The right age to apply for your first credit card is whenever you can handle it responsibly. Many Americans think that age is 22. But according to a recent survey from financial website Bankrate, which polled 10 certified financial planners from different parts of the country, that’s actually not soon enough: 19 is a smarter age at which to start building your credit history.
“I think 22 is a little late,” Dana Twight, a certified financial planner in Seattle, tells Bankrate. “I think you want to help your kids, or your independent kids, and support them in opening a card when they’re young enough to benefit from a parental safety net, if that’s possible.”
That’s because a credit score, which can range from 300 to 850, is an important measure of your financial health that signifies your trustworthiness to financial institutions. A good score can help determine how easy, or how expensive, it will be for you to rent an apartment or buy a home.
So, “the sooner you start building credit,” concludes Bankrate, “the better.”
If you’re under 18 and aren’t old enough to get your own card, you could, with permission, use someone else’s. This process is called credit card “piggybacking” and involves becoming an authorized user on someone else’s card: The primary cardholder agrees to add you as a secondary user and the card’s payment history then becomes part of your own credit report.
While this method is useful if want to gain experience using plastic, or if you lack enough credit history for a specific goal like buying a car, it’s not intended to rehabilitate poor credit.
Another option is to get a junior credit card, which is intended to teach young adults good credit habits by allowing them to use a card connected to an adult’s account. Though, much like a normal card, any missteps on the part of the junior holder are reflected on the adult’s account.
If you’re over 18, you can try starting with a secured card, which typically requires a deposit that matches the line of credit. That limits the risk for the card issuer, while helping the new cardholder learn to handle credit.
Here are some additional ways to go about getting your first card.
Whichever method you choose, opening an account can help you establish an official line of credit and begin building your credit history. Installment loans, such as student loans, are also considered a part of your credit history, which is why it’s important to pay them on time or to look into alternatives if you can’t.
Many millennials agree with the experts polled by Bankrate that it’s best to open a card at a younger age. Nearly two-thirds of respondents, or 63 percent, say it’s best to get a card before turning 21. That’s compared to only 37 percent of older generations who say the same.
Still, there are good reasons not to rush: Quentara Costa, a certified financial planner in North Andover, Massachusetts, warns she has “seen too many college kids with credit cards getting themselves into trouble,” Bankrate reports. So waiting until you’re 22 or older is “a safer bet.”
Whether you open a card at age 19, 22 or even later, it’s important to be attentive and careful. That means understanding how scoring works, paying bills in full and on time, keeping your utilization rate below 30 percent and monitoring your credit score.
“Opening your first credit card is an important step to building your credit history and helping you achieve your financial goals,” Todd Rosenthal, general manager of credit cards for PNC Bank, tells CNBC Make It. “There is no perfect age to starting this journey.”
Remember, though, he adds, “it’s a journey and not a sprint. The time is right when you are ready to commit to financial responsibility and well-being. In the end, using a credit card [and] establishing a good credit history are important tools to your financial lives.”
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Video by Beatriz Bajeulos Castillo
