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How old an authorized user has to be really depends on the credit card issuer. Some set the minimum age for an authorized user on a credit card at 13, while others require that an authorized user is 15 or even 16. Many issuers don’t specify a minimum age requirement at all.

In other words, it’s largely up to the adult’s discretion whether a minor seems old enough to become an authorized user. While it can serve as an educational tool and help build their credit, it also can lead to racking up debt and impacting both parties’ credit. You’ll want to make sure you know what you’re getting into in order to determine if it’s the right arrangement for you.

How Old Does an Authorized User Have to Be?

While the minimum age to get a credit card of your own is 18, an authorized user on a credit card can be as young as 13.

That being said, the minimum age for an authorized user on a credit card ultimately depends on the credit card company, as each issuer has its own age requirements. Some set the minimum age to 13 years old, while others may make authorized users wait to get a credit card at 16 or 15. Some credit card issuers don’t specify a minimum age for authorized users on credit cards.

Factors to Consider Before Adding a Minor as an Authorized User

Before you add a minor as a credit card authorized user, consider the following factors.

Whether You’ll Have to Pay a Fee

Depending on the card, you might have to pay an additional annual fee to add an authorized user. The fee might apply per authorized user, or it may cover, say, three users added to your account.

Check with your card card issuer to see if you might get hit with a fee for adding authorized users to your account.

If They’re Old Enough to Handle the Responsibility

Even if you can add an authorized user as young as 13 to your card, doing so might not be in your best interest — or theirs. For instance, a child in their early teens might not have a basic grasp of managing finances, or they might not be mature enough to handle the financial responsibility and abide by basic credit card rules.

If you’re adding your minor as an authorized user to help them establish credit, a few years is enough time for them to be on their way. Plus, should you slip on your credit, it could also impact your child’s credit.

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How You’ll Track the User’s Purchases

Most credit cards don’t issue unique card numbers to each authorized user. That means if you have multiple authorized users on an account, you won’t be able to easily figure out who made which purchases. Before you go ahead with adding an authorized user, make sure you have a system worked out so you’re not stuck covering their spending.

Whether You’ll Give Access to the Card

While you can give an authorized user their own card, you don’t have to, especially if you’re worried about how they’ll spend with it. If you’re strictly adding a child to your card to help them build credit, there’s no need to hand them a card. They don’t need to have access to your credit card number, either.

Steps to Add a Minor as an Authorized User

First and foremost, you’ll want to carefully weigh the pros and cons of adding someone under the age of 18 as an authorized user. If you have decided that you want to proceed, you’ll need to do the following.

1. Educate the Child About Credit Card Basics

Before adding a minor as an authorized user and giving them the privilege to spend on your card, sit them down and walk them through how credit cards work. For instance, you’ll want to explain what a credit limit is, how interest rates work, what one’s financial responsibility is when putting purchases on a card, and why it’s beneficial to build credit.

Recommended: What is the Average Credit Card Limit?

2. Reach Out to the Credit Card Company

Next, you’ll need to contact the credit card company to let them know you’d like to add an authorized user to your card. You can do so by calling the number on the back of the card, or by logging onto your account online.

You usually need to provide the following information about the individual you’re adding as an authorized user:

•   Name

•   Date of birth

•   Social Security number

•   Address (for them to receive the card)

•   Additionally, you may be able to set spending limits or restrictions for the authorized user at this point in the process.

3. Check Your Account

To make sure the authorized user was correctly added, log on to your account on the issuer’s website or through the app. Double-check to make sure the minor’s name and details are all correct. You might also receive an email notification informing you of this change.

The Cost of Adding an Authorized User

Many credit card issuers do not charge a fee to add an authorized user to an account. However, premium credit cards or cards that already charge annual fees, may charge an annual fee for adding authorized users. This fee may apply per authorized user, or you may pay a flat cost for up to a certain number of users.

Beyond this potential fee, there are other costs you could incur by adding an authorized user. For instance, additional purchases made by the authorized user could cause you to rack up a balance. Plus, their activity can impact your credit utilization, which could hurt your credit score.

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Pros and Cons of Adding a Minor as an Authorized User

Here’s an overview of the advantages and downsides of adding a minor as an authorized user to your credit card:

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Pros

Adding an authorized user can have the following benefits:

•   Helps to build credit: A major upside of adding a minor as an authorized user is that it will help them establish credit at a young age. They’ll have a more firm financial footing as a result.

•   Allows you to earn more rewards: Another person making purchases on your card means there’s greater potential to earn more rewards. You can more quickly than if you would if you were the sole user.

•   Serves as an educational tool: If you take the time to teach them, adding a minor as an authorized user to your card can help your child learn credit basics and how to manage credit card debt.

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Cons

Beware of the potential downsides of having an authorized as well:

•   May cause you to rack up debt: It can be easy to rack up debt and overspend on the credit card with an authorized user. This is especially possible if you’re giving a child access to your card who is still wrapping their head around financial basics.

•   Can’t easily track who is making the purchases: Because purchases aren’t tracked by the authorized user, it might be tough to figure out which person was responsible for which transaction with your card. This is particularly tricky when you have, say, a joint account user and several authorized users.

•   Can impact credit of both primary cardholder and authorized user: If having several users on your card equates to carrying a higher balance, that can up your credit utilization ratio. As credit usage makes up 30% of your credit score, you’ll want to keep that ratio under 30%. Beyond potentially hurting your credit, also know that any irresponsible credit behavior on your card can hurt your authorized user’s credit. For instance, if you are late on a credit card payment, both your credit and the credit of the minor you added to your card can suffer.

Recommended: When Are Credit Card Payments Due?

Tips for Managing a Minor as an Authorized User

If those possible downsides are making you nervous, here are a few things you can do to ensure your minor uses their privileges responsibly:

•   Set limits. Talk to your child and give them an amount they can spend on the card each billing cycle. Also, determine if they’ll be responsible for helping you pay off their share. Or perhaps you might consider an alternative arrangement, such as doing chores around the house to cover purchases they made on their credit card. Hash this out beforehand.

•   Treat the card as a teaching tool. Sit down with your child and go over basics of a credit card, such as how interest fees work, how to read a billing statement, and what can happen if you’re late or miss a payment. You’ll also want to teach them how repayment works.

•   Set alerts. To keep an eye on your child’s spending, consider setting alerts on your credit card. You can set it up so you get notifications for transactions over a certain amount, or any transactions made online, in person, or over the phone.

Recommended: Tips for Using a Credit Card Responsibly

Removing a Minor as an Authorized User

Removing a minor as an authorized user from a credit card is a relatively simple and painless process. To do so, you call the number on the back of the card and let them know the name of the person you’d like taken off. If you have several authorized users on a card, be sure to specify which card user you’re removing.

It’s not a bad idea to leave a paper trail and send a letter to the credit card company reiterating that you’ve requested the change over the phone.

The Takeaway

The minimum age for an authorized user on a credit card varies depending on the credit card issuer. Some require an authorized user to be 13, while others set the age limit at 15 or 16, or even have no formal limit at all.

While you can add a minor as an authorized user on a credit card, you’ll want to carefully weigh the pros and cons before doing so. If you decide to add a child as a user, set some ground rules and teach them credit and financial basics beforehand.

Looking for your next credit card? If you get the SoFi Credit Card, you can earn generous cash-back rewards on all purchases.

FAQ

Do some issuers allow authorized users with no minimum age?

Usually the minimum age requirement to add an authorized user to a credit card is at least 13. However, there are several credit card issuers that don’t note a specific minimum age.

How many authorized users can I add to my account?

It depends on the credit card issuer. Some allow up to four, while others allow up to seven. Some credit card issuers have no limit as to how many authorized users you can add to a credit card. The number of authorized users might also depend on what type of card it is, such as a rewards or travel credit card.

Is an authorized user relationship or a joint account holder better?

It depends on what kind of privileges you want the additional card user to have and the reason you’d like to add them. If you want to help boost someone’s credit and not have them responsible for making payments, then an authorized user could be the better route. If you’d like the user to be equally responsible for making payments and have access to make changes on the account, a joint account holder might make sense.

Photo credit: iStock/Manuel Tauber-Romieri

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


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Your credit card statement can feel like information overload with all of its numbers and terminology. Understanding the definition of terms like outstanding balance, statement balance, and billing cycle can help you to navigate this monthly statement a little more easily.

So what is an outstanding balance, how is it different from a statement balance, and can it affect your credit score? Put simply, the outstanding balance on a credit card is what the amount of money you still owe to the credit card company is called. Knowing this figure is important to avoiding interest and potential effects on your credit.

What Is an Outstanding Balance on a Credit Card?

Outstanding balance is another way to express current balance. In fact, depending on your credit card issuer, your monthly statement and mobile app may use the term “current balance” instead of “outstanding balance.”

But what is an outstanding balance in credit card terminology? A credit card outstanding balance is simply the amount of money you have not paid to the credit card issuer — i.e., it’s what you still owe.

Your outstanding balance includes any purchases you have made on your credit card but have not yet paid off (from the current and previous billing cycles), but it also includes:

•   Interest earned on previous balances

•   Balance transfers (and any balance transfer fees)

•   Cash advances

•   Any other fees you may owe, like late fees or foreign transaction fees

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Where to Find Your Outstanding Balance on a Credit Card

You can check your outstanding balance by calling your credit card issuer or accessing your account online or through the mobile app. Depending on the terminology the company uses, you may see the outstanding balance listed as your current balance or simply your credit card balance.

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Current Balance vs Outstanding Balance

Current balance is simply another term for outstanding balance. Depending on your credit card issuer, you might see one term or the other used. In some cases, it may simply be labeled “account balance” or “credit card balance.”

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Statement Balance vs Outstanding Balance

So what’s the difference between a credit card statement balance and outstanding balance? Your credit card statement balance is the total amount owed after a billing cycle. It can include any purchases made during the billing cycle, plus any balance, interest, and fees carried over from the previous billing cycle.

Once issued, the statement balance amount does not change, even if you continue to swipe your card for more purchases during the grace period (this is the period between statement closing date and due date, during which you won’t earn interest on your unpaid statement balance). As long as you pay off the statement balance in full by the due date, you should not accrue any interest.

Your outstanding balance encompasses everything you owe at a specific moment in time. Sometimes your outstanding balance can be higher than your statement balance; sometimes it may be lower. Consider this example:

Your billing cycle ends, and you now have a statement balance of $1,000. In the next week, you spend $500 more with your credit card. Your statement balance remains $1,000, while your outstanding balance grows to $1,500. But as long as you pay that $1,000 statement balance by the due date, you will not incur any interest — and your statement balance will drop to $0 until the end of the next billing cycle.

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Remaining Balance vs Outstanding Balance

Remaining balance refers to whatever amount is still due after you’ve made your monthly credit card payment. For example, if your statement balance is $500 but you only pay $300, your remaining balance is $200. This, along with the interest it accrues, becomes a part of your outstanding balance.

You can avoid accruing interest on a remaining balance by paying off your statement balance in full each month rather than only the credit card minimum payment.

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What Is an Average Outstanding Balance?

The typical amount of an outstanding balance can vary widely from person to person — it all depends on how much you use your credit card, what your credit limit is, and whether you carry a balance. That being said, your average outstanding balance is simply the amount you owe on a credit card, averaged over a certain period of time.

The average outstanding balance formula for a statement period would be the total of your balance for each day of the statement period, divided by the number of days in the cycle. This can be helpful to know given most credit card issuers calculate interest on a daily basis, based on your average daily account balance.

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Paying Your Credit Card Outstanding Balance: What to Know

The nuances of credit card balances can be tough to nail down, but understanding how they work — particularly outstanding balances — may help you avoid interest and impacts to your credit score.

Here’s the short version:

•   Paying the minimum balance due each month will help you avoid late fees and negative marks for late payments on your credit report.

•   Paying the statement balance in full by the due date will keep you from accruing interest.

•   Paying down the outstanding balance, or current balance, even outside of your normal payment cycle, can reduce your overall credit utilization, which influences your credit score.

How Interest Contributes to Outstanding Balances

When you make purchases with your credit card throughout a billing cycle, the card issuer has lent you money to cover the expenses. And if you don’t pay the lender the statement balance in full by the specified due date, any remaining balance will become part of your outstanding balance — and it will start accruing interest.

The best way to avoid paying credit card interest is to pay your statement balance in full by each due date.

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How an Outstanding Balance Affects Your Credit Score

When you carry over unpaid balances, you’ll do more than earn interest that you have to pay. You’ll also increase your overall credit utilization, which is the amount of your total available credit you’re using. That’s because your outstanding balance counts toward your credit limit.

For example, if your credit limit is $5,000 and your outstanding balance is $2,500, you’ve utilized 50% of your credit limit. In general, creditors prefer to see a credit utilization of 30% or lower. This signals to them that you can responsibly pay back your debts.

In fact, credit utilization is the second most important factor affecting your FICO credit score. It accounts for 30% of your overall credit score. Thus, carrying a high outstanding balance regularly can adversely affect your credit score.

For this reason, experts typically recommend paying off your full statement balance every month if you’re able. And if you make a large payment on your credit card during a billing cycle that increases your outstanding balance tremendously, you may want to pay it off early to reduce your credit utilization — or else you chance a drop in your credit score.

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The Takeaway

Credit cards can be confusing, especially when you’re new to the terminology. But once you understand how your statement and outstanding balances work and can responsibly make payments in full and on time, credit cards can be a great tool for boosting your credit score.

FAQ

Does outstanding balance mean past due?

Having an outstanding balance does not necessarily mean it’s past due. Your credit card requires a minimum monthly payment; if you have satisfied that payment, you do not need to immediately pay your outstanding balance. But keep in mind that you generally need to pay the full statement balance each month to avoid accruing interest.

How do I clear the outstanding balance on my credit card?

To clear the outstanding balance on a credit card, you can make a payment equal to the amount. This should bring the balance down to zero. However, you do not always have to pay your outstanding, or current, balance to avoid interest. Paying your monthly statement balance in full should keep you from accruing interest, even if your outstanding balance is higher.

Why is my outstanding balance negative?

Your credit card outstanding balance can go negative if you pay off the card and then receive a credit for a returned item or claim cash-back rewards from your purchases. If you want, you can request a check from the credit card issuer in the amount of the negative balance. Or, you can apply the negative balance on a credit card toward future purchases on the credit card.

Photo credit: iStock/SARINYAPINNGAM

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


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As crypto credit cards gain popularity, it’s becoming critical to understand how crypto credit card rewards are taxed. In some cases, crypto credit card rewards are considered a rebate on spending and therefore not taxable. But in other cases, the cryptocurrency you earn with a credit card may be taxable.

In either case, it’s important to keep in mind that you’ll also pay tax on any gains you make when selling the cryptocurrency you earned as credit card rewards. Keeping good records is important to ensure you accurately pay taxes associated with crypto credit card rewards.

What Is a Crypto Credit Card and How Does it Work?

There are several different kinds of crypto credit cards, and each one might work differently. The most common type of crypto credit card is one that will earn crypto rewards instead of cash back or travel rewards. You might earn cryptocurrency as part of a welcome offer, or on every purchase, or both.

Outside of the involvement of cryptocurrency, crypto credit cards otherwise don’t diverge from how credit cards work usually. Cardholders are extended a line of credit they can borrow against, and they’ll pay interest on balances that carry over from month to month.

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What Are Crypto Credit Card Rewards?

Crypto credit card rewards are a type of credit card reward that you can earn with a crypto credit card. Crypto credit card rewards are similar to cash-back rewards or airline miles that you might earn with a different type of credit card.

With many crypto credit cards, you earn a certain cash percentage with each transaction (e.g. 1.5% back). But instead of getting the actual cash back, the rewards you earn are converted to the applicable cryptocurrency.

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Are Crypto Credit Card Rewards Reported as Income?

The IRS has stated that income generated from any source must be reported on your tax return. That being said, the IRS has also given guidance that most credit card rewards are considered a rebate against spending rather than taxable income.

While most credit card issuers do not issue a 1099 form for credit card rewards, some may. If you receive a 1099 form, you will probably want to report the amount as income, or contact a tax professional for advice.

Are Crypto Credit Card Rewards Taxable?

The IRS has generally given guidance that most credit card rewards are considered a rebate on spending, and therefore not taxable. However, any gain you realize from the cryptocurrency that you earn as crypto credit card rewards is taxable.

If you receive cryptocurrency as a credit card reward, typically your cost basis will be the fair market value of the coins on the date you earn them. That means if and when you sell them, you’ll have to pay tax on the full crypto redemption amount minus your cost basis.

Do You Have to Pay Taxes on Crypto Credit Card Rewards?

Whether or not you have to pay taxes on crypto credit card rewards depends on how you receive your rewards. While the IRS has not ruled definitively on crypto credit card rewards, you may want to consider how the IRS treats non-crypto credit card rewards, like cashback, points or miles.

Generally, one of the credit card rules that the IRS has held is that rewards earned as part of spending are considered a rebate against that spending, and therefore not taxable. However, if you receive a reward (like a sign-up bonus) without having to make any purchase, that may be considered taxable income.

When Are Crypto Rewards Taxed?

In some scenarios, crypto rewards are taxable, while in other cases they are not. If you’re not sure if or how your crypto rewards should be taxed, consult with a tax professional.

When Crypto Are Taxable

If you receive cryptocurrency as part of a sign-up bonus where you did not have to make any purchase to earn that bonus, the cryptocurrency you receive may be considered taxable income.

You also will have to pay capital gains tax when you sell any cryptocurrency, even if you got it as a reward from a crypto credit card. The crypto rewards that you receive from a credit card generally will have a cost basis of the fair market value of the cryptocurrency on the date you receive the rewards. That means that when you sell, you’ll pay tax on any increase in the value.

When Crypto Rewards Are Not Taxable

Generally speaking, any credit card rewards that you receive after making a purchase are considered a rebate against that purchase. That means that in most cases, you won’t need to pay income tax on these rewards. However, you would still need to pay tax on any gains you make when you sell the crypto you earned as a crypto credit card reward.

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Can You Protect Yourself from a Crypto Tax Audit?

While there’s no strategy that will completely eliminate the chance that you’ll be audited, there are a couple things you can do to help minimize your risk:

•   Make sure that you include any income or information that you receive via an official IRS form, like a 1099-MISC form.

•   Keep detailed and accurate records of all of your cryptocurrency transactions. That will minimize your chances of being audited as well as any interest or penalties you might have to pay if you are audited.

How to Know If You Owe Taxes on Crypto Credit Card Rewards

If you receive cryptocurrency as a bonus without a purchase as a credit card requirement, it will almost certainly be classified as taxable income.

Another indicator to know if you owe taxes will be if you receive an official IRS form like a 1099-MISC. Any income on such a form is reported to the IRS, so you’ll want to declare it on your return or indicate with your return why you are not declaring it.

Finally, remember that you will owe tax on any gains you make when selling cryptocurrency, including crypto that you got as a credit card reward.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score

The Takeaway

Generally, the IRS has provided guidance that credit card rewards earned as part of a purchase are considered a rebate related to that purchase. Rebates on purchases generally are not considered taxable income. On the other hand, any cryptocurrency that you receive as a bonus without making a purchase in order to earn it may be considered taxable income. Consult your tax professional for advice if you’re not sure whether you should pay taxes on crypto credit card rewards.

If you’re looking for a new credit card, consider the SoFi credit card. You can earn unlimited cash-back rewards, which you can use to invest in fractional shares, redeem for a statement credit, or meet other financial goals you might have, like paying down eligible SoFi debt. Learn more and consider applying for a rewards credit card with SoFi today.

FAQ

Are crypto credit rewards payouts or rebates?

Whether or not crypto credit rewards are considered a payout or rebate depends on how you earn them. Generally, the IRS has held that credit card rewards received as a result of spending are considered rebates. On the other hand, if you receive crypto credit rewards or any other type of credit rewards without making a purchase, that may be considered income.

Are crypto credit rewards considered virtual currency?

IRS Notice 2014-21 does mention that cryptocurrency (such as Bitcoin) is considered a convertible virtual currency. There are certain tax laws and regulations that deal with virtual currencies, so you’ll want to be aware of that if you receive crypto credit rewards or purchase crypto with a credit card.

What will the IRS do if I do not get audited for my crypto credit card rewards?

The IRS manages tax compliance primarily through taxpayer audits. While the IRS does not publish the criteria it uses to determine who gets audited, there are a few things that you can do to minimize your chances of being audited. But even if you haven’t been audited yet, you may not be out of the woods — the IRS can go back several years in the past. The best thing to do is make sure you keep good records and fully record and report any income that you earn.

Photo credit: iStock/Delmaine Donson

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.


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