A credit card can be a powerful financial tool but comes with a lot of responsibility. If you’re under the age of 21, your parents are likely wondering if you’ll ever be able to get your card. And at age 18 and 19, there may be restrictions on what type of card you can qualify for.
So, if you are a wonder to know the legal age requirement for a credit card, read the article. This article cover topics like,
What is a credit card?
How do credit cards work?
Age requirement for applying for credit card
Why is credit card not good for your child?
You also know the advantages and disadvantages of a credit card with lots of information.
First, you need to know some basics about credit cards.
What is a credit card?
A credit card is a type of card that provides the facility like withdrawal money, purchasing, or tackling minor emergencies without having funds in your bank account. Withdrawal money from a credit card is similar to withdrawing money from a debit card. This card does not link with your bank account as a debit card. That means your expense amount does not deduct from your bank account. Your expense amount provides by the same bank or private lenders where your get your credit card. So, the most vital question that may arise in your mind is how do credit cards work?
How do credit cards work?
Credit cards are payments cards used by card users to enable cardholders to pay a retail store for goods or services. This card expense has a limit that varies from person to person and bank to bank. The expenses limit of your credit card decides by your bank or credit card company which depends on your repayment capacity and credit score. This credit card is a non- Collateral card. That means you do not need to make any security deposit against your expenses in the bank. At the end of the month, you will have to repay your spending money in your bank. If you are late in repayment, you will receive a penalty with a high-interest rate from the credit card company. You can also call a credit card a small loan because there are some similarities in a credit card compared to a loan. In both credit cards and loans, you have to make money in the form of debt from any financial institution. But the question is, at what age do you get a credit card?
How old do you have to get a credit card?
Generally, 18 years old people can get a credit card but, it is not true because this rule is not to apply in all countries in the world. Every country and its financial institution has its own rules and regulations.
Some countries offer credit cards at the age of 20, for example, Russia. But some countries provide credit cards at the age of 16, such as France. So, don’t get confused if someone tells you that you can get a credit card at the age of 18 because they tell you the average age. First, you should check the age requirement in your county and then apply for a credit card. Before taking a credit card, consult your parents. And if you are a parent and want to get a credit card for your children, check the eligibility criteria before applying.
Age requirement for applying for the credit card
Everyone knows about credit cards as a great financial tool today. But only a few people know the eligibility criteria and age requirements which are a vital part of the application process. This age requirement for applying for a credit card is different in financial institutions of different countries. Some of them offer at the age of 16 while others at the age of 21. But several countries provide at the age of 18. You should also know that your credit history will take time to build up if you are applying for a credit card for the first time. This article has listed some countries’ age requirements and eligibility criteria shown below.
List of countries and minimum age requirement for applying credit card
|Countries||Minimum age requirement for qualifying credit card|
|United state||18 years old|
|United kingdom||18 years old|
|India||18 years old|
|Australia||18 years old|
|Germany||18 years old|
|South Africa||18 years old|
|Spain||18 years old|
|Singapore||18 years old|
|Italy||18 years old|
|Finland||18 years old|
|Ireland||18 years old|
|New Zealand||18 years old|
|Zimbabwe||18 years old|
|France||18 years old|
|Bangladesh||18 years old|
|Sri Lanka||18 years old|
|Bhutan||18 years old|
|Russia||At least 20 years old|
|Indonesia||21 years old|
|Japan||20 years old|
|Philippine||At least 21 up to 65-70 years old|
|Thailand||At least 20 years of age|
|Nepal||21 years and above|
On the bright side of credit cards
The use of credit cards for purchases is now becoming a trend. It may have caused better effects to others and not best to some. Well, it’s maybe all these things would depend on the user if they know the proper way to use it. They will manage to enjoy its different advantages. So looking at the brighter side, let us enumerate this one by one. Using a credit card is of no doubt a convenient way of paying and provides safety to the user for one need not to carry on cash whenever you need to buy something like the expensive ones. Therefore, it takes away the fear of losing your money for other reasons like theft or carelessness.
It also offers protection under the Consumer Credit Act, wherein you could get your money back whenever it is used on a fraudulent purchase after you have reported its loss or theft. Some credit card companies give incentives, freebies, or special privileges to the users of their cards. For example, you could earn (air miles) for every purchase you made, and when you have earned enough points, you could travel for almost free. Also, give cash rebates on purchases like annual savings of 1% on all purchases that you can claim by receiving credit on your bill or a rebate check; gas rebates; store and restaurant discounts; and some seasonal rewards for the cardholder. A good and responsible credit card holder who pays timely while helping you restore your credit standing. A good rule of thumb is to prevent spending more than 15% of your available line.
By also using your credit card, you are helping an approved charity, Because the companies are giving back a percentage of your purchase thus, making a nice tagline of (helping while shopping).
The tendency to increase the use of credit cards
After the 1950s, only a few banks provided credit cards to their users. But with the increase in time and technology, the number of users of credit cards is also increasing. Today, 2.84 billion credit card users in the whole world. Moreover, credit card users may be grown in the future. If you analyze the data of the last four years, there is an increase of credit card users approximately 8% every year. Today the credit card has got a hold over the debit card in the entire market. As the number of users of credit cards is increasing, so are the cases of credit card fraud. And now, credit card fraud is the fourth highest in all criminal cases. About 400k credit card fraud cases are filed every year in the USA, of which 92% of fraud cases are on new credit usage. So, if your credit card gets lost or forgotten anywhere, take immediate action and get your credit card blocked. Otherwise, you may be facing this type of fraud.
Why are credit cards bad for teens?
- A credit card can be a great tool to teach your kids when used correctly. However, far too many people get their first credit card when they are underage and do not have any real income. They then use this credit card to purchase things they do not need and never pay it back. These habits cause hassle in their life, and they can never get away from this habit.
- A recent study suggests that parents encourage their kids to start using credit cards at a young age. Of the parents with children under teenage, 53% said they would give their child a credit card to start building credit. Yet, once they have started building credit, it is hard to stop them from racking up debt.
- There are two reasons why giving your child a credit card is a bad idea. First, it sets them up for failure and could lead to more debt than you want them to have. Second, it promotes bad spending habits that can last a lifetime.
Benefits of using Credit Cards
- If You need something urgently, you do not have the cash to pay for it. You get frustrated with how you can afford to pay for it. And also, you do not have enough amount in your bank account. In this situation, a credit card plays an important role which providing you the facility to complete your purchase.
- Credit card companies offer you many rewards on your purchases. These rewards are either in the form of savings or additional discounts that save you some money after purchase. For example, you purchase some product of 100$ with 10% extra-discount then you have to pay only 90$ that means you will save 10$ on your shopping.
- If you travel with an airline, book a hotel, or visit a restaurant, you should use your credit for paying your bill because a credit card offers the best discount on this type of booking. If you save some money on your expenses, it will improve your saving. For example, if you book a restaurant that costs around $1000 and you get 30% off after using your credit card, you will save $300 on your expense.
The disadvantage of using a credit card
- The APR ( Annual Interest Rate) of a Credit Card is very high. You get some benefits of using your credit card, but you have to pay high interest on the card. This interest rate varies from 10% to 20% that is very high compared to another mortgage. If you are late in your repayment, you face a penalty from credit card companies. This penalty is a high-interest rate on your due amount. So, before using any credit card, you must know your card APR.
- Many people are quagmire in the debt of credit cards because they use credit cards only for purchasing products while they don’t need this product. They do not even know about it and get addicted to it, then get drowned in debt. Why does this happen? Because the credit card company provides you lots of rewards and discounts on the products, you purchase this product by getting greedy even if you already have the goods. This type of habit ends your saving in a short time.
- Credit Card Debt – If you use a credit card to fund things like holidays and luxury goods, you are taking on bad debt. Without the discipline to pay off your credit card debts at the end of the month, your credit card debt is likely to incur high monthly interest rates that will accrue over time, making the debt to be increasingly difficult to settle.
Many credit card companies have a minimum age requirement for their cards. Some cards will let you apply when you turn 18, but the card won’t activate until you’re 21. Other companies may not offer cards to minors at all. You can apply for the card at any time, but even if your application is approved, your account will not be active until you turn 21. Besides this, The only factor that matters is if you have enough income to pay off the balance every month, then you can get a credit card. If you have any enquiries, then don’t hesitate to comment.