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Adding teen on card - is this a good idea?


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My son is 17 and I am trying to set him up for a positive credit and financial future.  He is joining the Navy and will be contributing to a ROTH IRA and saving money for emergencies and such. I also want him to have and maintain a good credit score. I know his clearance will require a good score (due to the job he will have we know its required) and we are teaching him the do's and don'ts of credit. All the things his father and I wish we knew at that age. I was thinking about adding him to our cards as an authorized user to help his score. My only concerns is our card is very low (we are rebuilding our score). We each have a Visa with a $450 balance. We have maxed it out in the past but for the most part it remains paid off, just sometimes its reported as maxed out because pay after they report. It's never been late though. I'm just worried the utilization would be bad for his report since he has nothing else. 

 

Any suggestions?

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the balance is $450, what is the limit? I wouldn't add him to a card with high utilization. Also, is the card old? Ideally AU accounts will be on aged cards.

 

I applaud you for wanting to help him but you may need to focus on your own situation first. When he turns 18 he can open a secured card (or two) and hopefully by then you'll have a a higher limit card with zero or near zero utilization.

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Agree with Hege on this one.  Honestly your card(s) may do more harm than good.  When he gets into the service, have him establish a relationship with Navy Federal CU.  Have him get a secured card which will graduate and they are very generous with credit limits and their approvals.  After a year and the card graduating he should then get 1-2 other cards, then use them responsibly.  By the time he is 21, he should have a decent credit file built up and be on his way.

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Adding a card with a high limit and low to no balance is great idea.  Adding a card with a Low limit that gets maxed out every so often is a bad idea.  

 

When adding an authorized user...keeping the authorized user's card so the authorized user doesn't have access to it and the account is only used for reporting purposes is an even better idea if the limit is high and the utilization is low.

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Having had clearances in the past myself, this is a bad idea to add a card with a concerning utilization limit. Let him build his own credit by starting with a secured card if no other options are available. Once in the military, he can get a card with NFCU or USAA - both are more likely to give better credit than you think to a new person in the military. 

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On 5/20/2019 at 2:28 PM, shadekitty said:

Having had clearances in the past myself, this is a bad idea to add a card with a concerning utilization limit. Let him build his own credit by starting with a secured card if no other options are available. Once in the military, he can get a card with NFCU or USAA - both are more likely to give better credit than you think to a new person in the military. 

Which, is what I said basically.

 

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Age of oldest account is a large, permanent benefit (or 10 year benefit after the account is closed).

 

High util % is ephemeral. It only hurts for a month!

 

Best thing for him is to add him as AU then allow a very small balance >$1.01 to report every month. Second best is to add him and have $0 balance reporting.

 

Don't give him the physical card or # though. After a few months as AU he should qualify for his own unsecured card (maybe Discover - easy to get and no AF).

 

A $1.01 balance reporting is best for you too (see "$2 trick"). Do that, then request a CLI. Request another CLI every 6 months +1 day after the last one.

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I have a 14 year old son. He travels with school and needed a credit card recently, mainly as a backup to his cash. I added him as an AU on one of my sock-drawer cards that I keep for "oldest account". It only has a $2500 limit and only gets occasional spend of $10 every few months. When my son doesn't travel, I hold onto the card. I think it's great for his credit history as well as teaching him responsibility. I might be lucky to have a very responsible son though. Last time he traveled, I forgot to ask for it back. He had it in his wallet for 3 months but didn't use it a single time. Now if that was me at that age, my credit history and parents would have been in trouble. ;)

 

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On 5/18/2019 at 1:59 AM, CantEven said:

My son is 17 and I am trying to set him up for a positive credit and financial future.  He is joining the Navy and will be contributing to a ROTH IRA and saving money for emergencies and such. I also want him to have and maintain a good credit score. I know his clearance will require a good score (due to the job he will have we know its required) and we are teaching him the do's and don'ts of credit. All the things his father and I wish we knew at that age. I was thinking about adding him to our cards as an authorized user to help his score. My only concerns is our card is very low (we are rebuilding our score). We each have a Visa with a $450 balance. We have maxed it out in the past but for the most part it remains paid off, just sometimes its reported as maxed out because pay after they report. It's never been late though. I'm just worried the utilization would be bad for his report since he has nothing else. 

 

Any suggestions?

 

Don't do it.

 

In basic training tell him to join Navy Federal Credit Union and direct deposit his entire paycheck there every month.  They will give him all the credit he needs, and then some.  

 

His future security clearance will not require a good credit score.  It will require he not have bad / derogatory credit.  

 

Edited by PotO
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I added all three of my kids to various cards when they were around 14.  My daughters are 19 now, and one of them just got a BoA cash rewards card with an initial limit of $1500 and 16% APR.  They told her at the bank that her FICO was 780.  It does make a difference, just for God's sake don't let them actually have the card!

 

Did I mention that I'm kind of jealous that my kid's FICO is higher than mine???

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As far as the military and security clearances are concerned, a "good (FICO) score" is not expected for a recruit / "A" school trainee for 17+ year olds. As long as his credit file is not replete with charge-offs and derogatory info, he's fine.  

Tell him that buying a used car/SUV/truck for 29.9% APR from the auto dealer next to the base is the source of many ills for young people in the military. I've seen this very scenario too many times as a NCO.

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On 6/3/2019 at 3:52 AM, insolent1 said:


Tell him that buying a used car/SUV/truck for 29.9% APR from the auto dealer next to the base is the source of many ills for young people in the military. I've seen this very scenario too many times as a NCO.

I agree. I'm not in the military but live close to a base and have known several young recruits. It baffles me that they fall for such predatory selling/lending practices. I would think that the military would want their warriors to be in the best fiscal health and try to help them avoid such pits.?!  Sorry for going off topic. 

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18 minutes ago, pronto said:

I agree. I'm not in the military but live close to a base and have known several young recruits. It baffles me that they fall for such predatory selling/lending practices. I would think that the military would want their warriors to be in the best fiscal health and try to help them avoid such pits.?!  Sorry for going off topic. 

 

We do.  And while we control how they dress, cut their hair, how they work, where and when they work, where they live and literally hundreds of other little details of their existence, we haven't quite figured out how to babysit them enough to the degree where we can control where they buy their groceries or their cars.  

 

We we also haven't found a way to force "decent" creditors to extend credit on good terms to someone who earns a take home of around a whopping $1,500 a month max and whose only experience with personal finance prior to enlistment was controlling the $5 their parents gave them each day for their school lunch and the occasional pair of Air Jordans.  Few, if any, even have a credit score and those that do likely only have one tradeline from AAFES / NAVEX.  So tell me on your planet who the fook will extend them credit on a new car they can actually afford at 6%?  A new car that, by the way, is virtually un-repossessable on default.  And where wage garnishment or bank account attachment is impossible.

 

In the price for risk game, most of these folks are riskier than Joseph.

 

Personnel are warned about these car dealers and told where the decent ones are, but their options are limited.  And they need a car.  Without a car, their entire life is a room about 1/3 the size of a two-car garage shared with one other.  Public transportation into town is a farce, even if they are lucky enough to have it to begin with.  Walking is an option ... if you are into a 24-hour hike round trip.  

 

So they end up at Crappy Charlie's Used Cars and end up with a car, gas, maintenance and insurance at around $700 per month.  If you are single, it may be manageable. If married, you'd have to be a flaming moron to think it is.  

 

Yeah, but everything is just fine.  Until you have car repairs.  Or a deployment.  Or a baby.  Or a sick family member (parents).  Death in the family.  Decide to actually live your life and take annual leave.

 

So simply telling a person not to buy at certain places -- the only places that will actually touch them with the shitty end of a stick -- is stupid and shows you don't know WTF you are talking about.  And if you are baffled by it, brain damaged to boot.  

 

There are two solutions:

 

1.  Tell God & Elon Musk to invent free personal tele-transporters;

2.  Pay people who do your dirty work more than your average Starbucks coffee jockey; or

3.  Just STFU and stick to something you have a reasonable chance of success at ... such as precisely pouring milk over a bowl of cold cereal.  

 

Pick one.

 

 

 

 

 

 

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