A Simple Way To Help Your Kid Build Credit

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Building credit at a young age can help you get your financial life started on the right path.

Money expert Clark Howard has started early with his 16-year-old son Grant and talked about it recently on the Clark Howard podcast.

We’ve told you the type of credit cards that are in Clark’s wallet, from the Costco Anywhere Visa to the Southwest Rapid Rewards Priority Credit Card. But you may be wondering what kind of credit card Clark’s son has in his wallet.

What Kind of Credit Card Does Clark’s Son Have in His Wallet?

“With Grant, I made him an authorized user on my Navy Federal credit card. I get an alert every time he does a purchase more than … a relatively small amount of money,” Clark says.

Whenever Grant goes over that specified amount, Clark says: “Then I can say: ‘Hey Grant, I see you’re at [a certain store]. How come you spent X number of dollars?’”

An authorized user is someone who is approved to make credit card purchases with your account but is not responsible for the credit card balance. 

What Are the Benefits of an Authorized User on a Credit Card?

Having an authorized user on a credit card:

  • Limits the debt liability of the authorized user.
  • Allows the account holder to monitor the purchases of the authorized user.
  • Helps the authorized user establish (or repair) credit.

“Allowing someone to be an authorized user gives only benefits to the authorized user — as long as you are paying your bills on time — and you have every bit of responsibility for what that user does,” says Clark.

Final Thoughts

Clark has decided to trust his son with some measured responsibility of using a credit card. Of course, what works for one child may not work for others, so keep that in mind if you choose to add your child to your credit card account as an authorized user.

“You’ve gotta know your kid and how you’d handle it,” Clark adds.

“I have taken a chance at the dynamite, with him being 16 years old and an authorized user on a card. He knows I’m watching,” Clark says of his teenage son.

As for his own protection? “The only protection I don’t have is if suddenly he becomes widely irresponsible,” Clark says. “But again, I’ve got the alerts from Navy Federal, and I know what he’s up to.”


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