BUILDING CREDIT AS A MINOR / UNDER 21
There is a great deal of contradictory info going around regarding developing
credit while a minor under the age of 21. Is it possible to
build credit
while being that young? If yes, how? Is it important to begin establishing
credit even while in high school? It is not hard to
go from no
credit to good credit. But it is critical that parents teach their children
about credit. Learn
more.
In May of '09, the
Card Act was signed into law by President Obama. The
Card Act is intended to enhance the regulation of financial
services, counting those that impact the youth of America.
This plan has been turned out in three different phases
during a fifteen month time frame.
How does the Card Act effect people under the age of 21?
-In order to apply for any type of credit card, those
that are under the age of 21 are mandated to present proof
of income or have a co-signer. (Note: You must be at least
18 to apply for any credit card.)
-Credit card companies are not allowed to send pre-approved
offers to people under the age of 21 unless they have
received permission from the receiving parties.
-Credit card companies are not allowed to increase credit
limits for accounts of those under the age of 21 that have a
co-signer attached to them unless the co-signer remits
written permission.
-Credit card issuers are not allowed to market free gifts
for applying to college kids near or on college grounds.
In conclusion, you can build credit if you are under the age
of 21. Utilizing a credit card will likely not be your best
option.
Student credit cards usually have high interest rates
and fees associated with them making their benefit not worth
the cost. And, studies have shown that individuals that fit
into the 18-21 age group have a much greater chance of
developing debt issues before generating a history of good
credit. So you may be asking, 'how else can I get credit
other than from credit cards?'. Easy! Open a cell phone and
some utility bills in your name and pay your
bills
on time and in full every month!
Credit 101
Six Steps to Re-establishing Your Credit
Mortgages to Rebuild Credit
Getting Credit with a Secured Credit Card
Personal Loans for People with Bad Credit
Teaching Kids About Money
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