Ask Jean: How to Help Your Kids Build Credit
My daughter just started her college and would like to know if she should apply for her own credit card or I should add her as an additional user? I want to make sure she has good credit score throught her life.
Thanks, Sonny
Hi Sonny,
This is a very timely question — not just because your daughter just started college, but because of the recent changes in credit card rules under the CARD act. At this point, unless she has income of her own that she can document or is 21, she can’t get her own credit card. So that takes that option off the table. Now, let’s talk about whether you should add her as an additional user to your card. This comes with some risk. If your daughter uses your card above and beyond the level you agreed to allow her to use it, then your financial life and your own credit score could be at risk as well as hers. I know of an issuer that will allow you to add your daughter to build her credit score without putting your finances at risk: the American Express Charge card. Its program allows you to set limits on your daughter’s spending — to be fair, other issuers will do that too — but AmEx has also said it will only report your daughter’s positive behavior to the credit bureaus, not negative behavior. In that way, she should emerge from college with a good credit score and that will enable her to qualify for a card — from whomever she chooses — on her own.
