If you (or the adults in your life) feel like age 18 is too young to get a credit card, you’re not alone. Credit cards can be risky, especially for young people who don’t know how they work.
Some people run up too much credit card debt, which they can struggle to pay off. Having too much credit card debt can even lead to declaring bankruptcy, which can make it harder to get approved for auto loans or mortgages for several years into the future.
But here are a few good things about credit cards:
- They can help you build credit history and increase your FICO® Score.
- They can offer travel rewards, cash back, and other useful perks.
- They give you a convenient way to pay for the purchases you need now, with a flexible way to manage your month-to-month cash flow.
I personally will encourage my children to get their first credit cards at age 18. Here are a few reasons why age 18 is not too soon for a credit card.
1. Getting your first credit card helps you build credit
Having a good credit score is a huge advantage in life. If you can start at a young age with opening your first credit card and establishing credit history, this can help you save thousands of dollars on borrowing costs for the rest of your life.
If you can manage your credit card responsibly without making late payments or racking up credit card debt, your credit card usage will become part of your credit report.
The on-time payments you make today with your credit card at age 18 can help you qualify for lower-interest loans down the road when you’re ready to apply for an auto loan or buy a house. Your future self will thank you!
2. The best credit cards offer rewards
Many 18-year-olds don’t have much money in the bank. Especially if you’re a college student, you’re probably not earning much income, even if you have a part-time job. That means every dollar counts.
Some of the best credit cards for students can help you earn valuable credit card rewards, like a percentage of cash back on everyday purchases like gas and groceries, or travel reward points that you can use to book cheap flights and free hotels.
You’re already spending money everyday on restaurants, groceries, ride-hailing apps, and more. Why not get some money back or get fun extra rewards? Some credit cards are specially designed for the spending patterns and lifestyles of young people — and you don’t need to have perfect credit to apply.
3. Credit cards can be risky, but financial education can help
Sometimes young people get in over their heads with too much credit card debt. They don’t understand how credit card interest (APR) works, or they don’t keep track of the due dates for their credit card bills, and they get into financial trouble.
But this doesn’t have to happen to you! Just the fact that you’re reading this article shows that you’re interested in financial literacy and you’re trying to learn about how to use credit cards the right way. If you avoid spending too much on your credit cards, and if you pay off the balance in full each month, you will not get into credit card debt.
Instead, you’ll build up a positive credit history with a track record of paying bills on time. This makes it easier for you to qualify for lower-interest loans in the future, when you want to make bigger purchases like a car or a home, or even apply for premium rewards credit cards that require higher FICO® Scores.
Don’t treat credit cards like something to be afraid of or intimidated by. Instead, view them as an opportunity to build credit and improve your personal finances for the rest of your life.
Bottom line
If you’re 18, credit cards don’t have to be something to be afraid of. Talk with your parents or guardians about how you plan to use the card responsibly. Make sure you understand what happens if you don’t pay your credit card bill on time or if you carry a balance that can turn into high-interest credit card debt.
