The Essential Guide to Giving Your Child Under 18 Their First Credit Card

Should you provide a credit card for your child under 18? This question troubles many parents navigating the intersection of financial responsibility and their teen’s growing independence. According to TransUnion, nearly 1 in 5 American teenagers between ages 13 and 17 now possess a credit card, and the majority use it at least once weekly. However, minors cannot legally hold their own credit card account—they must be authorized users on an adult’s account until reaching 18. Once that card enters your teen’s hands, significant spending power comes with it.

Deciding whether and when to issue a credit card for a child under 18 isn’t a one-size-fits-all answer. As Sandy Wheat, executive director of the North Carolina Council on Economic Education, explains: “It depends on your relationship with your child and how responsible your child is.” The decision requires careful consideration of both the benefits and serious risks involved.

Understanding the Real Risks: Two Critical Considerations

Before handing over plastic to a minor, parents must grapple with two fundamental realities that could reshape your financial landscape.

First, you bear full liability for your teenager’s charges. Imagine prom season arrives, and your teen charges an entire party bus rental using the new credit card. When his friends fail to reimburse him, and he’s already spent his work earnings on dining out, guess who covers that bill? You do—regardless of whether you authorized each transaction. This legal responsibility is absolute and unforgiving.

Second, your own credit score is directly at risk. If your daughter is supposed to reimburse you for charges she accumulated but forgets payment after payment, it won’t matter that her signature appears on every receipt. Your credit profile is what suffers. If balances spiral out of control and you can’t manage them, it’s your financial reputation that deteriorates rapidly. This isn’t a theoretical concern—it’s a practical reality that could affect your ability to secure loans, mortgages, or favorable interest rates for years to come.

Why Parents Choose Teen Credit Cards

Despite these risks, compelling reasons exist for providing a credit card for a child under 18. Understanding these motivations helps frame the decision constructively.

Some teenagers require financial access while away at boarding school or traveling frequently with sports teams or academic organizations. Others benefit from increased financial flexibility when parents frequently work out of town or maintain demanding office schedules. In these scenarios, immediate access to funds becomes practically necessary rather than merely convenient.

An authorized user credit card offers another significant advantage: it helps construct and establish a young person’s credit history. Early credit building can provide long-term financial benefits as they enter adulthood. Finally, some parents view this as an opportunity to teach the fundamentals of credit and financial responsibility while their teenager can still be required to listen and follow household rules. This teachable window—where parental authority still carries weight—offers a unique educational opportunity.

Building Financial Literacy: Essential Conversations Before Handing Over Plastic

The foundation for responsible credit use begins with education, not with the card itself.

Initiate comprehensive financial conversations early. If this represents your first money-related discussion with your teen, Susan Schroeder, an accredited financial counselor in St. Paul, Minnesota, urges caution: “You don’t discuss drugs once, and you don’t discuss sex once. Why should money be different?”

Your conversations should cover critical concepts your teenager must understand: how interest functions, what compound interest means, and all terminology associated with credit cards. Explore credit card glossaries designed for first-time users and student-focused credit education materials. Share your own financial history—not as judgment, but as instruction. Discuss how you’ve spent and saved, how you accumulated debt and struggled with it, or how you successfully repaid obligations. Personal narrative can be more persuasive than abstract principles.

Don’t assume your teenager grasps even basic credit fundamentals. MaryBeth Bailey, a financial educator in Bryant, Arkansas, notes that seventh-graders consistently fail to distinguish between credit and debit. Most 13- to 15-year-olds cannot articulate what a credit score is or why it matters. This knowledge gap is nearly universal among young people—it’s not an indictment of your child’s intelligence, but rather confirmation that financial literacy requires deliberate instruction.

Verify that your teen’s payment activity will be reported to credit bureaus. Otherwise, you assume all the risk while building none of your child’s credit profile. If the card company doesn’t report usage to bureaus, Schroeder poses a fundamental question: why pursue this strategy at all?

Protecting Both Your Credit and Theirs: Smart Safeguards for Under-18 Cardholders

Numerous protective mechanisms now exist to prevent a credit card for a child under 18 from becoming a financial disaster. Smart parents leverage these tools strategically.

Implement spending caps. American Express permits cardholders to establish spending limits on authorized users; at least one Visa product—the Costco Anywhere Visa by Citi—offers comparable functionality. These controls prevent your teenager from making charges you cannot absorb.

Explore specialized teen products. Visa, through Navy Federal Credit Union and TD Bank, offers Buxx—a prepaid card specifically designed for teenagers, which parents can reload directly from credit or debit cards or from checking accounts with a five- to seven-day processing delay. Note that most prepaid cards don’t report to credit bureaus, so this sacrifices credit-building benefits. DFCU Financial provides a credit card specifically for teenagers ages 14 to 17, featuring an initial $250 credit limit and a maximum of $1,000. Parents retain payment responsibility.

Deploy transaction monitoring applications. Apps like CardValet send immediate transaction alerts and allow parents to establish spending limits in real time, creating a safety net against unexpected charges.

Consider a secured card approach. With a secured card, you deposit collateral (perhaps $250) that becomes your teen’s credit line. The account remains in your name while your child operates as an authorized user, mirroring a regular card account but with reduced risk exposure.

Use the “drawer strategy.” If your sole objective is building your child’s credit history, simply add them as an authorized user—then store the physical card safely in a drawer where it remains unused. This produces credit-building benefits without active spending risk.

Start with minimal credit limits. At minimum, never add your teenager to an account carrying a high credit limit. Instead, place them on a card with a restrictive limit—what Wheat recommends as “a spending cap she can’t exceed with charges you can actually repay.”

Setting Boundaries and Monitoring Spending: The Do’s and Don’ts in Practice

Clear boundaries established before the card enters your teen’s possession prevent conflicts and confusion later.

Define permitted spending categories in advance. If the card is intended for everyday purchases, Bailey advises discussing exactly what charges are allowed and what are prohibited before handing over the card. This creates mutual understanding and reduces disputes.

Clarify emergency definitions. “Emergency only?” requires its own dedicated discussion. What constitutes an emergency to your 16-year-old might not match your definition. Your son might consider concert tickets a crisis. Consider requiring your teenager to call you before using the card for non-routine expenses, though this isn’t always feasible in urgent moments. Guidelines work better—advance permission for vehicle towing, urgent care clinic visits, or hospital charges in genuine medical emergencies.

Establish and maintain verification protocols. Trust, but verify. If this card extends beyond emergency use, schedule regular reviews of charges. Begin weekly, and if your teenager demonstrates consistent responsibility, transition to monthly reviews. Bailey suggests that if you harbor concerns about your teen’s honesty, require receipts for every item appearing on the bill.

Intervene decisively if spending escalates. This isn’t the moment to practice hands-off parenting, according to Laura Levine, CEO of the Jump$tart Coalition for Personal Financial Literacy. While credit competency develops through card usage experience, “the card itself isn’t going to teach it,” Levine emphasizes. Active parental engagement remains essential.

Monitor physical card security. Kids lose belongings constantly—why should a credit card be different? Make clear that if your teenager discovers the card is missing, reporting it immediately (rather than hiding the loss to avoid trouble) allows you to freeze the account quickly. Bailey advises explaining the consequences: “If the card is lost and someone dishonest finds it, they can rapidly accumulate unauthorized charges.”

Don’t Proceed If Your Own Financial House Isn’t Stable

Avoid this strategy if you’re personally struggling with credit card debt. Perhaps you want better financial circumstances for your children than you experienced. But remember—any mistakes they make now will only compound your existing obligations. Schroeder’s advice is direct: “Don’t consider this as an option unless your own financial house is in order.”

Making It Clear: Credit Cards Are a Privilege, Not a Right

Providing a credit card for a child under 18 represents a genuine risk, and your teenager could disappoint you. Prepare psychologically to remove the card—temporarily or permanently—if they violate your trust. Financial maturity emerges at different ages for different people. Some teenagers demonstrate responsibility immediately; others require years to develop it.

Be explicit that the card is earned privilege, not a birthright. This framing transforms the credit card from a mere financial tool into a trust-building instrument. When used thoughtfully, with clear boundaries and active oversight, a credit card can become the classroom where your teenager learns lessons that shape their financial life for decades to come.