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Post by merry27 on Nov 14, 2022 3:19:31 GMT
My daughter is 18 and I’m wondering what the best way is for her to establish credit.
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Post by katlady on Nov 14, 2022 3:26:15 GMT
She can get a secured credit card. You put a deposit equal to the amount of her credit limit. She can also get a small loan for something, and make regular payments.
We put our boys on our credit card to start. And we also co-signed a car loan with them when we got them their first cars.
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Post by 950nancy on Nov 14, 2022 3:56:29 GMT
We got them a credit card with a low limit.
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Post by cmpeter on Nov 14, 2022 4:03:05 GMT
Additional users on our Amex. Car loans, apartment leases.
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Post by ScrapbookMyLife on Nov 14, 2022 4:38:34 GMT
This thread reminds me of my first credit card. Mervyns. I think the credit limit was $50 or $100, can't remember. I bought a little something every month, and then paid it off.  |
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Gennifer
Drama Llama
Posts: 5,444 
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Post by Gennifer on Nov 14, 2022 4:48:16 GMT
A car loan. They put down at least 50%, and had another 25% saved in the bank. They also made double payments to pay it off quickly. That made getting their first credit card easy, about a year after the car loan originated.
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Post by quinlove on Nov 14, 2022 4:52:32 GMT
When my grandson was 16, I put him on some of my credit cards as an authorized user. He got cards with his name on them, connected to my credit card. Under his social security number. But, this he did not know. He has never had access to the cards. I just did it to give him good credit. A friend of mine had done it for her grandchild and I wanted to help mine out too.
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Post by Linda on Nov 14, 2022 4:58:32 GMT
That's not been something we've worried about. We don't use credit cards ourselves and our only debt is our mortgage - it was a little more complicated to get the mortgage as it had to be manually underwritten but overall wasn't a problem.
DS30 does have a credit card - in his name for travel expenses through work (military) - and a mortgage but no other debt. He had no problems getting his mortgage despite not 'establishing' credit.
DD22 has no debt - no credit cards, no car note, no student loans. So far the lack of credit history hasn't been an issue for her either and we don't anticipate it being one.
DD16 is still young but we don't plan to encourage a credit card for her either.
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Post by Zee on Nov 14, 2022 5:07:17 GMT
That's not been something we've worried about. We don't use credit cards ourselves and our only debt is our mortgage - it was a little more complicated to get the mortgage as it had to be manually underwritten but overall wasn't a problem. DS30 does have a credit card - in his name for travel expenses through work (military) - and a mortgage but no other debt. He had no problems getting his mortgage despite not 'establishing' credit. DD22 has no debt - no credit cards, no car note, no student loans. So far the lack of credit history hasn't been an issue for her either and we don't anticipate it being one. DD16 is still young but we don't plan to encourage a credit card for her either. How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. |
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Post by bc2ca on Nov 14, 2022 6:11:32 GMT
She can get a secured credit card. You put a deposit equal to the amount of her credit limit. She can also get a small loan for something, and make regular payments. We put our boys on our credit card to start. And we also co-signed a car loan with them when we got them their first cars.  Ditto |
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Post by leannec on Nov 14, 2022 6:41:39 GMT
Dd#1 has had a VISA credit card since she was 18 ... she is 23 now ... she has a relatively low credit limit and is very responsible with it.  Dd#2 will be applying for a VISA as well ... she is 19 and just recently got a steady job ... Financial advisors all recommend young people get a credit card and use it in order to build up credit! You need that good credit score in order to buy a car or a house later! |
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Post by krys on Nov 14, 2022 7:07:26 GMT
We added our older kids as authorized users on our card account. Now they are 21 and 23 and have great credit because of this.
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Post by malibou on Nov 14, 2022 9:48:48 GMT
That's not been something we've worried about. We don't use credit cards ourselves and our only debt is our mortgage - it was a little more complicated to get the mortgage as it had to be manually underwritten but overall wasn't a problem. DS30 does have a credit card - in his name for travel expenses through work (military) - and a mortgage but no other debt. He had no problems getting his mortgage despite not 'establishing' credit. DD22 has no debt - no credit cards, no car note, no student loans. So far the lack of credit history hasn't been an issue for her either and we don't anticipate it being one. DD16 is still young but we don't plan to encourage a credit card for her either. The hassles of trying to get a mortgage without a credit score is daunting. I would not set my kid up like that. We did what most others did and talked his ears off about how to manage his credit. He has always managed his money very well. I'm on holiday right now in a very remote part of england. We exchanged some money when we got here, but we are having trouble using it as everywhere wants a card and many simply won't take cash. We even had difficulty in London trying to use cash. Cash is not king here! 😉 |
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johnnysmom
Drama Llama
Posts: 5,687
Jun 25, 2014 21:16:33 GMT
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Post by johnnysmom on Nov 14, 2022 10:39:49 GMT
We added our older kids as authorized users on our card account. Now they are 21 and 23 and have great credit because of this. Same. We added ds to our card when he got his license at 16 with the agreement it was for gas and emergencies only. He graduated HS with a 750 credit score and got his own account. He’s now 21 and just bought a car, with a really good APR, entirely on his own. |
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Post by monklady123 on Nov 14, 2022 11:09:18 GMT
When dd and ds were in high school we got them a "teen" credit card through our bank (not sure it's called "teen" but you get the idea, lol) with me as the adult on the record. Very low limit but it gave them experience with a credit card. That was the first. Then they each got some sort of store credit card, or gas card, or something else.
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Post by smasonnc on Nov 14, 2022 12:33:43 GMT
We felt it necessary not only to help them build credit, but develop fiscal responsibility. When she left for college, we got DD a low limit credit card "just for emergencies." We eventually had to remind her that there were no Starbucks or late night cheesecake emergencies. She learned her lesson and is now the thriftiest of our children.
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artbabe
Pearl Clutcher
Posts: 3,844
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Post by artbabe on Nov 14, 2022 12:43:12 GMT
That's not been something we've worried about. We don't use credit cards ourselves and our only debt is our mortgage - it was a little more complicated to get the mortgage as it had to be manually underwritten but overall wasn't a problem. DS30 does have a credit card - in his name for travel expenses through work (military) - and a mortgage but no other debt. He had no problems getting his mortgage despite not 'establishing' credit. DD22 has no debt - no credit cards, no car note, no student loans. So far the lack of credit history hasn't been an issue for her either and we don't anticipate it being one. DD16 is still young but we don't plan to encourage a credit card for her either. How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. I don't use a credit card, only my debit card. I think it has been at least 15 years since I've used a credit card. I got one last year to go to Europe because I wasn't sure they would take my debit, but since I didn't end up going, I didn't end up using the card. Due to my bipolar and ADHD I am terrible at paying credit cards on time. I always had the money, just didn't have my act together to pay. So I solved it by not having a credit card at all. I've only owned one house in my life and currently don't own one. My only debt is my car lease. My young friend was worried about establishing credit and she made a comment that my credit rating must be really low. So I was worried about it. When I leased my last car I saw my credit rating - 805. So evidently just having a house and car and no other debt didn't hurt my credit.  I don't have any idea how it works when you are very young. I imagine you have to have some kind of credit history. But it is absolutely possible to get through life with just a debit card. I love not owing anything and never having to worry about paying bills on time. |
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peppermintpatty
Pearl Clutcher
Refupea #1345
Posts: 4,209
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Post by peppermintpatty on Nov 14, 2022 13:00:30 GMT
Put them on your credit card. We did that for both our kids and then my dd got a Discover card for students. Discover is horrible about disputing charges so as soon as she was able to get another card, she got a Visa card and then cancelled the Discover.
You WANT your child to have some debt or they will never build up their credit. Unless you are really wealthy, your kids will need to have some debt and a really good credit score in order to get a mortgage.
Carrying debt like a mortgage and a car loan is not a bad thing. Get a loan and then pay it off really quickly.
Debit cards are the worst thing ever. My kids don't have them and dh and I don't have them either. It is too easy to lose money when (not if) the number is stolen. If someone is that concerned with overspending, then track what you buy and make sure you have the money in your account to pay it off when the bill comes.
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Post by chitchatgirl on Nov 14, 2022 13:00:45 GMT
I think it’s great you’re thinking about this. My parents were anti credit card and it was hard when I went out on my own. I had a student loan but other than that no credit history. Had a big deposit for electricity because of no history. The credit bureaus couldn’t even find me. When I had no choice but to buy a car right after going out in my own, I had a 10% interest rate. When my husband and I got married, we were told not to even put me on the mortgage (I’m on the deed though) because it was only going to hurt our chance at a good rate. It took a good 5 years after the mortgage before I started having a credit score. I finally got my own credit card so I could do work travel. Pay it off every payday.
My dad is still anti credit card and insists in using his debit card instead including for online purchases. I’ve tried ti explain how dangerous that is. I’m still met with a blank stare. He couldn’t even get a loan for a piece of property he was thinking about because they couldn’t find any history on him.
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peppermintpatty
Pearl Clutcher
Refupea #1345
Posts: 4,209
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Post by peppermintpatty on Nov 14, 2022 13:08:48 GMT
How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. I don't use a credit card, only my debit card. I think it has been at least 15 years since I've used a credit card. I got one last year to go to Europe because I wasn't sure they would take my debit, but since I didn't end up going, I didn't end up using the card. Due to my bipolar and ADHD I am terrible at paying credit cards on time. I always had the money, just didn't have my act together to pay. So I solved it by not having a credit card at all. I've only owned one house in my life and currently don't own one. My only debt is my car lease. My young friend was worried about establishing credit and she made a comment that my credit rating must be really low. So I was worried about it. When I leased my last car I saw my credit rating - 805. So evidently just having a house and car and no other debt didn't hurt my credit. I don't have any idea how it works when you are very young. I imagine you have to have some kind of credit history. But it is absolutely possible to get through life with just a debit card. I love not owing anything and never having to worry about paying bills on time. With automatic bill pay through both credit card companies and your bank, I don't see how it could be difficult to pay it off on time. Capital One takes the full balance on my cards on their due date so I don't even have to think about it. Any other cards get automatically set to be paid through my bank when the ebill shows up. |
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Post by Merge on Nov 14, 2022 13:10:31 GMT
Like others have said, we made our kids authorized users on one of our cards when they turned 18. They actually use their cards to make their tuition payments, which we then pay off, but it builds credit and earns us airline miles. They've also used the cards with our permission in emergencies.
As others have mentioned, having a credit card is important in life for travel and online purchases. We've tried to teach our kids fiscal responsibility, though. The oldest got sucked into applying for a Sephora card to get a discount. She realized immediately that having that card was a bad idea because she doesn't have the means to pay it, and came to us for advice on how to turn around and close it, which we gladly gave her.
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Dalai Mama
Drama Llama
La Pea Boheme
Posts: 6,985
Jun 26, 2014 0:31:31 GMT
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Post by Dalai Mama on Nov 14, 2022 13:31:48 GMT
They each got credit cards the summer before they went to university.
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Post by Zee on Nov 14, 2022 13:37:17 GMT
How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. I don't use a credit card, only my debit card. I think it has been at least 15 years since I've used a credit card. I got one last year to go to Europe because I wasn't sure they would take my debit, but since I didn't end up going, I didn't end up using the card. Due to my bipolar and ADHD I am terrible at paying credit cards on time. I always had the money, just didn't have my act together to pay. So I solved it by not having a credit card at all. I've only owned one house in my life and currently don't own one. My only debt is my car lease. My young friend was worried about establishing credit and she made a comment that my credit rating must be really low. So I was worried about it. When I leased my last car I saw my credit rating - 805. So evidently just having a house and car and no other debt didn't hurt my credit. I don't have any idea how it works when you are very young. I imagine you have to have some kind of credit history. But it is absolutely possible to get through life with just a debit card. I love not owing anything and never having to worry about paying bills on time. You're lucky you haven't lost all your money that way. I never use my debit card like that anymore. I used to, but as someone else said above, automatic payments make it easy to remember to pay all your bills. |
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SweetieBsMom
Pearl Clutcher
Posts: 4,926
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Post by SweetieBsMom on Nov 14, 2022 13:39:41 GMT
When my grandson was 16, I put him on some of my credit cards as an authorized user. He got cards with his name on them, connected to my credit card. Under his social security number. But, this he did not know. He has never had access to the cards. I just did it to give him good credit. A friend of mine had done it for her grandchild and I wanted to help mine out too. This is what I did for DS. He has the CC in his wallet for emergencies only or if he needs to make a purchase with it, we discuss ahead of time, he can only purchase if he already has the money saved AND pays it off immediately. So far he's been responsible. We've discussed budgeting/debt but he has Autism so I don't think he understands yet but we keep talking about it  |
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Post by maryland on Nov 14, 2022 13:52:07 GMT
A car loan. They put down at least 50%, and had another 25% saved in the bank. They also made double payments to pay it off quickly. That made getting their first credit card easy, about a year after the car loan originated. That's great, you taught them well! |
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Post by workingclassdog on Nov 14, 2022 13:59:00 GMT
Just start with a credit card, just use it enough to pay off each month. I started with a JCP card I think.... just be sure not to carry a huge balance.
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StephDRebel
Drama Llama
Posts: 6,718
Location: Ohio
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Post by StephDRebel on Nov 14, 2022 14:30:14 GMT
I added each of mine to a credit card that has a long credit history, highish limit, and that we apy off every month.
They had no idea until they were over 18 and starting to apply for rentals and whatnot. They were very excited about their credit scores. I couldn't give them much when they were younger but they feel like this was a better gift than cash even.
I have the cards with their names in my possession but it has come in handy a couple of times when they've gone on long road trips. I appreciated being able to give them a card with their name in case something crazy happened. They've never needed them for emergencies but I've called and told them to use the card for a meal or a tank of gas if we wanted to treat them.
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Post by Linda on Nov 14, 2022 15:24:07 GMT
How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. Manual underwriting - they look at job history/pay, deposit, bank records etc...most people also have a rental history also and utility payments they've made. I don't drive so I can't speak to renting a car but I've never had problems buying plane or train tickets with my debit card. Same with online purchases - although I do usually use Paypal for the added protection on less known sites. Everyone is different in how they approach credit and there's not one right way that works for all but there are a lot of myths in this country (US) that one can't manage without it and that's not always true. |
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Post by Zee on Nov 14, 2022 15:32:08 GMT
How does one go about getting a mortgage with no credit history? I wouldn't think that was possible. It's also not practical to not have any card at all in this day and age if you do any travel whatsoever. You need a card to rent a car, book a hotel, reserve a flight, etc. Not to mention the convenience of using a card for online purchases, Uber eats, grocery deliveries, whatever. I put everything on my Costco card and we get a nice amount of money back every year. Manual underwriting - they look at job history/pay, deposit, bank records etc...most people also have a rental history also and utility payments they've made. I don't drive so I can't speak to renting a car but I've never had problems buying plane or train tickets with my debit card. Same with online purchases - although I do usually use Paypal for the added protection on less known sites. Everyone is different in how they approach credit and there's not one right way that works for all but there are a lot of myths in this country (US) that one can't manage without it and that's not always true. I don't want to use a debit card online. What exactly is the point of refusing to have a credit card? Surely you sound disciplined enough to pay it off every month. Refusal to have credit cards is like refusing to have a cell phone to me. Unnecessary. |
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cynthia1218
Junior Member
Posts: 63
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Post by cynthia1218 on Nov 14, 2022 15:34:32 GMT
i would never ever travel with my debit card. Yes there are protections with a debit card now days but I really don't want my cash hacked. I have had fraud with credit card and it was pretty easy to get it resolved but it did tie up some of the credit limit at the time. No biggie. But to have any of my cash tied up in a fraud is just anxiety. And I also like to keep my debit card limits low in case of fraud.
my daughter is in high school taking economics and they are learning about living a debt free life and learning about credit cards. His teacher lives the dave ramsey life but even he says he has a credit card for emergencies. No matter how prepared you are for life with money when life has an emergency some time the credit card just needs to come out and the $$ figured out after emergency.
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Ditto
