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As my kids get older and turn 18, it’s time for her to start signing up for credit cards. She’s got to start pulling her weight getting those miles and points for family trips, after all! I mean we’ve been lugging her around for free for 18 years!!!! 🙂
The CARD Act of 2009 says that she has to have independent income or a cosigner to get a card before she turns 21, so in a way we still control her credit for a few years. Because she is currently still living at home, we still have a modicum of control over her credit cards and credit history, and are attempting to help teach her good financial habits as well as set her up with a good credit score / history as she starts out in life.
My daughter’s first credit card
Well, before she ever applied for her first credit card on her own, my wife and I have been adding her (and her siblings) to some of our cards as authorized users. The goal with that was to help her build up her own credit history and score. By making on-time payments, even as an authorized user, the idea was to make it easier for her to apply for her own credit cards once she turned 18.
I was actually a bit behind on things and didn’t have a plan in place to have her apply for her first card directly on her 18th birthday (like I would if I were a GOOD travel blogger dad 😀 ), but recently she applied for the Bank of America® Cash Rewards Credit Card for Students (not an affiliate link). The card gives
- 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
- 2% cash back at grocery stores and wholesale clubs
- and a $200 welcome bonus after spending $500 on the card
She was approved and received her bonus.
Plans for her next credit card
Fast forward a few months and it was time for her to apply for a new card. I wanted to get another basic card that had decent benefits. I knew with her limited credit history and income that she wouldn’t be likely approved for a card like the Chase Sapphire Preferred, so I wanted to keep things basic.
I also wanted to get a card with no annual fee, with the idea that this could be one that she could have and keep for a long time, providing her with an ever-increasing average age of accounts, which is one of the big factors in determining your credit score. I wasn’t sure how her history had impacted her credit score, so I checked it out before applying
Dang – she’s got a higher credit score than me! After considering a few other cards, I ended up deciding to have her apply for the Chase Freedom Unlimited card (refer a friend affiliate link).
The dreaded decline message
After filling out the Freedom Unlimited, I unfortunately got the immediate 7-10 day decline message :-(. I will wait for the official letter in the mail with the decline reason, but after looking around, I’m guessing her income was not high enough and/or she didn’t have enough of a credit history of credit on her own. I probably should have researched that a bit better before applying…. Depending on what they say, I may consider co-signing the card for her. I am generally against parents cosigning for their kids, but some of the unique situations in her particular situation may make that a reasonable option.
We will regroup and apply for something else, probably another “student” card in order to help continue to build up her credit score and history of on-time payments.
What are some of your favorite cards for 18-21 year olds? Leave them in the comments!
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