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I have six children, ranging from ages eight to 20. We homeschool most of our kids, and have always incorporated personal finance topics into our curriculum.
As our kids have gotten older, we added them as authorized users to our own credit cards in order to help build their credit. But even though they have authorized user cards in their name, we chose not to actually give our teenage kids their own debit or credit cards. Instead, we’ve taught them how the credit card system works and the pitfalls to avoid.
Now that two of my children are officially and legally adults, however, we’ve signed them up for credit cards in their own name.
Choosing credit cards for my newly adult children
Since the passing of the Credit CARD Act of 2009, adults under the age of 21 must show either independent income or get a co-signer in order to get a credit card. I always tell my children that I own their credit until they are 21. It’s my hope that I will be able to set them with solid credit as they begin their own life. What they do after that is up to them but at least I’ll know that I did the best I can.
My two adult children both have real but limited income, one from a part-time job and one from Social Security disability benefits. My wife and I both wanted to avoid co-signing on a credit card if at all possible. We looked through some of the best cards for students, but wanted to get one with a decent bonus if at all possible.
I knew that they wouldn’t be approved for a premium card like the Chase Sapphire Preferred® Card or American Express® Gold Card, but many of the student credit cards have limited or no rewards. Another factor that was important to us was that the card have no annual fee. Because the average age of all of your credit accounts is an important factor in determining your credit score, we wanted a card that they could keep for the long run.
Bank of America Cash Rewards
The first card that we decided on was the Bank of America® Cash Rewards credit card. The Bank of America Cash Rewards card currently offers a welcome bonus of $200 after spending $1,000 on the card in the first three months of having the card.
With this card, you will get 3% cash back in one category. You can choose either gas, online shopping, dining, travel, drug stores, or home improvement/furnishings, and you can change your category each month. You also get 2% cash back at grocery stores and wholesale clubs. The 2% and 3% cash back bonus is limited to the first $2,500 in combined spending each quarter. You also earn 1% cash back on all other purchases.
Both my son and daughter were approved for the Bank of America® Cash Rewards credit card. They both met the spending requirement (with a little help from mom and dad) and received their $200 welcome bonus.
Regular APR
13.99% – 23.99% variable
Intro APR
0% for 15 billing cycles
American Express Cash Magnet card
The next card that we applied for was the American Express Cash Magnet® Card. The American Express Cash Magnet card earns an unlimited 1.5% cash back on all purchases, and currently comes with a welcome offer of $150 back after you spend $1,000 in purchases in the first three months of having the card.
There are other cash-back cards that offer more cash back with no annual fee, but for someone with a limited credit profile, the $150 welcome bonus is nice. My daughter was approved but when my son went to apply for that, he was not approved. They have similar credit scores and credit profiles, so I’m not sure what the reasoning was.
We also applied for the Chase Freedom Unlimited® for my daughter and were denied, even though she has excellent credit (a score in the high 700s). I saw somewhere that Chase wants you to have at least a year of credit history before it will approve you for the Freedom Unlimited, so we may try again a little bit later.
Regular APR
15.74%-24.74% Variable
Credit Score
Good to Excellent
Featured Reward
$150 back after you spend $1,000 in purchases on your new Card in your first 3 months
- Earn a $150 statement credit after you spend $1,000 or more in purchases with your new Card within the first 3 months of Card Membership.
- Unlimited 1.5% Cash Back on your purchases.
- Low intro APR: 0% for 15 months on purchases from the date of account opening, then a variable rate, currently 13.99% to 23.99%.
- Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee and no interest.
- Amex Offers rewards you at places you like to shop, dine, travel, and more. You can add as many Offers as you’d like to your Card, then just use that Card to pay, and enjoy rewards directly on your statement.
- Cash Back is received in the form of Reward Dollars that can be redeemed for statement credits.
- No Annual Fee.
- Terms Apply.
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Please note: While the offers mentioned above are accurate at the time of publication, they’re subject to change at any time and may have changed, or may no longer be available.
For rates and fees of the American Express® Gold Card, please click here.
For rates and fees of the American Express Cash Magnet® Card, please click here.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
