How Do You Add your Child to your Credit Card? Having a good credit history is one of the most important things that will help with your financial life. This is why it is important to not engage in activities that will lower your credit score. If you are bothered about your credit score and you want to know if you should add your child to your credit card, you are on the right track.
How Do You Add your Child to your Credit Card?
In this article, I will tell you if it is good to add your child to your credit card or not. We are also going to take a look at certain scenarios where it might be good for you to add a child to your credit card, and others. If this sounds good to you, then let’s go ahead and jump in without that waste of time.
Should You Add Your Child to Your Credit Card?
The question of whether to add your child to your credit card is a question that has been out for a long time. And in this article today, you are going to be getting the answer to that question. As a parent, everyone wants to give their child every advantage and opportunity in life. This might be adding them to your credit card as authorized users. The question is, is it right to do so? Find out as we go ahead with this article.
Who is an Authorized User?
An authorized user is a person that has been added to a credit card account that has been given or issued to you. As an authorized user, you give the person permission to make changes to your account by using it to make purchases and other credit card activities. The only difference is that the person is not responsible for the debt that is incurred on the card.
As a cardholder, you can typically request for someone to be added as an authorized user to your card by calling your card issuer. However, they will only grant your request if your account is in good standing.
Do Authorized Users Build Credit?
The answer is simple. It depends on the use of the card. If after adding an authorized user to your credit card account, both of you make good payment behavior and use the card responsibly, yes, it will have a positive effect on both your credit scores. But when the car is being used irresponsibly with late payments and others, it also affects both credit scores negatively.
The benefits of adding your child as an Authorised user to your credit card
There are several benefits or advantages to adding your name as an authorized user to your credit card. Some of them are listed below:
- Adding your card as an authorized user teaches your child financial responsibilities that they will otherwise not have if they do not use a credit card.
- It also gives your child spending independence; they do not have to ask you for money before purchasing what they want.
- Making your child an authorized user of your credit card will encourage them to have conversations about money with you. When they make a purchase they’re not supposed to, you can engage in conversation with them.
- Helps to build their credit history when they use the card responsibly.
- They also get a reward for their spending.
- Some of the benefits the cardholder gets are extended to your child.
Above are some of the importance or benefits of making your side and authorizing users or adding them to your credit card.
The Drawbacks to adding your child as an authorized user to your Credit Card
Just as there are advantages or benefits to adding your child to your credit card, there are also major disadvantages or drawbacks. Some of the drawbacks are listed below:
- You are the one that is responsible for the payment of what the child uses the cards to purchase.
- Your child might spend up to the maximum credit limit on your card.
- It becomes difficult to differentiate between your child’s spending and your own spending.
- If they do not manage the card responsibly, it might affect your credit score.
- You might also be charged a fee anytime an authorized user makes use of the card.
- Your current activity can also hurt your child’s credit if you do not spend responsibly.
These are not all the disadvantages, however. There are just to mention a few of the advantages of adding your child to your credit card.
When should you add your child to your Credit Card?
Now that we have seen some of the disadvantages and advantages of adding your child to your credit card, let’s see if there is any specific time that you can add yours. One of the best times when it is necessary to add your child to your credit card is when they are a teenager and they need money for college. This is one of the best times for them to build good credit through responsible credit card use.
That is not all the scenarios in which you can add your child to your CC Another situation is if they need money for gas. However, it might not be a good thing if you have a child that is too young to understand how money works on your CC. This is one of the reasons why you should never add a child to a CC.
How Do You Add your Child to your Credit Card?
Adding your child to your CC is usually an easy and straightforward process. All you need is to make sure you have responsible users on your credit card, then call the number on the back of your credit card. This is your issue number when they pick up. Simply indicate your interest in adding your child to your credit card. You can also log into your credit card and add them through your dashboard.
How to Remove a Child from your Credit Card
When it is time for your child to have their own CC, you can simply decide to remove them from yours. However, you should want to keep the authorized users of your credit card open for as long as possible so that they can keep on building their credit. When you are finally ready to remove them from your credit card, you can simply contact your issuer to do that.
What happens if I add my daughter to my credit card?
When you add your daughter or any of your children to your credit card, this means that your CC will not be used by two people. One is the cardholder and the other one is the authorized user. The authorized user can use the card to make purchases at any time. You can also use the card to make purchases as well.
Will adding my son to my credit card help his credit?
The answer is yes, adding your child to your CC will definitely hurt his credit if both parties maintain responsible CC usage.