Get a Visa Credit Card for Your Kid

It's important to help your child get a good financial education. Part of that education includes how to establish a credit history and using credit responsibly. FICO has restricted the use of "piggybacking" – allowing another person to become an authorized user on your credit card – as a primary way of building credit. It's still possible to help your child get a Visa credit card, but some strategies can take a bit longer than securing one for yourself.

Steps

Obtaining a Bank Credit Card

1. Shop around for the best Visa credit card offer. Getting a credit card is just like shopping for anything else. You want the best deal.
   • Start by looking for cards with the lowest interest rate. The interest rate is effectively the "price" of the money that your child will be borrowing. The lower, the better.
   • Also consider credit limit. It may be the case that a credit card with a low-interest rate also has an unacceptably low credit limit. Look for a card that strikes the right balance.
   • Keep in mind that some banks might require your child to have an account with the bank before offering a credit card. Decide on whether you think it's worth it for your child to open an account just to get a Visa card.
2. Consider co-signing for the credit card. If you have excellent credit, you might give your child a good shot at getting a Visa card by co-signing for it. Of course, you'll be responsible if your child doesn't pay the amount that's due every month. You already know if your child has good character, so decide if you want to assume the risk accordingly.
   • Keep in mind that not all credit card issuers allow for co-signers.
3. Help your child apply for the credit card. Once you've found what you think is the best deal, you should assist your child in applying for the credit card. Since it's a first-time experience, your son or daughter will undoubtedly have questions.
4. Prepare for rejection. It's often the case that younger people who apply for a credit card for the first time are rejected. Usually, that's because there's not enough credit history, even after following the steps above. Reassure your child that rejection is common for young people and move on to another offer.
5. Reinforce good money management practices. If the card is approved, remind your child about the importance of maintaining a good credit history if he or she ever wants to buy a house or a new car. Let your child know that it's important to pay credit card bills on time all the time.

Obtaining a Secured Credit Card

1. Locate a company that offers secured Visa credit cards. Not every company offers secured credit cards. You'll have to find one that does. Bankrate has a list of companies that offer secured credit cards.
   • Although your choices are limited, you should still try to find a company that doesn't charge you an application fee.
2. Gather the money for the deposit. Secured credit cards, by definition, will require an up-front deposit. That's the money that the credit card money will keep in the event that the cardholder doesn't pay back the money that's owed. It's important that you gather the money that you'll need for the initial deposit.
3. Help your child apply for a secured credit card before applying for an unsecured credit card. Cardweb.com educates new credit users on credit cards, applying for cards, making the monthly payments and developing a good credit history. The website also gives information on secured credit cards and how to apply for a secured credit card.
   • If your child is able to establish a good credit history with a secured Visa credit card, he or she can request that the card account be upgraded to an unsecured status, which may also result in a lower interest rate and an increased credit limit.

Getting a Store or Gasoline Credit Card

1. Go to a chain department store and sign your child up for a store credit card with a low limit. Explain to your child that he or she must pay the balance off in full every month, so it's important to keep the balance low.
   • Helping your child to establish credit with a store credit card first is an important small step before helping him or her obtain approval for a Visa credit card from a bank.
2. Establish credit with a gasoline credit card from Shell, Exxon or another energy company. Energy companies open accounts for customers who have no credit history. The credit limit on a gasoline credit card is low, but it's a great way to build credit history.
3. Advise your child to use the card to save money. Sometimes, energy companies or retail stores will offer promotions specifically for people who use their credit cards. Advise your child to take advantage of those promotions as a way to both save money and build credit at the same time.

Getting a Small Personal Loan

1. Locate a bank that has liberal lending policies. You can usually shop around by phone for banks in your area that are willing to loan small amounts of money However, many banks do not offer small consumer loans at all. Shop for small consumer loans from credit unions or savings and loans institutions.
   • Ideally, you want an unsecured loan. That's a loan supported only by the borrower's creditworthiness. However, you might have trouble finding that type of loan for your child. Instead, you may have to offer up some collateral.
2. Instruct your child to apply for a small ($500) loan that he or she repays fairly soon. The idea here is to just build a credit history. You want credit card companies to look at the credit report of your child and see that he or she has already paid back a loan.
   • This credit-building step should be restricted to children who are over the age of 18 since they are required to sign a contract.
3. Advise your child to make monthly payments on time. The creditor reports the payment history to the three credit bureaus, which shows up on your child's credit history.

Tips

• Your bank or credit union may be more receptive to issuing credit to your child if you have a good banking history, no history of bounced checks and a stable job.

Warnings

• Be very careful making the decision to give him or her access to your credit rating. Your credit history is negatively affected if he or she misses monthly payments or makes monthly payments late.
• Store credit cards come with high-interest rates.

Related Articles

• Build a Credit History with American Express

Sources and Citations

See also

• Apply for an American Express Credit Card
• Get a Debit Card
• Get a Credit Card when You Have a Low Income
• Apply for a Best Buy Credit Card
• Obtain a PayPal Debit Card
• Get a Business Credit Card With Bad Credit
• Get a Credit Card Without a Job
• Apply for a Chase Credit Card
• Apply for an SBI Credit Card
• Get an American Express Platinum Card

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