Should you get a credit card in high school?

Should you get a credit card in high school?

Every time I go to my local bank to make a deposit into my checking account, the bankers constantly try to sell me on opening up a credit card. Despite being an unemployed 18 year old in high school with no major income whatsoever, they still attempt to rationalize that a “small limit” credit card would be beneficial to me.

Nonsense, right? Why not pay with cash or money you know you have in your checking account? Moreover, who wants to take on credit card debt before they graduate high school?

Having conducted some research, I finally understood why banks push for students to open up credit cards and how it can help your financial future. If done correctly, a credit card will open the door to financial opportunities that others our age may not have until later.

In short, banks want us to start building credit. This means establishing a credit score – a number that indicates how well you can repay lenders when you take out a loan. If you decide to open up a credit card at a young age, chances are you will be given a very small spending limit. If that limit is somewhere around 200 dollars a month, then you can make normal, everyday purchases on credit. Then at the end of the month you can pay your bill in full and it will not cost extra. On the flip-side, if you decide to pay your credit card bill in payments, your credit score can actually increase if you make all of your payments on time. This is due to your ability to pay back money you owe in a timely manner.

If you can establish a decent credit score, lenders will be more likely to give you loans on big purchases that inevitably come up in life. You can start financing your first new car or even put a down payment on a new property. The goal is to build trust with banks so you can do these things.

Furthermore, there are other hidden benefits of being financially savvy with your credit. One day when you finally have a sufficient career that yields a larger income, you can apply for specialty credit cards that provide ridiculous (and awesome) benefits that most people don’t even know exist.

In high school, most credit cards are basic and only provide the essentials. They allow us to have a minimal spending limit that we can pay off every month. It is simple and free. That is really all we need at this age, but building credit now will allow us to get unique credit card benefits later on in life. The benefits and features of these specialty cards are extremely attractive and beneficial to certain lifestyles.

The first credit card in question is the JP Morgan Palladium Card and yes, it is made out of solid palladium. Despite the $595 yearly fee just for owning this card, it does come with a few key benefits that are well worth the money. The first thing you get is a private concierge banker at your service at all times. Your money management will be done by this banker and they are there to accommodate all of your immediate needs. Next to that is a 24/7 general concierge that will make any reservation for you, organize travel plans, and set up big purchases you want to make. If that isn’t convincing, this card will upgrade any United plane ticket to first class and will grant you access to private airport lounges. The card has essentially no limit, and it has great reward benefits. It’s a card that you buy a Lamborghini with, then use the reward points to upgrade the wheels.

Next on the list is the American Express Platinum Card. Minus the personal banker, you get all of the same benefits as the JP Morgan Card plus a few extras. At the AMEX airport lounges, you gain access to complimentary buffets that are set up daily by professional chefs, and you get more first class options on flights. They also waive all international transaction fees, making it easy to pay abroad. The AMEX card also comes with a heritage of prestige and image, as many wealthy people are known for using these cards.

Unfortunately, these cards are extremely hard to attain and are set aside for exclusive high net worth clients. That being said, starting out small now may make you a bit more likely to attain such credit cards when you’re older.

So the next time a bank tries to give you a credit card, give it a try and learn how money and credit works. Just imagine all the free buffets, flights, and dinner reservations they offer, and how this one credit card is getting you one step closer.