to control a child’s spending, and over the past few years, several child- and teen-focused debit-card solutions have popped up.

While some parents have gone the latter route, making your child an authorized user on your credit card has some serious flaws. Many consumer credit cards won’t allow you to set spending limits on authorized users, for one. Also, if you make poor credit decisions, your child’s credit could suffer. And because kids at most are merely authorized users, credit card providers naturally don’t make their cards, websites, and apps with minors in mind.

However, multiple financial companies are working on an emerging class of kid-focused card, and one such product is already on the market.

Step (Best Secured Credit Card for Kids)

Step signup new nocode

The Step Visa Card is a unique “hybrid” secured credit card that’s tailor-made for kids and teens. It functions just like a Visa credit card, but it offers the safety features of a debit card—and most importantly, it can help build your child’s credit history.

Parents, who sponsor the card, can opt to have Step report the past two years’ worth of information—transactions, payment history, and more—to the credit bureaus when their child turns 18. Credit scores are assigned once someone turns 18, and most teens will begin with a score of under 600. But based on a Step survey, 18-year-olds who used Step for at least seven months had an average credit score of 725.

How much of a difference could that better credit make? Step says that an 18-year-old user with a score of 725 could expect these kinds of savings compared to users with lower credit scores:

  • Car insurance: $147 per month instead of $250 per month
  • Student loan: 6.24% interest rate instead of 10.46%
  • Security deposit: 1 month’s rent instead of two months’ rent

Step also provides a seamless experience for teens who “graduate” into young adulthood. When they turn 18, Step allows cardholders to keep their old credit card number and account, doing the legal heavy lifting in the background to get them appointed as the legal owner of their account, and transitioning them to an independent account. Everything—from how they access the app to their account numbers to their investments—stays the same from their perspective, and Step continues reporting credit on the same “credit line,” which allows them to keep building their credit history.

In other ways, Step acts like a debit card.

Parents can add money directly into their child’s FDIC-insured Step account. A regular Step account allows a child to have both a physical spending card as well as a virtual card in the Step app, while a Parent Managed Account only allows the child to spend via a physical card. Children can use both the virtual and physical cards to spend anywhere Visa is accepted, and they can use the physical card to withdraw money for free at more than 30,000 ATMs.

And parents needn’t fear their child overdrafting—they can’t spend any money they don’t have.

Other features include Savings Goals, where any money saved can generate 5% in annual interest (compounded and paid monthly) with a qualifying direct deposit*; Savings Roundup, where purchases are rounded up to the nearest dollar and the overage is put toward a Savings Goal; an “invest” function that allows users age 13 and older to buy and sell Bitcoin; and opt-in cash or Bitcoin rewards from companies including Hulu, Chick-Fil-A, CVS, and the New York Times.

The Step Card is protected by Visa’s Fraud Protection and Zero Liability guarantee. That means if your teen’s card gets lost or stolen, or misplaced and fraudulent charges crop up, you can dispute the charges within a certain time frame to avoid liability for paying.

Visit Step to learn more or sign up today. Read more in our Step review.

Related: Best Debit Cards for Teens

Why Some Parents Opt for Debit Cards Instead

teen young woman credit debit card blue background

Many parents feel safer starting their children off with debit cards.

For young children without steady income or established budgets, or who haven’t yet developed a strong sense of money management, a prepaid debit card might be the best choice.

Prepaid cards allow parents to load funds onto their child’s spend card and monitor their activity.

If a child goes overboard, it’s easy to transfer funds from the associated parent account on the prepaid debit card, set spending limits on how much they can spend or where they can shop or even outright freeze their ability to make more purchases.

Prepaid debit cards for kids give parents the tools necessary to control spending, provide safeguards to teach their children about money management until the training wheels can come off, and offer children a sense of financial independence they want.

And because kids can’t spend what they don’t have on prepaid debit cards for kids, they can’t overdraw—meaning no credit implications for your kids’ future finances.

So, let’s talk about the lack of unsecured credit cards for kids, as well as what makes debit cards an attractive substitute. We’ll cover:

  • Why aren’t unsecured credit cards for kids allowed?
  • How old do you need to be to have a credit card in your name?
  • How credit cards compare to prepaid debit cards for kids
  • Best debit cards for kids
  • What considerations you should make before opening a card
  • What credit habits you should target
  • Money lessons to consider

We’ll start out by discussing the problems with traditional credit cards for kids. Then we’ll look into why debit cards often make more sense as a starting point before transitioning into full-blown credit card options in their wallets—and discuss the best options for this important step.

Let’s dive in!

Why Aren’t Unsecured Credit Cards for Kids Allowed?

father mother son family credit debit card account

Why would you give a minor a credit card?

Well, a credit card for kids could help your child develop healthy money habits from an early age, allowing these financial literacy skills to compound from the start. However, if not managed properly, credit cards can quickly spell disaster. That’s because they front a line of credit, offering buying power you might not necessarily have the means to afford.

Combine this lack of financial resources with a considerable marketing effort to attract young consumers, and it would spell disaster from which it could take years to recover.

That’s why unsecured credit cards for teens simply don’t exist.

Typically, teens can’t get a credit card unless their parents grant them access on their own credit card account as an authorized user. Some credit cards allow this as young as 13, while others don’t specifically state a minimum age requirement. Otherwise, teens can’t get their hands on a credit card until they turn 18.

Even then, you’ll want to make sure you have the training wheels firmly attached to this credit card. That’s because one of the most common mistakes encountered by young adults is accumulating costly credit card debt.

You might be able to help your child out if and  when this happens. But why not head it off at the pass instead? Share, practice and instill financial literacy skills with your child as early as possible—before real money is at stake.

Kids can learn about money management through several means, though the best option is through modeled behavior (in other words, seeing you handle credit cards responsibly as an adult).

In general, though, it’s best to think of credit cards for kids as an opportunity for a teen to access credit for the first time and begin building a credit history.

Along with that comes a responsibility–one you can teach them about by explaining how managing their credit well will build their credit scores and put them on the path to financial security.

How old do you need to be to have a credit card in your name?

debit credit card

Minors don’t meet the eligibility requirements to receive a credit card under their own name. Even once your child reaches the age of majority (18 in most states), they’ll still face a hurdle to obtain a card by themselves.

They’ll need to meet other criteria outlined in the CARD Act of 2009 related to income or expectation of having access to financial assets. As a result, parents interested in getting a credit card for their kids will first need to consider adding them as an authorized user to their own account.

18- to 20-year-olds can have their own credit card under certain circumstances:

  1. Have income from a job or other independent sources of income; or
  2. Qualify with third-party income if they have a reasonable expectation of access to it; and
  3. Have a registered Social Security Number or Individual Taxpayer Identification Number (usually)

If your child meets these items, and is age 18 to 20, you might consider pointing them toward credit cards for those with no credit history (starter credit cards). And if your child is a student looking to build credit, consider these best credit cards for students with no credit history.

Let’s now talk about kids’ debit card options, how they allow you to establish important concepts such as savings goals, and what they entail.

What Is a Debit Card for Kids?

parents son kid online debit credit card account

Minors do not have the legal capacity to enter into contracts themselves. Thus, children can’t open their own bank account until they reach the age of majority in their state—often 18 years old.

Parents interested in offering their kids a bank account and paired debit card can still choose a number of possible paths:

1. Opening a sub-account from their own bank account

This can provide your kids with a card to use while you can maintain control over the account itself. Under this situation, it’s still likely that your child will need to be at least 13 years old before receiving a debit card.

However, these accounts might not come with the features you want for maintaining control over your child’s spending behaviors.

2. Opening a joint banking account

Another option to consider includes opening a joint bank account with your kid or teen. This means you both have ownership over any joint accounts you share, as well as the assets held inside them.

3. Opening a debit card for kids (and teens)

This is a great route for balancing parents’ desires to teach their kids about money and providing sufficient parental controls and oversight to make sure a child makes smart spending and money decisions.

Debit cards for teens offer parents custom spending controls, spending notifications, merchant blocking, daily ATM and spending limits, plus other controls enabled through feature-filled mobile apps.

Some new apps even allow you to lock the card or limit where your child spends money.

These cards also effectively function as a prepaid debit card for kids and teens because you can establish parental controls. Traditional banks or debit cards might not allow you to do this beyond keeping the balance at a certain level.

Related: 5 Best Free Debit Cards for Kids & Teens [Earn, Save & Spend]

What Are the Best Debit Cards for Kids and Teens?

The most natural moment to place plastic in the hands of your children with their name on it is in high school when they’re beginning to develop independence, getting a driver’s license or spending time away from with friends.

Though, instead of credit cards for kids, you can start them off with debit cards for kids and teens that withdraw money directly from the prepaid card balance or from the associated bank account.

A child will become familiar with the responsibility of carrying a card and not purchasing more than they can afford. You can load it with weekly allowance payments, money from a summer or after-school job or even financial gifts they receive from friends and family.

After they show enough responsibility and they turn 18, you can move on to credit cards for kids.

Have a look below at some debit-card alternatives to credit cards for kids, or consider adding your child to one of your existing credit cards as an authorized user. We’ve compiled a list of the best debit cards for kids and teens so you can compare them and determine which card makes the most sense for your (and importantly, your child’s) needs.

AppApple App Store Rating +
Best For
greenlight transparent logo thinGreenlight☆ 4.8 / 5
Customer rating and parental controls
$4.99/month for up to five kidsFirst month free
copper logo thinCopper Banking☆ 4.9 / 5
Teen financial independence
Copper $4.95/mo., Copper + Invest: $7.95/mo.None
gohenry logo thinGoHenry☆ 4.6 / 5
Accessible customer service support
Individual: $4.99/child/mo. Family: $9.98/mo. for up to four childrenFree month trial
busykid logo thinBusyKid☆ 3.5 / 5
Teaching balanced financial approach via chores & allowance
$3.99/mo (5 cards); $38.99/yr30-day money back guarantee
famzoo logo thinFamZoo☆ 4.6 / 5
Financial literacy resources
$5.99/mo per familyFree month trial
Axos Bank logoAxos First Checking☆ 4.7 / 5
Teens ready to learn about money management
chase logo transparent text thinChase First Banking☆ 4.8 / 5
High customer satisfaction from a major bank without fees
Free, no feesNone
*Apple App Store Rating as of November 8, 2023.


1. Greenlight (Best Overall Debit Card)

greenlight sign up

  • Available: Sign up here
  • Price: Free 1-month trial, $4.99/mo. after

Greenlight provides parents control over where their kids can spend money by limiting the stores where their cards work. Parents can get alerts when money is spent on the Greenlight debit card for kids and for how much.

Further, parents can open an investment account for kids to get their children investing in stocks and index funds for the first time.

Greenlight works like a prepaid debit card, allowing you to transfer money onto the card for your child to pay for expenses at approved locations.

You can choose how much money to load onto the card and your child will be cleared to make approved purchases so long as a money balance backs up the card.

Greenlight charges $4.99 per month for up to five kids. Replacement cards cost $3.50 each but are free the first time. If you need to replace your card quickly, you can get express delivery for $24.99.

The company also offers a personalized card for $9.99/year with your own photo or design.

Greenlight offers interest (the only kid and teen prepaid debit card to do so) and you also may set up “parent-paid interest” between you and your child. This allows you to foot the bill and pay interest on accounts for up to five kids.

If your child asks for extra money to get added to the card, you can have them take a photo of the purchase they want to make and receive your approval. This gives you control and allows kids to discuss with you why a purchase either is a good or bad idea.

If your child has a job, they can add their own funds to the card as well through direct deposit.

The Greenlight debit card is a good choice for parents looking to teach their kids the importance of saving money and making prudent financial decisions.

This financial product can be an effective learning tool for helping kids to understand why saving should be a priority as well as to help parents simplify paying an allowance or tracking chores.

It’s also a rapidly growing app many parents have come to use for raising financially-smart kids. The product has no minimum age requirements, but recommends starting at 6 or later.

The Greenlight Mastercard Debit Card for kids offers the best combination of features among all cards we reviewed, including its simple mobile app.

Who says kids can’t have their own debit card? Nowadays, there are plenty of options for parents and our top choice is Greenlight.

Read more in our Greenlight Card review.

Related: 13 Best Allowance and Chore Apps for Kids [Easier Family Life]

2. Copper Card (Best for Combined Teen Independence and Cost)

copper banking

  • Available: Sign up here
  • Price: 30 days free. Copper: $4.95/mo. and Copper + Invest: $7.95/mo.

Copper Banking was founded on the belief that kids and teens should have equal access to financial education and should be empowered to learn by doing. Now, the company is on a mission to help children gain real-world experience by giving them access to their money in a way that traditional banks can’t.

The Copper app and debit card teaches your child how to make smart financial decisions by creating a platform where parents and their kids can connect. With the Copper app, you get easy snapshots of your accounts. And with the Copper Debit Card, it’s easy to shop in-store or online, including with Apple Pay or Google Pay.

Plus, users get exclusive access to engaging advice curated by a team of financial literacy experts who provide tips on how to take control of their financial future.

Copper Banking Features:

  • Send/Request: Kids and parents can easily send and receive money all at the touch of a button.
  • Spend: Spend using Apple or Google Pay, or using the Copper Debit Card.
  • Withdraw: Access your money from more than 55,000 fee-free ATMs.
  • Monitor: Get a snapshot of all your child’s spending in an easy-to-read dashboard.
  • Save: Gain quick snapshots of your kid’s savings and helpful tips on how to save even more. Set up savings buckets and save for the things that you want.
  • Learn: With the help of Copper’s team of financial literacy experts, gain bite-sized tips on how you can maximize your money and prepare yourself for your financial future.

The basic Copper account includes the above banking features. With Copper + Invest, your child also gets access to automatically curated smart portfolios built with their preferences in mind. Your child is given a questionnaire that helps Copper determine a portfolio based on their age, income, net worth, investment objective(s) and investment horizon. Copper then recommends one of three ETF portfolios—Moderately Aggressive, Aggressive, and Extra Aggressive—made up of thousands of stocks. Parents can review the portfolio to ensure it matches with not just your child’s preferences, but your family’s. (Portfolios can be changed later on by accessing the Support chat.)

Your child can begin investing for as little as $1, then add more contributions down the road. Copper will automatically rebalance the portfolio as needed to make sure it always keeps up with your child’s investment preferences.

Copper is available to kids 6 years and older.

Read more in our Copper Banking review.


3. GoHenry (Best for Customer Service)

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  • Available: Sign up here
  • Price: 1 month free. Individual: $4.99/child/mo. Family: $9.98/mo. for up to four children

GoHenry is a banking app for minors that comes paired with prepaid debit cards for parents to oversee and manage their children’s account balance. You have an online account which comes linked to individual accounts for each of your children.

You can manage all of the money held in each account through the company’s app and online account portal.

Each child will receive their own GoHenry debit card which comes paired with parental controls you can set for your children.

What’s nice about GoHenry is the ability to spend only the money available on the card, meaning you don’t need to worry about costly overdraft fees or accrue debt.

You open a GoHenry account, receive your children’s debit cards in the mail 7-8 business days later, set up an automatic weekly allowance transfer into your children’s accounts and can set up one-off or weekly spending limits.

This will keep your children’s spending in check and you can block/unblock the card as needed as well as choose the stores where your kids can shop.

With time, the controls provided by the app and the guidance you offer can help your kids to earn, save, spend and give with good money habits.

GoHenry is one of the best debit cards for kids for customer service. They offer 24/7 phone availability, email access and social media engagement, ensuring users can solve their problems quickly and with little hassle.

The product has no minimum age requirements, but recommends starting at 6 or older.

Learn more by reading our GoHenry debit card review.

Related: GoHenry vs. Greenlight

4. FamZoo (Best for Financial Education)

famzoo sign up

  • Available: Sign up here
  • Price: Free trial, then $5.99/family/mo.

FamZoo is another service for parents interested in opening prepaid debit cards to manage their children’s spending.

It works by having parents release money into their child’s account and then having the card work with a loaded balance. Money can be loaded onto the cards at any time.

FamZoo acts like a regular checking account with a linked debit card except FamZoo makes sure the account can’t be charged overdraft fees, saving you money.

Adults are able to monitor the transactions being made. After a free trial, this app costs $5.99 per month, but the price goes down if prepaid in advance.

FamZoo is our top education choice because of its strong financial education library which improves its overall value.

The product has no minimum age requirements, but recommends starting earlier than later.

Related: Greenlight vs. Famzoo

5. First Checking by Axos Bank (Best Free Debit Card for Teens From an Online-Only Bank)

axos bank first teen checking sign up

First Checking by Axos Bank is the ultimate starter checking account for teens which also comes with a debit card. The world of banking can be a little scary, but not with the simplicity and power of Axos’ First Checking Account.

The account works as a joint account between a parent or guardian and their teen, allowing for easy-to-set, customizable parental controls with a debit card dashboard.

Parents and teens can manage almost every part of the banking experience through a convenient mobile app or through the online desktop portal. Perfect for modern families who always find themselves on the go.

The First Checking account from Axos Bank gives teens their first taste of financial independence by giving them their own checking account (which pays interest!) and free debit card for teens that has daily cash withdrawals limits of $100 and purchase limits of $500.

This provides safeguards against teens getting carried away with the money held in their account.

Further, you can have up to $12 of domestic ATM fee reimbursements per month, avoid any monthly maintenance, overdraft or non-sufficient funds fees—essentially making the account free!

The account carries the highest level of security through biometric authentication techniques like fingerprint readers, voiceprints and facial recognition (pending smartphone feature availability).

The product has a minimum age requirement of 13 and will convert to an Axos Checking Account after reaching the age of majority.

Read more in our Axos First Checking Account review.


6. BusyKid

busykid sign up

  • Available: Sign up here (Devices: Android, Apple iOS/iPhone/iPad)
  • Price: $3.99/mo., $38.99/yr. (up to 5 cards)

Are you looking for a way to teach your kids about money through chores, earning an allowance and managing their money on prepaid debit cards for kids?

BusyKid is an award-winning, parent-approved app that educates kids about money. It’s a way to teach your children how to manage their allowance and learn important money lessons.

The BusyKid Visa Prepaid Spend Card lets them spend their money in stores or online with just one swipe of the card. You can even set up automatic savings. The product has no minimum age requirements, but recommends starting earlier than later.

Your child will be able to earn real money by completing chores and tasks around the house each week while learning valuable financial skills like budgeting, saving and giving back.

Plus they’ll have fun earning rewards from brands like Disney on BusyKid’s weekly challenges!

BusyKid is an easy-to-use, interactive kid chore app with a debit card that will help them learn and practice important real-life lessons from the palm of their hands.

They can earn, save, invest, donate or spend—all while having fun! And it couldn’t be more simple.

Parents set chores and allowance gets directly deposited each Friday!

  • Earn: Kids can earn by completing tasks assigned by parents
  • Save: They can save up to 10% of their weekly allowance automatically
  • Donate: They can give back by donating 1% of what they make to charity
  • Spend: When they’re ready for independence, BusyKid has a Visa Prepaid Spend Card so kids are never without cash in hand.

To get paid, parents need to approve the Payday text message sent through the app each Thursday if your kids are to be paid on Friday.

Some fees apply for various actions you can take through the app and with the card as well.

Finally, BusyKid also allows children to invest their earnings through the app. Doing so requires setting up a separate Stockpile custodial account.

Related: 10 Best Greenlight Alternatives

7. Chase First Banking (Best Free Debit Card for Kids From a Major Bank)

chase first banking sign up

Ready to teach your little ones about money, but not quite sure if you have the time, patience and expertise?

Chase First BankingSM offers simple banking for both of you in one location: the Chase Mobile® App—for free. Manage all accounts with this mobile app and encounter no fees as well as find yourself able to withdraw money on 16,000 Chase ATMs around the country. The account is designed with kids 6-12 in mind, and available for ages 6-17.

At the heart of Chase First BankingSM sits one of the best free debit cards for kids and teens that works anywhere Visa is accepted.

Need insight and oversight into your child’s spending and saving? You can set spend alerts and limits as well as specific locations all in your Chase Mobile® app.

Teach your kids to spend, save and earn—all from the Chase Mobile® app. Chase First BankingSM helps parents teach teens and kids about money by giving parents the control they want and kids the freedom they need to learn.

To get started, you’ll first need to be a Chase customer with a qualifying Chase checking account.

Consider opening a Chase Total Checking SM or Chase Secure BankingSM account to qualify.

  • Chase Total CheckingSM also grants access to more than 15,000 Chase ATMs and more than 4,700 branches. You can pay $0 in monthly fees, subject to meeting certain conditions.* And if you set up direct deposit within 90 days of coupon enrollment, you can earn a $300 sign-up bonus!
  • Chase Secure BankingSM offers the same Chase ATMs and branch locations as well as a $100 sign-up bonus when you make stated qualifying activities and meet certain conditions.

Once you open a qualifying Chase Checking account, you may apply for a Chase First BankingSM account for your child.

Read more in our Chase First Banking review.


Related Questions on Debit Cards and Credit Cards for Kids

What is a prepaid card?

pros and cons of teen debit cards

A prepaid card is a type of payment card that can be loaded with money in advance and then used to purchase goods or services without incurring debt from the issuer.

The most common type of prepaid card is a prepaid debit card, which acts like making bank account withdrawals when purchasing goods and services.

You can also use a secured credit card, which works similarly to traditional plastic but requires you to front the money you spend to avoid overspending your balance.

You can also have another type of prepaid card, such as gift cards, which can only be spent on one merchant offering a particular product or service.

Do debit cards for kids help build credit?

working teen small business retail part time

Despite a prepaid debit card having the same look and feel of a regular credit card, these cards don’t tend to help to build your credit like a credit card can.

For an account to impact your credit score, it needs to count as a debt or liability. To build good credit, you need to make regular payments on these debts over long periods of time. This factor plays the biggest role in building your credit. The secured Step Visa Card, for instance, can report two years’ worth of payment history once you turn 18, and will continue providing updated data to the credit bureaus after that.

A prepaid debit card, on the other hand, works like a regular debit card where you load the card with money (or, in the case of a debit card issued by a banking app or institution, have a balance in your account) and draw on the funds when you make purchases.

You can use a prepaid card like a credit card, but it won’t necessarily build credit like a credit card. Some debit cards do offer the ability to run them as credit cards when processing payments, acting as a means for building credit history and your credit score.

Though, for most prepaid cards, because you don’t borrow money, the account doesn’t get reported to credit bureaus and therefore has no effect on your credit score.


What Goes Into a Credit Score?

what goes into a credit score infographic

1. Payment history

Making timely payments is important for your credit score, representing as much as 35% of your total FICO score. Missing one payment can have a negative impact on your credit score (though it shouldn’t ruin it entirely).

Why such a big impact? Lenders want to assess your ability to repay debts in a timely manner, meaning you pay what you agree to pay when you agree to pay it.

Do this consistently and over long periods of time and you will see your credit score increase.

Because of the outsized importance of this credit factor, staying on top of payment due dates and amounts becomes a necessity to build credit.

Keep track of when payments must go to creditors by setting up automatic payments where possible. Setting your bills on auto-pay can save not only time for individually initiating each payment, but also the headache of being late and dinging your credit score.

2. Total available credit / credit utilization ratio

Your credit usage, especially in relation to your available credit, also has a big impact on your credit rating, accounting for 30% of your score.

The metric used to measure this credit usage, called the credit utilization ratio, is calculated by dividing your outstanding revolving credit balances by your total available revolving credit balances. This ratio provides valuable insight to creditors about how you use credit. Lenders want to know how much credit you are using, especially in relation to how much credit is available to you.

A high credit utilization ratio (above 30%) will likely hurt your credit score, while a low one (below 20%) might help it or not have any effect at all on your credit rating.

3. Length of credit history

Lenders want to see how long you’ve had credit and how well you’ve handled that credit since it’s been open. This credit factor can determine 15% of your FICO score by evaluating the average age of your open lines of credit.

All things equal, longer average credit histories result in better credit scores.

4. Types of credit (diversity or mix of credit lines)

Not only do lenders care about your credit history and your ability to make timely payments (both huge credit factors), but they also like to see a diversity of good credit opportunities you’ve had in the past and maintain today.

Children won’t have many opportunities to have a wide array of credit lines, but they don’t need these just now. Instead, they can start with a single line of credit as an authorized user through a family member’s existing or new credit line.

If teenagers start building credit now, this new line of credit will still help them in the long run—so long as the account remains open.

5. Credit inquiries (new attempts to access credit)

Creditors also want to see how often you seek new credit. Going after financing regularly might indicate an increased risk because you constantly seek new forms of funds to stay afloat. Whether or not that’s actually the case, this can still serve as a red flag on your score, potentially hurting your credit if done too often.

These pulls on your credit, called hard inquiries, stay on your report for two years or longer, depending on the type of inquiry.

A child shouldn’t worry too much about this because any inquiry that hits their report now will likely fall off before they need it.

At this age, the child wants to establish credit and slowly build their credit limit through having smart credit use and a longer credit history.

A Smart Way to Approach Credit Cards for Kids

bank credit card approval process flow

Although children can get credit cards for kids early enough to build their credit, they can just as easily end up damaging it by using them irresponsibly.

Instead, you might consider getting the best of both worlds by instead getting them a kids debit card and adding them as an authorized user to your own credit card.

This way, they get the kids debit card to learn good financial habits without risking irresponsible spending while also benefiting by building good credit scores through being added as an authorized user to your credit card.

After all, as a general rule, minors can’t get credit cards under their own name. So, until they reach the age of majority in their state of residence, they really only have the option of being added as an authorized user on credit cards you hold in your own name.

With debit cards for kids, you can still get them into the practice of learning about credit cards while only having the exposure of a prepaid debit card.

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About the Author

Riley Adams is the Founder and CEO of Young and the Invested. He is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.

His work has appeared in major publications like Kiplinger, MarketWatch, MSN, TurboTax, Nasdaq, Yahoo! Finance, The Globe and Mail, and CNBC’s Acorns. Riley currently holds areas of expertise in investing, taxes, real estate, cryptocurrencies and personal finance where he has been cited as an authoritative source in outlets like CNBC, Time, NBC News, APM’s Marketplace, HuffPost, Business Insider, Slate, NerdWallet, Investopedia, The Balance and Fast Company.

Riley holds a Masters of Science in Applied Economics and Demography from Pennsylvania State University and a Bachelor of Arts in Economics and Bachelor of Science in Business Administration and Finance from Centenary College of Louisiana.