Making Teen an Authorized User on CC

[veraletta]

I did this with all three of my children and would never do it again.
All three of my children worked at the age of 16 and had saving account which
they seemed to be responsible with.
I found out the hard way that a credit card was too easy for them to charge anything they wanted.
The oldest was responsible but the other two were not.
middle child even graduated at the age of 17 and went to college while in high school. In one month she charged almost 2k on my credit card, which when the bill came in I did make her pay it all off and took charge card away.
So lesson learned, so I thought, I waited until my youngest was out of high school and was working, a full time job.

He was just like his sister and over charged but took him a few years, so took him off my credit card. Well because he was on my credit card for some time, he was able to open three credit cards in his own name. Which he ended up charging over 14k.

He is now in the Air Force and paying them all off. I think some people can do good with credit cards, while other seems to buy everything and end up owing a lot of credit debt. While it is a good way for them to built up their credit, down side is that it sometime teaching them they don't have to wait and save for the things they want.

 

[cornflake]

No, actually you're the only one who said that. The one other person who mentioned it said that if I'm worried about her getting the correct change from a cashier....... NOT that I said I was worried about her not giving me the correct change.

I subsequently explained: three stores, three cards.

I asked for advice/opinions, not for someone to completely misunderstand my post and then make some asinine accusation against my daughter:

If you're worried about her ability to shop independently to this extent, again - that she can't get the correct change/won't know what the correct change is/won't look/etc., won't shop for different things unless she's only given three store cards, otherwise she'd just buy everything in one place, etc., etc. - perhaps she's not ready to be allowed to shop on her own.

Also... opinion doesn't mean 'people to agree with me.'

 

[minnie1928]

As Tink-aholic said, your child will also start to develop a credit file and that will be very helpful when they apply for their first card on their own. We have a USAA cc and they encouraged us put DD on the acount as an authorized user. Between that, and our DD's teen checking account, she should be in good shape credit wise when she goes out on her own in life (from a credit standpoint).

Being an authorized user no longer builds credit for that person. Years ago, yes...but within the past few years they changed that. I believe it had to do with the fact that an authorized user is not actually responsible for the debt, the primary cardholder is and that is who earns the credit history.

Also, while having a checking account will provide some history for opening another deposit account (if the bank reports to Chexsystems or a similar program), it won't provide any credit history. Quite simply, credit is not involved in a checking account so there's no credit history to report.

Personally, to the OPs original question...I don't see what the big deal is. If she trusts her daughter, then let her use the cards. However, I wouldn't necessarily assume that she'll need 3 separate cards at 3 separate stores to get what she wants. What if the first 2 stores don't really have anything? Then she's stuck with $100 at store #3. I would either give her the cash or a prepaid visa card. She could lose either one and she could be overcharged (the equivalent of getting incorrect change) on either one. Now, that I think about it...I think I would just go cash/prepaid. It's less hassle than having her added to your store credit cards and if the store cards were lost that could open a whole other can of worms.

 

[Tink-aholic]

Being an authorized user no longer builds credit for that person. Years ago, yes...but within the past few years they changed that. I believe it had to do with the fact that an authorized user is not actually responsible for the debt, the primary cardholder is and that is who earns the credit history.Also, while having a checking account will provide some history for opening another deposit account (if the bank reports to Chexsystems or a similar program), it won't provide any credit history. Quite simply, credit is not involved in a checking account so there's no credit history to report.

Personally, to the OPs original question...I don't see what the big deal is. If she trusts her daughter, then let her use the cards. However, I wouldn't necessarily assume that she'll need 3 separate cards at 3 separate stores to get what she wants. What if the first 2 stores don't really have anything? Then she's stuck with $100 at store #3. I would either give her the cash or a prepaid visa card. She could lose either one and she could be overcharged (the equivalent of getting incorrect change) on either one. Now, that I think about it...I think I would just go cash/prepaid. It's less hassle than having her added to your store credit cards and if the store cards were lost that could open a whole other can of worms.

Bank of America credit cards allowed me to include my DS's SS# so that he is building credit. It cuts both ways, though -- if I were to default, then it would hurt him, too. But that won't happen because I pay it off every month.

 

[minnie1928]

Bank of America credit cards allowed me to include my DS's SS# so that he is building credit. It cuts both ways, though -- if I were to default, then it would hurt him, too. But that won't happen because I pay it off every month.

In that circumstance he's not an "authorized user" he's a co-owner on the account. He's as liable as you are.

 

[ZehnJahren]

While I understand your point of view, OP, I think giving your daughter access to your credit card when you can't even trust her to get back exact change is probably not the best idea.

If you have such unscrupulous characters working at the shops around you that they might short her by $20 or $30 when she uses cash to pay for her items, imagine how they could trick her when she's using a credit card. Further, she's no more likely to keep a close eye on a card than she is on cash. It can be dropped or forgotten just as easily.

I would think, in this case, either cash (which she should be able to handle at her age, and if she cannot then the consequences would be an excellent learning tool) or a prepaid debit card (with the ability to cancel it if she does drop or lose it) would be the best choices for you.

 

[NYCDiane]

Lots of great answers and advice here. I like that prepaid AmEx in her name. That's something I'm thinking of.

I might just do this: give her the cards (or the prepaid AmEx), go with her to the store (much as I don't want to ) and kind of "guide" her with the card, etc and see how she does. I've already sent her into my bank's ATM with my card to get money (after teaching her) and she did fine with that (made sure to take the card, receipt and money!). I guess I'll teach her how to use cards, too.

She's responsible, though, and I'm sure she'll be fine after I teach her at one or two stores.

 

[NYCDiane]

In that circumstance he's not an "authorized user" he's a co-owner on the account. He's as liable as you are.

Absolutely. If you ever become delinquent on that account, he is just as responsible for it and they will go after him.

 

[pigletto]

My first response was "OMG NO!!".
Then I read the responses and really thought about it. My dd is going to be 15, saves her own money very responsibly, and is extremely trustworthy in all other aspects.
It's just that she's still a kid in many ways, and does many kid things like losing her exam card and me having to rush it to her the other day. Printing out her homework assignment and walking out the door without it, a room that looks like a bomb went off.
I trust her, but to me credit cards aren't somewhere I want to go with her right now. It doesn't seem all that necessary I suppose. I go shopping with her, or give her some cash. She rarely does all of it at once anyway.

I am not sure why I feel so strongly against it, I just don't think we're there yet. To me, allowing her to use my credit card is for when she's driving and has a job beyond babysitting and is a few years older.

 

[cornflake]

My first response was "OMG NO!!".
Then I read the responses and really thought about it. My dd is going to be 15, saves her own money very responsibly, and is extremely trustworthy in all other aspects.
It's just that she's still a kid in many ways, and does many kid things like losing her exam card and me having to rush it to her the other day. Printing out her homework assignment and walking out the door without it, a room that looks like a bomb went off.
I trust her, but to me credit cards aren't somewhere I want to go with her right now. It doesn't seem all that necessary I suppose. I go shopping with her, or give her some cash. She rarely does all of it at once anyway.

I am not sure why I feel so strongly against it, I just don't think we're there yet. To me, allowing her to use my credit card is for when she's driving and has a job beyond babysitting and is a few years older.

I think it probably depends on lifestyle and the kid. I was out all the time by myself and shopping by myself for all sorts of things, as were most of my friends by the time we started h.s., so it was just simpler to give out a parental cc. Most of my friends had one - both for the authorized purchases like clothes or haircuts and for 'pick up X at the market.'

If that's not your kid, then it's less necessary. I will say the room and stuff I don't think are necessarily connected. If she's not trustworthy with cash, like if she forgets that or messes up, then I'd be wary but I know plenty of kids with cyclone rooms who are all 'oooh, forgot my notebook' who still don't mess up monetary transactions - same as they might forget to load the dishwasher but wouldn't forget to feed their sibling, they know what's serious. If they'd forget to feed the sibling, perhaps not ready!

 

[mistysue]

I had a friend in high school whose parents gave her a credit card. She was ALWAYS responsible about it- until a couple years after she got it, that one day when she went into a pet store and bought me a cat as a present. A non-returnable $300 cat.

She couldn't have it because of allergies, my parents didn't agree to it, it's not like they could make my parents pay them back- she bought it as a gift. They just had a $300 cc bill and the girl had no job, so no way to repay them the money.

Nearly every person with a cc will eventually do something irresponsible like this, even if it's buying her friend some new jeans because the friend can't get them. If you hand out a credit card, I would just be prepared for it. Even adults will eventually do something irresponsible. (for all the budget boarders who always jump in to say they've never been irresponsible, you are NOT the average person)

 

[NYCDiane]

Nearly every person with a cc will eventually do something irresponsible like this, even if it's buying her friend some new jeans because the friend can't get them. If you hand out a credit card, I would just be prepared for it. Even adults will eventually do something irresponsible. (for all the budget boarders who always jump in to say they've never been irresponsible, you are NOT the average person)

I know I have!!! (and for those who CLAIM they never have ---- okay, we believe you! )

LOL!

 

[pigletto]

I think it probably depends on lifestyle and the kid. I was out all the time by myself and shopping by myself for all sorts of things, as were most of my friends by the time we started h.s., so it was just simpler to give out a parental cc. Most of my friends had one - both for the authorized purchases like clothes or haircuts and for 'pick up X at the market.'

If that's not your kid, then it's less necessary. I will say the room and stuff I don't think are necessarily connected. If she's not trustworthy with cash, like if she forgets that or messes up, then I'd be wary but I know plenty of kids with cyclone rooms who are all 'oooh, forgot my notebook' who still don't mess up monetary transactions - same as they might forget to load the dishwasher but wouldn't forget to feed their sibling, they know what's serious. If they'd forget to feed the sibling, perhaps not ready!

You are right. It really does depend on the lifestyle of the kid in question too. We're in a somewhat rural area, so shopping trips always involve a parent driver for one. For two, she wears a uniform and is still pretty content to let me buy most of her weekend clothes. It's gotten to the point where we look online together and she says "Yes" or "No" but we end up ordering most of it. So I guess it just hasn't come up.

She's thinking of a few international school trips during high school. One to Italy, for example. I can totally see allowing her use of my credit card for that. I guess it just really hasn't come up for us. Her friends have their own money usually from part time jobs and they mostly hang out at each others houses.

Sorry to take over your thread OP. It's not that I think it's inherently wrong, I had just really never considered it at all because nobody she knows does it.

I would say in your case that either she's responsible enough to have use of the card or she's not. I would probably think twice if I had to jump through hoops like 3 different cards and misleading her about the limits. When she's ready she should be all ready IMO.

 

[iheartpeterpan]

When my son turned 16 I put him as an additional on one of my CCs, so that he would have a card with his own name on it to buy gas, or other things I sent him to buy. He is responsible andI trust him. He also knows that he will be one dead duck if he ever uses it for something that he's not supposed to. It depends on the kid, I suppose. He has never charged anything to it that he wasn't supposed to, so it works for us. He also has his own checking account, which he manages on his own with his own money, and his own debit card tied to his checking account - which he uses for his personal expenses.

I think it's very important for kids to have these experiences while they are still in my house and I can still guide them - rather than have no clue about personal finance and be thrown into it after they leave. Which happens far too often IMO.