BACK

Your Business Credit

Is it OK for merchants to accept credit cards from minors?

Summary

If a parent has formally authorized a minor to use a credit card, accepting it isn’t a problem. But getting some reassurances in writing is best practice

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Dear Your Business Credit,
Can I accept a credit card payment from a minor at a medical facility if it’s offered? — Mitchell

Dear Mitchell,
I’m going to assume that you work in a medical practice, and the reason you are asking this is to avoid accepting payments that are invalid.

If you have obtained the parental consent that’s necessary under laws in your state to treat the minor, or the minor is an emancipated youth, accepting a credit card the young person is legally authorized to use isn’t likely to present a problem, according to Robert F. Brennan, an attorney in La Crescenta, Calif., who specializes in wrongful credit damage cases, as well as identity theft cases.

If a minor incurs a medical charge and later does not pay the credit card bill, then collecting it becomes the credit card issuer’s problem, he notes. “The doctor already has his money,” he explains.

Ultimately, if a minor can’t cover the debt, it is likely to become a parent’s problem. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card issuers are not allowed to issue credit cards to young people under age 21 unless a parent is a co-signer — meaning the parent has assumed responsibility for the debt — or youthful applicants can show independent proof they have the income to pay the bill. What’s more likely is that a young person who proffers a credit card is an authorized user, legally able to use the card, but not liable for the debt. Authorized users may have cards issued in their own names.

“It is extremely unlikely and rare that a minor would have a credit card without a guarantor or co-signer on the account, which would be the case if they are an authorized user on their parent’s account,” says Leslie Tayne, an attorney based in Melville, N.Y., who advises small businesses on credit and debt. “If there is a guarantor on the account, then the debt is collectable.”

To be on the safe side, I’d steer clear of accepting any cards for which a patient may be an unauthorized user — such as a card issued to another family member. While a teen who hands you a parent’s credit card likely may have the OK to use it, you can’t know that for sure unless the parent has told you so, either by phone or in person.

Generally speaking, medical providers protect themselves from nonpayments if they treat a minor by having a separate contract with the parents, according to Michael Jeffrey Gunderson, a bankruptcy attorney at Gunderson & Tharp LLC in Chicago. “Most providers know they can’t hold a minor liable, so they get the parents on the hook,” he says.

If you don’t have an agreement like this for parents to sign, now is a good time to have your attorney draft one.

See related:Choosing a credit card processor for a medical practice, Can a doctor’s office charge a credit card surcharge?

What’s up next?

In Your Business Credit

How soon should retailers switch to EMV?

The heat is on for merchants to adopt terminals that will read smart-chip cards. But with many small firms facing rising costs from all sides, it may pay to wait to upgrade

Published: March 24, 2014

See more stories
Credit Card Rate Report Updated: August 14th, 2019
Business
15.55%
Airline
17.50%
Cash Back
17.63%
Reward
17.50%
Student
17.69%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.