A teen's first credit card

Credit scores follow you for life, and the length of your credit history is one of the factors that determines your score. A teen who starts building credit at 16 has a meaningful advantage over someone who waits until 22. But there's a right way and a wrong way to do this, and the wrong way can create problems that take years to fix.

Option 1: Authorized user (ages 15+)

A parent adds the teen to their existing credit card. The teen gets a card with their name on it, and the account's entire history gets added to the teen's credit report. If the parent has a card with 10 years of on-time payments, the teen instantly inherits that history. The parent remains responsible for all charges and can set spending limits through most card issuers. This is the fastest way to give a teen a strong credit score by age 18.

Option 2: Student or secured card (ages 18+)

At 18, a teen can apply for their own card. A secured card requires a deposit (typically $200–500) that becomes the credit limit. A student card is an unsecured card with a low limit ($500–1,000) designed for people with thin credit files. Either works. The goal is on-time payments and low utilization, not rewards or perks.

The rules

1. Never carry a balance. Pay the statement in full every month. Credit card interest rates are 20–30% — there is no investment that reliably returns that, so carrying a balance is always a net loss.
2. Keep utilization under 30%. If your limit is $1,000, never have more than $300 on the card at any time. Under 10% is even better for your score.
3. Set up autopay for the full statement balance. Human memory is not reliable enough for something that affects your credit score for seven years.
4. Don't close old cards. Length of credit history matters. Even if you stop using a card, keep it open (assuming no annual fee).
5. Check your credit report at annualcreditreport.com once a year. Errors happen and can cost you thousands in higher interest rates if uncaught.