i thought that minor could not establish credit under any circumstances and that authorized users are simply that-authorized. they simply have permission to use the account and they have no responsibility. it will merely show as on the bureau once they are of age as they are an authorized user - and should not affect the bureau one way or the other.
Yes it does! Its a great way to help young people establish credit. My parents did it for me, and my 3 yr old already has a platinum. This is also a good way to help people with not so good credit to make it better. Still probably a good idea to be the one who physically has the credit card, until the minor is mature and responsible enough.
Keep in mind that its a double edged sword, the authorized user of the account can also harm anyone whos on the account, such as if they have poor late payments or declare bankruptcy that can affect the minor with bad credit as well.
When they've left home and are out on their own, the best way for them to establish their own credit is to apply for department store credit cards, which are relatively easy to get. Since the interest rates are very high, they'll need to be very careful with these! But they will need to use them and establish a good payment record in order to boost their credit rating.
While they are waiting to be able to get "real" credit cards, you may be able to help them out with a check card, which is backed by "real" cash.
My mother did that for me when I was a minor. By the time I was 25yrs, my FICO score was 810. Got a nice rate on a home in California.. And BTW, my mother taught me how to use credit and when not to.
I'm in my early 30s now, I have 3 investment homes (one in Hawaii) thanks to my credit score... Strike that.. Thanks to my Mom