21 Jan Should I get a joint credit card with my grandson?

Q. My grandson will be starting college next year. I see on my own credit report that the length of time with a credit line is a factor in the score. What do you suggest he should do to start his credit history? I have offered that we get a credit card together, but would he get the benefit of the history also?
— Grandma

A. It’s great that you’re trying to help your grandson.

And you’re correct. Time is one of several factors in calculating one’s credit score.

The only way to “start” someone’s credit history is to obtain a loan or other debt account, such as a credit card, said Ken Van Leeuwen, a certified financial planner with Van Leeuwen & Company in Princeton.

He said a credit card is typically the easiest and most straightforward way for a person to start building their credit.

Of course, how the credit card is used, including keeping a low balance and making timely payments, are important factors in helping a cardholder build a positive payment history and thus build their credit score, he said.

If you opened a credit card together, you’d both benefit assuming you keep a low balance and make payments on time, he said.

However, the opposite is also true.

“If the card is frequently maxed out or if payments are missed or not made on time, it will affect both your credit scores negatively,” he said.

An alternative to a joint credit card would be co-signing for a credit card in just your grandson’s name, Van Leeuwen said.

“Instead of being a cardholder on the account like you would be with a joint credit card, you essentially vouch for your grandson as the sole account owner and you are responsible for making payments on the card if your grandson was unable to,” he said.

One more option would be to add your grandson as an authorized user to one of your credit card accounts. He’d benefit from the length of time you’ve had the card as well as your payment history, assuming it’s a good one.

Whichever way you go, make sure you both understand the responsibilities and potential risks.

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This story was originally published on Jan. 21, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.