Why I Added My Son as an Authorized User to a Credit Card
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For most of my adult life, I have had good credit. To be honest, I can't ever remember my credit score ever being below 760 ... although I never kept detailed records.
I'm not saying this to brag. But there are a lot of benefits to having good credit.
For example, my wife and I have never had any issues with getting a competitive mortgage rate ... we've had two so far in our lives.
We've never had issues getting a car loan ... although I am debating on taking out any future car loans and paying with cash instead - but that is a different topic.
And when it comes to travel hacking, neither my wife (she has better credit than me) or I have ever been turned down for a premier card for having a low credit score.
By the way ... some people worry about opening up travel rewards credit card in fear of lowering their credit score. From my experience ... my credit score has actually increased from opening up cards.
I went from having good credit to having great credit.
So while I typically only rely on having an excellent credit score when I take out a new loan (not very often) or opening up a new travel rewards card ... I recently decided to leverage it for another reason.
Several months ago my wife and I decided to pass some of my excellent credit down to our oldest son ... who just turned 16.
I added my son as an authorized user to one of my credit cards, which hopefully should help pass along some of my excellent credit to him.
Today I would like to share the reasons why we felt it was time to add him as an authorized user and give details on the steps we took.
Why Did I Add My Son as an Authorized User?
I know what you might be thinking ... "why in the world would you ever give a 16 year old a credit card?".
Yeah ... I certainly thought twice about it ... but in the end, my wife and I decided to add our oldest child (16 year old son) as an authorized user to one of my credit cards.
Sure there are some downsides to getting our kid his own credit card as a teenager. We certainly don't want him racking up a bunch of credit card debt on our cards ... even if not done intentionally.
When you add an authorized user to your account, then you are responsible for paying the debt. Your credit score is the one that will be impacted.
But for all the downsides, I think the upsides are way too big to ignore.
Below I've listed the top 3 reasons why we decided that adding our son as an authorized user was a good idea.
1. He Got His Drivers License
Just in the past couple of months, our son passed his driving test and now has a provisional license.
Basically ... he can now drive on his own between the hours of 5:00 AM and 9:00 PM, with a limited number of passengers.
While we haven't yet purchased a car for him, our plans are to find a good used car sometime later this summer. (There will likely be plenty of future posts around buying a car for a teenager)
In the meantime, we wanted our son to have a way to pay for things like gas (for my car when he drives it) and food if he is out. We are not generally cash users ... so getting him a credit card was a good option.
Over the past couple of weeks, we have been teaching him how to actually use a credit card when paying for things at the store or pumping gas.
2. Teaching Responsibility of Credit Cards
I have found that getting our son his own credit card has helped teach him about being responsible with credit ... at least so far.
He is only 16, but already understands how credit works and that it is not just free money.
And to help things out ... he is also currently enrolled in a personal finance class at his high school. So my wife and I are seeing firsthand the lessons of using credit properly sink in with our son.
Note - At the time of this writing, our son has yet to use the authorized card on his own. Either my wife or I have been with him as he feels a bit uncomfortable still with figuring out those credit card machines.
When he does eventually get a car and begins to pay for things with his card ... we've made an agreement with him to sit down at the end of each month to review his purchases.
We aren't at the point of requiring him to pay for his purchases yet ... but that will come once he starts working more.
3. Establish Credit as a Teen
Last ... but most important ... we added our son as an authorized user to one of my credit cards to begin establishing his credit.
Some may think this is too soon ... he is only 16 after-all. But I don't see any reason to wait, as long as I feel he can handle the card responsibly ... which I do for now.
As I mentioned several times already ... I have great credit as does my wife. So why not use this to our advantage and give our son access to this good credit down the line?
One day in the future when he wants to buy a house or maybe start travel hacking himself ... he hopefully can leverage this gift of being an authorized user.
Our goal for now is to eventually get authorized user cards for our other two children when the time comes ... of course assuming they are responsible.
Here are a few other resources about establishing credit for your kids from The Points Guy -
How I Added My Son as an Authorized User
Once my wife and I decided to add our son as an authorized user to one of our accounts, the next step was to decide on which credit card to use.
First we decided against using one of our Chase credit cards. The thought here was to prevent any issues in the future with our son wanting to do some travel hacking of his own and opening up some of the top Chase cards. I'm really not sure if this matters or not ... but we decided to play it safe on this one.
Next ... we wanted to get him on a card that had been open for a longer period of time. Most of our travel hacking cards have been opened within the last 3 years.
Another thing we considered was making sure that the credit card we used reported the credit history for the authorized user to the major credit bureaus. Since we have a goal to help our son have a credit score, this was important.
Finally, we wanted the purchases made on this authorized user card to earn some form of points or miles.
We ended up adding our son as an authorized user to my Discover card account, which has been open for 10+ years. The card earns 2% cash back on purchases ... so this seemed like the best option.
Overall ... the process of adding our son was very simple using Discover, which I will explain below.
Discover Authorized User Requirements
The process of adding an authorized user to my Discover card was simple ... actually much easier than opening up a new credit card.
In order to add an authorized user to a Discover account, we needed to meet the following criteria -
- authorized user must be 15 years old and someone that I trust
- provide the Social Security Number (SSN) of the authorized user
- provide first and last name, address, and date of birth of authorized user
Within a couple of minutes, I was able to login to my Discover account as the primary cardholder and add my son by following the Adding an Authorized User instructions.
In about a week's time he got his new card in the mail.
Credit Reporting from Discover
One last thing to mention about Discover ...
We wanted to make sure that Discover would report our sons information to the major credit bureaus. Remember ... one of our goals was to build his credit score ... which is heavily weighted by credit history.
The following is from the Discover website ... which confirms this requirement -
"Discover reports the account credit history to the three major credit bureaus as to you and as to the Authorized User. This can help build the Authorized User's credit history if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact yours and the Authorized User's ability to build credit."
Will Our Son Begin His Adult Life With Awesome Credit?
Do I think that my son will start out his adult life with awesome credit? Only time will tell with this ...
I think this approach will work ... but there are multiple factors that could derail this experiment. For example, I need to make sure that I keep my own credit in good standing.
Historically I've had great credit. I'd like to pass that along to my son. But as I experienced a few months ago ... your good credit can drop rather quickly. This was when my credit score dropped by 40 points almost overnight because of high credit utilization.
I did manage to bring my score back up just as fast as it dropped ... but I can't predict what will happen in the future. If my credit score drops to a low level in the future ... then I need to drop my son as an authorized user, so that he doesn't inherit a bad score too.
Also ... my son and his actions will play a big role in the success of this experiment. If he is careless and irresponsible with credit ... then we would likely cancel his card.
Overall there are a few risks with adding our son as an authorized user to my credit card, but I feel they are manageable. My wife and I both believe these are low risks we are willing to take if it can help our son start his adult life with awesome credit like ours!