A credit card for a 7 year old???

[Shugardrawers]

From MSN Money. I thought it was up to the individual to establish their own credit, not use mommy and daddy's for their own gain. Besides, the kid can barely add and subtract and they want him to have a credit card?? How will he prove his identity if the store wants to see his ID?

Q: My wife and I both have good credit scores (708 and 734) and are considering putting our 7-year-old son on a credit-card account as an authorized user so that he can start establishing his credit profile now. My question is, am I allowed to put him, at age 7, on the account as an authorized user? If not, how soon can I start establishing credit for him?

A: In general, minors aren't allowed to enter into contracts creating a financial obligation, but since, as an authorized user on your credit card, he doesn't have a financial obligation to repay the card balance, I don't see any reason why he can't be listed on your account as an authorized user.

When a married couple has one spouse on a credit-card account as an authorized user, the credit-card company must provide the account payment history on the authorized user's credit report. The card company is under no obligation to do so when the authorized user isn't a spouse, so you'd want to confirm that the card provider will provide that payment history for your son.

A good credit score provides the means to an end -- being able to borrow to finance assets at attractive interest rates. The pervasive use of personal credit histories to make inferences on employment, renting and insurance decisions makes managing your credit score an important aspect of financial management. But it's easy to get too wrapped up in managing your credit score.

Just because you can do it doesn't mean you should do it. Your son is over a decade away from being able to apply for credit on his own. There's no need to start building a history at age 7.

My counsel is for you to hold this idea in abeyance for the next six to eight years.

 

[NikiM20]

Yep, Thats just what my 7 yr old needs, a credit card. I would have a million $$$$ in JUNK showing up at my door

 

[Good Ol Gal]

Disney Visa tried to give me 8 MONTH old a credit card!!

When I called about it I told them he didn't want one, but I'd take one.... they said "No, this is only for xxxx!"

somethings are just ridiculous.

 

[Toby'sFriend]

yea wait 6 years, because when he's 13, he'll REALLY need one.

 

[Tigger&Belle]

And I poo-pooed my 6yo when he wanted an e-mail account. Little did I know he should be establishing credit!

 

[eddad]

Might as well put him on the mortgage/title to the house next it's a better way to build credit,then he can take out an equity line for that Big Wheel he's had his eye on

 

[Southern4sure]

And I poo-pooed my 6yo when he wanted an e-mail account. Little did I know he should be establishing credit!

 

[jekajekalynn]

I thought I heard about doing this on the Suzy Orman show.


A parent will get a child a credit card, and the parent will run about 100 bucks on it and pay it off fast , and maybe even apply for a couple of lines credit in the childs name from when they are real young to when they are teens. By the time they are in their late teens when they graduate highschool and go to college, they have good established credit.

Of course I could be wrong.

 

[Tracey1974]

That is ridiculous- what child needs to establish credit at age 7? Cel phones maybe for 7 year olds (if they are the ones geared to them) but credit cards? No way!

 

[DukeStreetKing]

Might as well put him on the mortgage/title to the house next it's a better way to build credit,then he can take out an equity line for that Big Wheel he's had his eye on

Yeah, that big one at Pop Century!

 

[Shugardrawers]

Here's an idea. A real off the wall idea I know. How about they let the kid wait until he's 16-18, start with a checking account and slowly build his OWN credit like everyone else? That way the lenders have a much more accurate idea of whether HE'LL actually pay the debt as promised. And he'll be far more responsible about it when he actually has to work for it. Or is the concept of earning things yourself just hopelessly old fashioned?

 

[TheOtherVillainess]

I am not the least bit suprised by this. I have seen kids as young as 10-11 years old with their own credit cards before. I would ask to see I.D. and the kid would hand me their school I.D. card.

That's putting WAY too much power into a child's hands, IMO. Unless it's one of those cards that is a credit card in name only and is tied directly to a bank account of some kind (I think Visa did this it was called a Visa Blast or something..aimed directly at kids).

TOV

 

[LadyBears]

I read somewhere - I don't remember where - that some financial experts are in a way recommending to do this. This way, the child is on record now to help prevent identity theft later. There have been incidences where an 18 y/o tries to get credit, only to find out that someone has been using their info for years! They end up having a hard time trying to prove who they are.



So - I can see the point to establish identity, but establishing credit?? Unless the child is one of those baby genius' who will be attending college at the age of 12 - I don't see the need. I can't see myself doing this for my DD, but if I did for the sake of identity - I would not even let my DD know she had a credit card. I would destroy her card as soon as I got it.