What Credit Card can a High School Student Get?

Modern teens are getting more and more independent, regardless of what their parents say about it. If you read all the stories about young IT geeks or teen pop stars driving in a self-earned Ferrari, you can get a sense of what a benchmark to a youngster is.

Plastic means of payments are not limited to classic credit cards – there are many more, including prepaid cards, debit cards, secured credit cards, and all different electronic payment systems – Bitcoin, Apple Pay, PayPal, and Starbucks Mobile Wallet, to mention a few.

Under the Credit Card Act of 2009 provisions, there are a lot of limitations and protections added to save a young person from the dangers of modern personal finances.

If you are under 18, these are your options to get a card:

Prepaid card

It is an obvious choice – with all these Justin Beiber advertised prepaid cards, teens are well aware of this option.

Pros of the prepaid card: it is simple, doesn’t require a credit check, and protects you from overspending (in a sense that it doesn’t generally allow you to spend more than you have on your account unlike credit cards).

Cons are important to mention too:

  • High fees. Because prepaid cards are not covered by the CARD Act, there is no limit on banks’ creativity to charge different fees.
  • Doesn’t help to build a person’s credit history.
  • Are less protected from fraud charges than credit cards, which have zero liability policy.

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Parents’ credit cards

Parents can issue an additional card on their credit card account and authorize a kid to use it within specified limitations. Certain limitations can be set up – daily cash limit or daily transaction limit and more.

All payments are the privilege of the primary cardholder (usually a parent) while the teen does the hard job of spending money on a card.

Minimum age for an additional cardholder depends on a credit card issuer and sometimes can be even as low as 10 years.

Credit cards

After the CARD Act of 2009, nobody can get a credit card before their eighteenth birthday. Therefore, no teen can have his own real credit card.

Debit cards

Teens can get a checking account with or without a direct deposit and a debit card attached to it.  A teen under 18 needs to bring a parent to sign papers at the bank.

There are good no fee checking account offers (Capital One 360 for example) that will serve you better than a prepaid card and do not charge extensive fees.

There are many debit offers designed specifically for teens. For example:

  • PayPal Student Account – works for teens 13 and older and is linked to a parent’s account
  • PAYjr Buxx Card – for children of 13 and older, usage fees apply.

Whatever will be you and your children’s choice, it is always important to talk to your kids on the responsibility and risks involved in financial transactions.

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