Why You Shouldn’t Add Your Child to Your Credit Card

A common financial hack that you might see on TikTok or YouTube is to add your child as an authorized user on your credit card to help them build their credit score. This might sound like a good idea, but it could actually backfire and hurt your child’s future credit. And the benefit of doing this may not be significant.

You see, some of the first things that your child will do after college are maybe buying a car, getting a credit card, or even buying a house if they are doing really well. But your credit score is not the most important factor for someone who is 22 or 23 years old. The main thing that lenders care about is your income, your debt, and your payment history. They want to see how much money you make, how much debt you have, and how reliable you are at paying your bills on time. What they care about is how long heave you had a steady income and a good track record of paying rent on time.

But one thing that might raise a red flag for them is if your child has a bad credit history because of your credit card. Let’s say you added your child as an authorized user on your credit card, but then you ran into some financial trouble and had to max out your card or miss some payments. That would damage your child’s credit score, because they share the same account with you. And they don’t have any other credit history to balance it out, like mortgage payments or other debt payments. All they have is that one card that you put them on, and it has a terrible history because of something that was out of their control. Sometimes, you can’t control what happens to your income.

So please, don’t set your kids up for failure. Let them build their own credit scores, let them handle their own finances, because the benefit of adding them to your credit card may not be worth the risk.