The Best Credit Card to Get for a Teenager That Doesn't Have Any Credit
Once a teenager turns 18, she can begin establishing a good credit history with a credit card. A good credit report will help the young adult show lenders her financial standing and history when she is ready to make future large purchases, like a car or home. Building good credit from scratch is not necessarily a hard feat, but it can take time.
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Store Credit Card
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A teen who does not have any credit is more likely to get approved for a credit card through a retailer than a major credit card company. With a store credit card, a teen will only be able to use the card exclusively for purchases made from the retailer, which can help control spending. If a teen does not pay the balance in full, he could get charged with high interest rates. However, a store credit card, when used responsibly, is a good way to start building credit.
Student Credit Card
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A teen who is enrolled in any form of post-secondary education may qualify to receive a student credit card through a major credit card company, despite her lack of credit. A school's resource center or the bulletin boards in common areas may have applications for student credit cards. These types of credit cards generally have low credit limits. Consequently, they are best for emergencies or for small purchases that the student can pay in full when the credit card bill arrives to start building a good credit history.
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Bank Credit Card
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Banks and credit unions often have special checking accounts for teens enrolled in college that allow the young person to open an account with a smaller amount of money than generally required of new customers. Over time, the financial institution may begin offering the teen credit card offers if it sees that he is a responsible spender.
Parent's Credit Card
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A parent can add a teen who is old enough as joint account holder on one of her own credit cards, a technique called "piggybacking." However, this method of gaining credit is only effective if a parent has a good credit history because, in a piggyback situation, a parent's delinquency can reflect poorly on a teen's credit report. Alternatively, irresponsible spending and delinquent credit card payments on a teen's part can reflect negatively on a parent's credit report. Piggybacking is a good way for a teen who does not have credit to get a credit card if his parent has a good credit history and they both have responsible spending habits.
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References
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