Set rules when adding child to your card for foreign travel
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Dear Opening Credits,
My super-responsible 15-year-old son will be traveling through Europe for three weeks this summer with a performing group. We want to make sure he has the access to funds he might need. Can he be an authorized user on one of our credit card accounts? Is this the best method for money access for him? We were thinking a card with a chip for added security. – Kristi
Your child sounds like just the kind of teenager who would wield a credit card wonderfully.
In general, providing authorized user status is a wise way to ensure a minor can cover expenses while abroad, and it has additional benefits. He will learn how to handle credit products early, prepping him for the future. It’s convenient, too. If a financial emergency comes up, he can handle it without needing to contact you. Credit cards also are better than cash when one is traveling. If money is lost or stolen, it’s usually gone for good. Plastic can be replaced, and unauthorized transactions can be reversed.
Most credit issuers allow credit card owners to add any number of authorized users to the account. To begin, just call your card issuer and explain what you want to do. Make sure you tell your issuer that the card will be used in Europe so the card can be upgraded with the correct computer chip technology. Otherwise, consider opening a travel card that is universally accepted specifically for this purpose. Also, make sure that the card you make him an authorized user on a card with no foreign transaction fees. Those fees (usually around 3 percent) can quickly add up.
When the card bearing his name arrives in the mail, he’ll be able to activate the card it online or over the phone. Once done, charging may commence.
But wait. Just because he can doesn't mean he should – at least not immediately. As responsible as your son may be, chances are he doesn't know how to charge safely and in a way that will protect your credit rating. Therefore, educate him on smart credit card use, and then review your personal guidelines.
First, here is what your son should know about his new credit card:
- All activity with this account will appear on your credit reports as well as his. If the balance remains low and the payment pattern is perfect, you and he will experience a credit score boost. The reverse is also true. High debt and missed payments will negatively impact both cardholders’ credit ratings.
- As the account owner, you have the right to revoke card privileges at any time, for any reason.
- He may remove himself as an authorized user whenever he wishes.
- Any debt that he or you get into with the card is the legal responsibility of the account owner. If the balance does go delinquent, the issuer cannot pursue him for reimbursement. Nor can the issuer sue your son for damages.
And now the guidelines. These are yours to establish, but here are a few that I strongly recommend:
- Spell out what the card may be used for. If you are OK with him charging everything he wants, fine. Say so. But if there are restrictions, explain what they are. For example, perhaps the card should be used only for food and other necessary supplies. Be clear. The brightest of teens can be confused as to what “essential” means. Treating the entire band to American-style pizza may not be something that is acceptable to you, yet technically it falls under the “food” heading.
- Tell him if you expect to be repaid for certain charges. The credit card issuer can’t collect from him, but you can.
- He must keep the card in a safe spot and never share it. Remember, this is your account. And while you can dispute fraud, it is a process best avoided.
- Keep abreast of all credit card activity. Since you're the owner, you should monitor account usage, but he also should be aware of how much he is spending and notify you if a charge will be especially large. You don't want to hit the grocery store planning to use that particular credit card only to discover that it is maxed out!
Happy and safe travels to your son!
See related: 5 questions every authorized user should ask
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