Sometimes we get so used to being our child’s caretaker, that we forget to do the things we normally to prepare our children for adulthood. Establishing credit for example. Now this isn’t an easy task for anyone in this economy and for someone without a good income it can become a daunting task. Well, after hours upon hours of research, here are the things I did.

1. I took one of my bank cards – Visa- and added my son as a co signer. They sent him a card with his name on it. Now he uses it to charge purchases at the grocery store, drug store, etc. This does build credit and is already showing up on his credit history.

2. I tried to get him a credit card and found that the easiest ones to get were store credit cards. For example, when it was time to get a new keyboard, we found a music store online and they were willing to give him a credit card for their store. That worked. Department stores also work, but I’ve had problems with some. You have to try whatever stores you shop in.

3. This one takes more time and effort but it does work.

I opened a “secured” credit card for my son. A “secured” credit card is one where you deposit money into an account and that becomes the credit line for that account. So if you deposit $300 into an account, you have $300 to use. As you pay back your loan, your payments are reported to the credit bureaus, thereby helping you to establish credit.

Now, you must be very careful when choosing any kind of credit card, obviously, and a “secured” card is no different. Some cards charge application fees, some charge hefty annual fees, some charge fees to deposit money into the account, some have high interest rates. Believe it or not, some people have gotten secured cards and found their entire limit used up with fees before they ever used the card! So shop around. Your credit union may have a secured credit card available. Remember to ask if they report to the credit bureaus.

The one I joined for my son is called Account Now and the banner is below. You can get all the details by clicking the banner. But here they are in a nutshell. They approve everyone, 100%. There is no credit check. There is no minimum balance that you have to keep in the account. They even throw in a $25 bonus if you set up direct deposit and there is no fee for direct deposit. There is a free online bill paying service.

There are some fees involved, however, and you should read them carefully to be sure this card is for you. It is free to activate the card, but once you do, there is a monthly service charge. The website outlines everything pretty clearly, so take a look before you make a decision, by clicking the banner below.


Now you also have a choice of getting an unsecured credit card. This simply means that there is no collateral necessary so there is no initial layout of cash by you. However, if you have no credit history, you’re probably going to be stuck with a high interest rate, annual fee and other charges. There are many to choose from with different options.

I chose the secured Account Now to start. My son has a part time job and that check can be deposited directly into the account at no cost. Building credit is not an overnight task, so just take one step at a time!

Hope you found this helpful. Now remember, I’m not a banker or accountant. I’m a mom. Shop around and you may find a better deal than I did. If you do, please share it in the comment section below.

Thanks,
Dorothea

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