To get a credit card for 21yo?!

[Blueeberry]

Is it possible? DD is heading off to uni in September and would like a low limit credit card. She’s sensible - would be useful for emergencies but primarily would like to use instead of her debit card and then just pay it off at the end of each month. I think it would be a useful way of keeping track of her spending, alongside building her credit score & earning air miles (she’s a frequent traveller). Having travel insurance included would also be a huge bonus and save money in the long run.

Her earnings are around £8k/year from her part time job alongside her student loan and a £5k course specific bursary. Is it a possibility at all or am I looking for some sort of unicorn card?

I am not an expert, but I'd say be careful. While it's a good way to build credit, she may not be eligible on that income, and being rejected (or applying multiple times) could hurt her credit score.

https://www.moneysavingexpert.com/credit-cards/your-first-credit-card/

At 21 she should be getting her own credit card, and no way should her parent be "keeping track of her spending"!

Yep - she is an adult and responsible for her own finances.

She's 21... firstly she needs to be in control of her own finances. Her parent should not be keeping track of her spending (unless some underlying learning disabilities or something you haven't mentioned).

Secondly, if she can't manage her finances without her parent checking up... she definitely should not have a credit card.

Does OP mean for her to keep track, or her daughter?

I do all my spending on an AMEX to bank the cashback. I pay it in full every month. It’s great. Not sure it would have suited me at uni but that’s up to your daughter to figure out.

She will.ne paying interest every month though so what would be the point in that ? I always advise my adult children against credit, not for it. And none of them have any debts at all as they all prefer to live within a budget rather than get into debt which is a slippery slope.
Instead help her devise a weekly budget that she can stick to. That way she can afford things and have fun within limits, without getting into debt.

Many credit cards offer a student versions

It's good to have a credit card to build a credit history but I don't think the time when they start University is the best time to be doing it. There will be a lot of financial pressure on her as well as peer pressure and she could end up spending more than she can pay off especially if she is living out of the family home.

My DS has just got his first credit card at 18 but he works full time earning good money and still lives at home. He will only be using it for petrol and paying it off at the end of the month. It's to build his credit score for when he wants a mortgage.

I don't understand the keeping track of money part of OPs post as you can do that just as easily with a bank account.

@Amira83
She will.ne paying interest every month though so what would be the point in that?

OP says that she would pay it off in full every month, so where would the interest be coming from? I have never paid interest on my credit card purchases.

ETA: It might be too tempting for a 21 year old not to use it irresponsibly!

There is a (probably apocryphal) story about Eric Clapton where somebody admired his jacket and asked whether it was expensive. His reply was "I paid for it with a credit card so it was free"

I don't think that poster understands how credit cards work.

When I used to be a student banking officer there was a student credit card as part of the student banking bundle. They only had a small credit limit of £500.

Your advice isn’t actually very sound. For a start there’s no interest if you pay off the full amount each month and building up a good credit score is important for adults. In addition, with a cc you get brilliant consumer protection for big purchases like white goods and without a cc you can’t hire a car.

You don’t pay interest if you pay it off every month.

Taking out a credit card at 21 is a really smart move. Even if you rarely use it. If you ever buy any service or item over £100, then paying for some or all of it on a credit card gives you fraud protection. It does help build your credit rating, and you can do pre-eligibility checks to reduce the risk of being rejected.

there are student credit cards she would qualify for, she won’t be earning air miles with them, but it would be a good way to build up her credit rating and they tend to have around a 500 limit.

Just a thought OP with you mentioning airmiles were you thinking of adding her to your card as an additional card holder? If you do this it doesn't necessarily build their own credit rating you would have to check with the particular credit provider how they share additional card holder information with the credit reference agencies.

This is really weird. By the time mine were 21 I had zero input to their finances. Why are you asking MN what you should do here? Surely your DD can make her own decisions?

I encouraged both my kids to get a credit card when they were 18. Good way to build a credit score but I emphasised that they pay the full balance each month so no interest charges were paid. They both have a Tesco credit card and started with a £250.00 credit limit. My DS has had his for nearly 5 years now and has always paid the balance in full every month. His credit limit is now £4000. My DH never had a credit card until he met me. You get so much more protection than paying with a debit card.

I had a credit card when I was at Uni. It was with my bank and had a small limit of around £300 to £500.

My dc have all had credit cards at 18/19. They oay thr balance off by dd each month so don't incur any charges.

Exactly the same here, advised they got them at 18, they got the Tesco ones.

several years on it’s been a success- paid off each month and they get rewards and consumer protections.

Ive had credit cards for forty years and never paid any interest, I’ve taken advantage of the positives and had some great benefits though.

Further to my previous post Tesco credit cards can be linked to a Tesco club card so you can earn points anywhere you use the credit card. I have a Tesco credit card as well as my kids and usually get around £30 every 3 months in club card vouchers.

Er she means for the daughter to keep track..
#comprehension skills

A lot of banks used to offer interest free overdrafts to students. My years 1 was 1500, year 2 1000 then year 500 so it tapered down. Worth looking into as really helpful if needed, not sure if banks still do them

She meant for the daughter to keep track of her spending. OP didn't imply SHE was going to do it.

Without being unnecessarily pedantic OPs use of "To get a credit card for 21 year old" and "am I looking for some sort of unicorn card" does somewhat imply OP will be the one organising and applying for the card on her DDs behalf and therefore be somewhat involved in the card at least initially so I don't think it was a massive leap to make.