Getting a Credit Card at 18: Strategies and Tips

Are you a 17-year-old wondering if you can get a credit card? The answer is you can start exploring credit card options even before your 18th birthday. This article will guide you through the process and offer strategies to build a strong credit history early on.

Starting Early with Credit Cards

Once you turn 18, you have the flexibility to apply for various credit card options, including those with low limits. Banks such as HDFC, SBI, and KOTAK offer fixed deposits with minimum amounts, which can kickstart your credit card journey. Additionally, fintech companies provide low-cost credit cards with minimum fixed deposit amounts, typically around 2000 INR or less.

IndusInd Bank Offers

Consider applying for a credit card with IndusInd Bank, which often comes with higher credit limits, no joining fees, and flexible reward plans. Visit bnking for more details. Whether you plan to shop, travel or make household expenses, choosing a card with rewards can enhance your finance management experience.

Understanding Initial Credit Limits

When you first get a credit card, the limit might be quite low, such as 200 INR. However, this is a starting point and an opportunity to build your credit history. Initially, you might exaggerate your income to get more substantial limits, but remember, you need to manage it responsibly. Just like I did, navigating the early credit card years with a higher limit might lead to financial missteps, which can be costly.

Building Credit History Through Authorized User Status

For a more strategic approach to building your credit history, consider becoming an authorized user on credit cards held by individuals with excellent credit scores and histories. This method is particularly helpful for young adults who are just starting out. An authorized user's credit history reporting can significantly boost your own credit score.

Steps to Become an Authorized User

Choose a Stable Credit Holder: Select someone with a high FICO score (800 or above) and a long-established credit history. This person should not be maxing out their cards and should maintain low balances. Ensure Stable Financial Situation: Work with individuals who are financially stable and living within their means. Their card usage should reflect good financial behavior to protect your credit score. Report Tracking: Understand that the credit history of the card will be reported to your credit files. Some accounts may only report to two of the three credit bureaus, but many do report to all three. Applying for Cards: Once your credit score is positively influenced, you can apply for your own credit cards. With sufficient income to support higher credit lines, you can likely get approved quickly. Responsibility: Remember to always pay your bills on time and in full to maintain a healthy credit score.

Conclusion

While it’s challenging to start with a credit card at 17, you can definitely start early by making small deposits. After 18, explore options like fixed deposit credit cards and incentivized credit offers. Additionally, becoming an authorized user on a well-managed credit card can provide a significant boost to your credit score. By being responsible and managing your finances well, you can establish a strong credit history even at a young age.