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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 (SoFi requires an authorized user to be age 15 or older). 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 particular type of credit card and issuer, you might have to pay an additional annual fee to add an authorized user. For example, the Chase Sapphire Reserve card currently charges a $75 fee to add an authorized user.

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.

Recommended: How to Avoid Interest on a Credit Card

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 (unless you want to).

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.

Recommended: What Is a Charge Card?

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:

Pros

Adding an authorized user can have the following benefits:

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

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

•   Serves as an educational tool: You may find that adding a minor as an authorized user to your card can help them learn credit basics and how to manage credit card debt, especially if you coach them through the process.

Recommended: Can You Buy Crypto With a Credit Card?

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 additional 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%, preferably closer to 10%. 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. Before adding 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.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

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, say, between four and seven, while others 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 build 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.

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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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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 .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Building good credit (or any credit at all) doesn’t happen overnight. Instead, if you’re starting from scratch, you may need to have an open credit account for around three to six months before you first get a credit score.

From there, a good credit profile and good credit score can take a while to build. In reality, it can be much faster and easier to lower your credit score, which is why it’s vital to aim to make solid financial choices, like consistently paying your bills on time. Building and maintaining good credit isn’t always easy, but by following a few simple steps, you can improve your standing.

How Long It Can Take to Build Credit From Scratch?

The exact length of time it takes to build credit from scratch varies. That being said, it’s usually around three to six months from the time you first open a credit account.

Even though establishing and building credit can take time, it’s worth it as a way to improve your overall financial situation. Having good credit can make it easier to get approved for loans and secure lower interest rates.

Recommended: How to Avoid Interest on a Credit Card

4 Ways to Build Credit

If you’re hoping to begin building credit, here are some tactics you might consider.

Become An Authorized User

One way to help build your credit is by becoming an authorized user on an account of someone who already has good credit. This might be a trusted friend or family member. As they manage the account responsibly, that can have a positive impact on your credit score as well. Just know that if they miss or make late payments, that can also negatively impact your credit.

Recommended: When Are Credit Card Payments Due?

Apply For a Credit Card

If you’re getting a credit card for the first time, know that it is possible to apply for and get approved for a credit card with no existing credit history. However, you do need to be selective about which card you apply for.

You’re unlikely to get approved for, say, a rewards credit card if you don’t already have excellent credit. Still, there are credit cards that are marketed toward those who have no credit or a limited credit history. You might also consider a secured credit card, where you put down a refundable deposit that then serves as your credit limit.

If you can get approved for a credit card, and then use your credit card responsibly, such as by making on-time payments, can help you build up your credit.

Recommended: What to Know About Purchase Interest Charges on Credit Cards

Get a Cosigner

If you aren’t able to get approved for a loan on your own, you might consider applying for credit with a cosigner. Using a cosigner with good credit can help improve your chances of getting approved for a loan.

Then, your loan payments will be reported to the major credit bureaus and hopefully help you start building your credit score. Of course, that depends on your making those payments on time.

Maintain Good Credit Habits

Once you have opened a credit account like a loan or credit card, it’s important to practice good credit habits. This includes paying your statement off in full, each and every month. Demonstrating a pattern of reliably paying your bills over time shows potential lenders that you’re likely to repay your debts.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

Factors That Affect Credit Score Calculations

There are five major factors that affect your credit score:

•   Credit utilization: Your credit utilization is the amount of the credit you’ve used compared to your total available credit. It’s recommended to keep this ratio to 30% or less.

•   Payment history: This indicates how reliably you make payments on your existing accounts.

•   Types of credit accounts: Having a good mix of different types of credit accounts has a positive impact on your credit score, as it indicates to lenders that manage multiple types of accounts.

•   Your average age of accounts: Having a lengthy credit history is a positive sign. This shows you have experience in responsibly managing accounts.

•   New credit: Opening a number of accounts or making a number of hard inquiries in quick succession can suggest to lenders that you’ve overextended yourself and are in need of funding to bail you out.

Recommended: Starting Credit Score for 18-Year-Olds

Things to Keep in Mind Before Building Credit

If you’re looking to build good credit, here are some tips on establishing credit to keep in mind.

Have a Solid Financial Plan

The first thing you’ll want to do is make a budget. Getting a new credit card should not be viewed as a way to fix your budget or dig yourself out of a financial hole. Instead, the best way to use a credit card is as a tool of convenience for money that you already have. Make sure that you have the financial ability and discipline to pay your bills in full, each and every month.

Watch Out For Scams

Usually building credit is something that you do over a period of several months or years. If someone tells you that they can build or repair your credit quickly, it could be a sign of a credit card scam. There aren’t many shortcuts to the simple rules noted above, like regularly paying your bills on time.

Don’t Open Too Many Accounts At Once

You might think that since opening a credit account can help build credit, opening many accounts will help build credit even faster. However, that is usually not the case. Many lenders view a high number of credit inquiries in a short period of time as a negative indicator. They may see it as a potential red flag that someone is in a bad financial situation.

The Takeaway

If you’re just starting out and have no credit history at all, you generally start without an actual credit score. It can take a few months after you open a credit account to start establishing a score. As you continue to show that you’re responsible for the credit you have, your score will likely increase. Building credit can take time, and you should be skeptical of any people or programs that say they can build your credit fast.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What credit score do you start with?

There isn’t a starting credit score for those without any credit history. While you might think that you start with the lowest possible credit score (like 300) and have to build your way up, you actually don’t start with any credit score at all. As you open credit cards or other accounts, you’ll start to establish a credit history and score.

How long does it take to build a good credit score?

It usually takes anywhere from three to six months to start building a credit score after you’ve opened your first credit account. You’ll then continue to build and improve your credit by continually making on-time payments. You can always check your credit score periodically to see where you’re at on your credit journey.

How long does it take to recover from a hard inquiry on your credit?

Usually when you apply for a new credit card or other loan, your potential lender will pull your credit file. This is known as a hard inquiry. Since the number of recent hard inquiries is one factor in determining your credit score, applying for credit cards can lower your credit score. However, these inquiries typically only lower your score by a few points and drop off your report after a few months.

How fast can you build your credit in 3 months?

How fast you can build your credit depends on a number of factors. Generally, it takes a few months after you’ve opened a credit account to even establish any credit. Your credit score will improve as you continue to use your credit responsibly. It’s best to think about building credit as more of a marathon than a sprint.

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Photo credit: iStock/YakobchukOlena

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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 .

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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If you get paperless mortgage statements or have autopay set up on your home loan, or even if you get statements in the mail, it might be easy to miss important information.

By paying close attention to exactly what’s included in your mortgage statements, you’ll avoid unpleasant surprises.

What Is a Mortgage Statement?

You probably became well versed on mortgage basics during the homebuying process. And you likely did the hard work of using a home mortgage calculator, qualifying for a mortgage, and getting that loan.

Now comes the mortgage statement, a document that comes from your home mortgage loan servicer. It typically is sent every month and includes how much you owe, the due date, the interest rate, and any fees and charges.

In the past, the information that was included and the format of a mortgage statement ran the gamut among lenders. Thanks to the Dodd-Frank Act, enacted in 2010, mortgage servicers must include specific loan information and follow a uniform model for mortgage statements.

Statements also include information on any late payments, how much you’ll need to pay to bring your balance into the black, and any late fees you’re dinged with. You can also find customer service information on your mortgage statement.

What Does a Mortgage Statement Look Like?

A mortgage statement has similar elements as a credit card or personal loan statement. As a picture is worth a thousand words, here’s a sample mortgage statement, courtesy of the Consumer Financial Protection Bureau:

What Is on a Mortgage Statement?

Deciphering what’s on a mortgage statement can help you know what to look for, how much you owe in a given month, how much you’re paying toward interest and principal, and how much you’ve paid year to date.

Let’s dig into all the different parts of a home loan statement.

Amount Due

This usually can be found at the top of your mortgage statement and is how much you owe for that month. Besides the amount, you’ll find the due date and, usually, the late fee you’ll get hit with should you be late on payment.

Explanation of Amount Due

This section breaks down why you owe what you owe. You’ll find the principal amount, the interest amount, escrow for taxes and insurance, and any fees charged. All of those will be tallied for a total of what you’ll owe that month.

Past Payment Breakdown

Below the section that explains the amount due, you’ll find a breakdown of your past payment: the date the payment was made, the amount, and a short description that may include late fees or penalties and transaction history.

Contact Information

This is typically located on the top left corner of the mortgage statement and contains your mortgage loan servicer address, email, and phone number should you need to speak to a customer service representative. Note that like student loan servicers, a mortgage loan servicer might be different from your lender.

Your mortgage loan servicer processes payments, answers questions, and keeps tabs on your loan payments, and how much has been paid on principal and interest.

You probably know what escrow is. If you have an escrow account, your mortgage loan servicer is tasked with managing the account.

Account Information

Your account information includes your account number, name, and address.

Delinquency Information

If you’re late on a mortgage payment, within 45 days you’ll receive a notice of delinquency, which might be included on your mortgage statement or be a separate document. You’ll find the date you fell delinquent, your account history, and the balance due to bring you back into good standing.

There might be other information such as costs and risks should you remain delinquent. There also might be options to avoid foreclosure. One possible tactic is mortgage forbearance, when a lender agrees to stop or reduce payments for a short time.

Recommended: Refinance Your Mortgage and Save

Understanding the Details

Your mortgage statement includes many details, all to help you understand what you’re paying in interest, the fees involved, and what your principal and interest amounts are. It’s important to look at everything to make sure you understand what information is included. If you have trouble deciphering the information, call your mortgage servicer listed on the document.

If you have an adjustable-rate mortgage, the mortgage statement also might include information about when that interest rate might change.

Important Features to Know

Besides the main parts of a mortgage statement, here are a few other key elements of a mortgage statement.

Delinquency Notice

As mentioned, you’ll receive a delinquency notice within 45 days should you fall behind on payments. Besides how much you owe to get back in good standing, the delinquency notice might also include your account history, recent transactions, and options to avoid foreclosure.

Escrow Balance

If you have an escrow account for your mortgage, the balance will show how much you owe in homeowners insurance and property taxes.

Note that this is different from how much money you have in your escrow account and how much money is collected, which is typically included in your annual escrow statement.

If you don’t have an escrow account, your taxes and homeowners insurance owed will usually be separate lines.

Recommended: Mortgage Calculator with Taxes and Insurance

Using Your Mortgage Statement

Now that we’ve covered all the elements of a mortgage statement, let’s go over how to use your mortgage statement and make the most of it.

Making Sure Everything Is in Order

Comb through your mortgage statement and make sure everything is accurate and up to date. Inaccurate information can lead to overpaying, potentially falling behind on payments, and headaches.

Keeping Annual Mortgage Statements

While you might not need to hold on to your monthly mortgage statements for too long, make sure you have access to your annual mortgage statements for a longer period of time. In case you run into an IRS audit, you’ll be required to provide documentation for the past three years.

Making Your Payment

There are a handful of ways you can make payments on your mortgage.

Online. This is probably the most common and simplest way to submit a mortgage payment. It’s free, and once you set up an account online and link a bank account to draw payments from, you’re set. You can also set up autopay, which will ensure that you make on-time payments. In some cases, you might be able to get a discount for setting up auto-debit.

Coupon book. A mortgage servicer might send you a coupon book to use to make payments instead of sending mortgage statements. A coupon book has payment slips to include with payments. The slips offer limited information.

Check in the mail. As with any other bill, you can write a check and drop it in the mail. However, sending a payment by snail mail might mean that your payment doesn’t arrive on time. If you are going this route, send payments early and consider sending them via certified mail.

How Long Should You Keep Mortgage Statements and Documents?

Just as you’d want to hold on to billing statements for other expenses, you’ll want to keep your mortgage statements in case you find inaccuracies down the line. Plus, the statements come in handy for tax purposes and for your personal accounting.

So how long should you keep your mortgage statements? Provided you can find your statements online by logging in to your account, you don’t need to hold on to paper statements for long. In fact, you can probably get rid of paper copies if you have access to them online. It might be a good idea to download the documents to your computer.

Other documents, such as your deed, deed of trust, promissory note, purchase contract, seller disclosures, and home inspection report, you should keep as long as you own the home.

Consider holding on to annual mortgage statements for several years, and in a safe place. It’s a good idea to store them on your computer and have hard copies on hand.

The Takeaway

It’s easy to gloss over mortgage statements, but not knowing what’s in them every month and not noticing any changes can result in costly mistakes. It’s also eye-opening to see how much of a payment goes to principal and how much to interest. Having that information at hand can also be helpful if you are considering a mortgage refinance.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How do I get my mortgage statement?

You should receive a statement monthly, either in the mail or via an alert from your mortgage servicer saying the bill is due. If you don’t receive a statement and can’t access it online, contact your lender promptly.

What is a mortgage servicer?

A mortgage servicer is a company that manages home loans. They send your statement and collect and process your payment every month, as well as provide customer support. A mortgage servicer may be different from your lender, which is the institution that approved your application and loaned you the funds to buy your property.

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Photo credit: iStock/Tijana Simic

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.


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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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A black credit card is a financial product extending a line of credit to wealthy, high-spending consumers. Colloquial references to a black credit card typically refer to the American Express Centurion Card that launched in 1999. It quickly developed a reputation for being more than a credit card — rather, it became a status symbol of ultra wealth and almost limitless spending power.

Here’s a look at what a black credit card is in detail, how to get one, and the card’s benefits and drawbacks.

What Is a Black Credit Card?

A black credit card is an ultra-luxury private banking credit card product that’s designed to support the credit needs of the world’s wealthiest individuals, which can include A-list celebrities, professional athletes, and multi-millionaires. These are individuals who likely spend six figures a year using their credit card.

Although the black credit card meaning was originally derived from the AmEx Centurion Card, it now includes other luxury cards that have since come to the market. The list of exclusive card products include the Dubai First Royale Mastercard and the J.P. Mortgage Reserve Card.

Although the Mastercard Black Card might have the phrase “black card” in its name, it’s more accessible and arguably not in the same caliber as the aforementioned cards. That’s because consumers can submit an application online for this card without first being invited, which is more in line with typical credit card rules.

How Black Credit Cards Work

Unlike other consumer credit cards, the most exclusive black credit cards aren’t available for online applications. Card issuers publish very limited details — if any at all — about how to apply for the card or what it takes to receive an invitation. All of the elusiveness can enhance the allure of black cards.

Aside from their exclusiveness, black cards are generally known for having no credit limit, allowing members to spend freely. However, credit card issuers have already determined who they feel is financially capable of wielding the black card’s limitless buying power.

Recommended: Does Applying for a Credit Card Hurt Your Credit Score?

Requirements for Getting a Black Credit Card

Specific black credit card requirements and thresholds vary between black card products. However, they generally include the following factors:

•   Minimum annual spending

•   Income and/or net worth

•   Creditworthiness

If you believe that you meet the criteria for a black credit card, you can reach out to the card issuer directly to see if you’re eligible. American Express, for instance, may offer existing members an online form for its Centurion Card for those who want to request consideration.

Worth noting: The Centurion Card is currently said to have a one-time $10,000 initiation fee and an annual fee of $5,000 thereafter.

Recommended: The History of Credit Cards

What Kinds of Perks Do Black Credit Cards Offer?

Whether you’re still learning how credit cards work or are experienced with credit, you likely know that different cards offer varying benefits, including rewards, travel and shopping credits, and more. The perks of a black credit card also differ depending on the type of black card.

For example, the AmEx Centurion Card, offers the following black card benefits:

•   VIP airport lounges. Access to AmEx’s Global Lounge Collection, including the coveted The Centurion Lounge.

•   Travel accommodation enhancements. Upgraded bookings and credits through AmEx’s Fine Hotels and Resorts program, with 900 hand-selected, iconic properties, and elite status with additional hotel programs.

•   Airline loyalty status. Complimentary top-tier status through airline partner loyalty programs.

•   Unique experiences. Access to one-of-a-kind travel experiences around the world.

•   Travel inconvenience credit. Up to a $2,000 credit per traveler for carrier-related inconveniences, like delays, and up to $10,000 for canceled trips.

•   Travel insurance. Up to $100,000 in travel medical assistance, and up to $1 million in travel accident insurance.

•   Rental car insurance. Up to $75,000 in car rental loss and damage insurance.

•   Saks Fifth Avenue credit. Quarterly $250 shopping credit, up to $1,000 per year.

•   Equinox fitness club membership. Access to clubs in multiple countries.

•   Additional buying protection. Purchase protection, return protection, and extended warranty for goods purchased on the card.

•   Personalized support. Access to personal shoppers and 24/7 personal concierge service.

As noted above, fees, benefits, fees, and spending requirements will vary among different types of credit cards, including those that fall into the ultra-luxury category.

Recommended: What Is a Charge Card?

Pros and Cons of Using a Black Card

As a card that’s not intended for the masses, the card’s pros and cons highly depend on which side of the eligibility spectrum you fall under. Here’s a closer look at black credit card benefits and drawbacks:

Pros of Using a Black Card	Cons of Using a Black Card
No credit limit	Accessible by invitation only
Status symbol	High initiation and annual fees
Luxury perks	High spending requirement
Tailored service experience	High income requirement

Is a Black Credit Card Worth It?

With a reputation of having excessively high annual fees and high minimum spending criteria, a black card can carry a high price tag. It’s important to consider that you can afford this kind of credit card — that is, assuming you’ve received an invitation in the first place.

Weigh the black card benefits, and consider if you’d actually be using a credit cardin such a way that it would be worth it for your needs.

Recommended: When Are Credit Card Payments Due?

The Takeaway

Black cards are typically reserved for wealthy customers who have demonstrated the ability to spend hundreds of thousands on a credit card and repay that amount with ease. If you’re an everyday consumer or it’s your first time getting a credit card, a pricey black card probably isn’t a practical credit card solution.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What does it mean to have a black credit card?

Being invited as a black card member means that you’ve met the card issuer’s underwriting criteria in terms of having a high income, high net worth, high spending activity, and more. It’s perceived as being a card that’s only accessible to ultra-wealthy individuals.

How much does a black credit card cost?

Black credit card fees vary between card products but often cost hundreds to thousands of dollars in annual fees each month. The AmEx Centurion Card, for example, has a $10,000 initiation fee and a $5,000 annual membership fee thereafter.

Are black credit cards actually black?

Generally, black credit cards are designed with a black color scheme. However, some of these cards that fall into the exclusive black card category aren’t black. For example, the J.P. Morgan Reserve card is made of brass and palladium and has a silver metal finish.

What is the difference between a black card and a platinum card?

The AmEx Platinum Card is more accessible to consumers than the AmEx Centurion Card, also dubbed the black credit card. Members who want to apply for a Platinum Card can do so on their own online, while the black card is offered by invitation only. The requirements and annual membership fees of both cards also vastly differ, with the black category charging higher fees and having higher spending requirements as well as more robust perks.

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Photo credit: iStock/Lemon_tm

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.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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There are unfortunately many things in life that can rock a person’s financial stability, ranging from divorce to a devastating flood. Situational poverty is a type of poverty that occurs due to a sudden change in circumstances such as a major life event or natural disaster.

If you’re in the grip of a situation like this, it can feel impossible to get back on your feet. But it is indeed possible to overcome situational poverty. Using a variety of techniques, it’s often possible for people to pull themselves out of a difficult and painful moment. Here’s a closer look at what causes situational poverty and how to break out of a poverty cycle once it starts.

What Is Situational Poverty?

Situational poverty is a type of poverty that is the result of a sudden or severe crisis. It usually has a specific cause or triggering event, and the financial difficulties may be only temporary. Those in situational poverty may have ways to steadily improve their finances.

This is in contrast to generational poverty, where at least two generations of a family are born into poverty. In this case, poverty is largely the result of circumstance; people don’t have the knowledge or skills to escape poverty, so often their finances do not improve.

Reasons for Situational Poverty

Situational poverty is often the result of a sudden or severe crisis in a person’s life. While there are many events that may lead to situational poverty, they are often temporary. Here’s a look at some of the triggers that can cause this sort of disadvantaged scenario.

Being Born Into a Disadvantaged Background

Being born into a disadvantaged background can contribute to situational poverty; it can also be a factor in generational poverty, which requires at least two generations to be born into poverty.

In terms of situational poverty, if you were born into poor circumstances, even if your parents had been wealthier earlier in their life, it may still be difficult for you to get ahead financially. You might face issues like lack of access to medical care and educational resources. You don’t get that boost into financially stable adulthood that some people do.

Making Bad Financial Decisions

When you are grappling with poverty, you may wonder, why am I so bad with money? But it’s not uncommon for people to make a series of unwise money moves and wind up in poverty as a result. Perhaps you made a bad investment or took on a large debt (say, a mortgage) that you couldn’t keep up with. Or maybe you poured all your savings into a business idea that didn’t succeed. Sadly, these things happen every day. In some cases, the consequences of these sorts of decisions can trigger situational poverty.

Experiencing a Tragedy

It’s painful to think about it, but there are many types of tragedies that can send a person’s finances into a downward spiral. For instance, you might lose your house in a hurricane or your spouse (with whom you share your finances) might die unexpectedly. These events can leave a person without the means to live above the poverty line.

Lack of Good Education

Education is a path out of poverty, and sadly, the inverse is also true: Not getting a solid education can lead to a person not succeeding financially. They may lack the skills to earn higher wages.

Lack of financial education, such as the importance of an emergency fund and how to manage your finances, can also result in or contribute to situational poverty. Unfortunately, many U.S. high schools don’t require personal finance education as a graduation requirement. As a result, many people enter adulthood without basic financial skills like how to open a new bank account, set up a basic budget, and avoid “bad” debts.

Tips for Breaking the Vicious Cycle of Poverty

The scenarios above reveal some of the ways that a person can slip into poverty. Once you’re in that situation and possibly struggling to pay bills, however, it can feel impossible to climb your way out. Fortunately, there are several paths that may help you rise up and get on better financial footing. Here, some ideas for how to get out of situational poverty.

1. Getting a Sound Education

A good education — and specifically a good financial education — is one of the first steps toward getting out of poverty. While financial education classes in school are ideal, you can still learn the basics on your own, even as an adult. For example, the FDIC’s How Money Smart Are You? can help you learn the basics. Many universities and organizations also have personal finance courses for adults. You can also find free educational materials online that can help boost your financial IQ and guide you towards making money-smart choices.

2. Having a Close Mentor

Having a great mentor is one of the best ways to get a leg up in life, and the same applies to escaping situational poverty. A career mentor can help you gain the skills and experience you need to find (or find a better) job, while a financial mentor can help you learn how to budget, save, and ultimately break the cycle of poverty.

It can take some searching but you may be able to find a mentor where you work or by networking with friends, family members, and neighbors. People who have achieved success and escaped poverty themselves are often happy to give back by helping others in the community.

3. Working With Well-Informed Organizations

Another way to improve your financial literacy and learn how to overcome situational poverty is to work with trusted organizations. There are a number of nonprofit groups that specialize in different aspects of personal finance that could be holding you back. For example, the National Foundation for Credit Counseling (NFCC) helps people who are saddled by large amounts of debt. Operation Hope provides financial education to underserved communities, while Accion is a nonprofit that is focused on bringing financial technology and tools to underserved communities.

4. Utilizing Community and Government Resources

There is no shortage of community and government resources that can help if you are experiencing situational poverty. Churches, schools, community centers, and public libraries can offer support within your community.

Beyond your community, there are extensive government resources that can also help. For example, you might qualify for benefits like SNAP (Supplemental Nutrition Assistance Program) or the child tax credit. There are dozens of government programs that use poverty as a qualifying criterion. The U.S. Department of Health & Human Services (HHS) has a list of programs on its website.

5. Changing Your Money Mindset

Your mindset can hold you back just as much as it can empower you. It’s worthwhile to try to improve your money mindset. Something that is important to remember is that situational poverty is often temporary.

This is especially true if a bad financial decision or a natural disaster was a major contributor to your lack of funds. These are passing, albeit difficult, moments. By leveraging some of the resources mentioned in this article and practicing financial self-care, you can make progress.

6. Setting Financial Goals

Setting financial goals is important whether you are experiencing poverty or not. But it is even more important when you are hoping to build up your financial resources. Money goals can help you work toward something specific. Consider taking some time to map out what steps you want to take to move through your situational poverty. Some common goals are developing a budget with positive cash flow and paying down high-interest credit card debt.

7. Cutting Expenses and Spending Wisely

One aspect of budgeting that can help you pull yourself out of a tough financial spot is cutting any nonessential expenses, and then funneling that money towards your goals, such as paying down debt (more on that below) or taking a class to learn a skill that can help you get a promotion or a higher-paying job.

To “find” money, it can help to look at your current expenses and see where you may be able to trim back. For example, if you have any streaming services, you might pause them until you have your finances in order. Or if you have a cell phone plan, you might switch to a prepaid plan so you aren’t being charged automatically and can take control of your spending. You might also negotiate lower interest rates by calling your credit card issuer; this tactic may yield rewards.

8. Paying Down Your Debt

If you have large amounts of debt, you’ll want to prioritize paying down those with the highest interest rates first. You might look into a balance transfer credit card, which may give you no or low interest for a period of time. That can help you whittle down debt as it gives you some breathing room from a high annual percentage rate (APR). If you can qualify for a low rate on a personal loan, you may use it to consolidate your debt. Working with a non-profit credit counseling organization is another option to help you manage this common aspect of poverty.

Recommended: What is the Average Credit Card Interest Rate?

9. Avoiding Payday and Predatory Loans

Payday loans offer cash advances before payday to those who need cash quickly, but this money infusion can really cost you. These loans typically have extremely high interest rates. Even with state laws limiting fees to no more than $30 per $100 borrowed, you could still end up paying the equivalent of 400% interest or more. And if you are unable to pay back a payday loan, you may end up in a debt cycle that can be difficult to break out of.

10. Making Saving a Priority

Saving is generally always smart, but situational poverty can highlight its importance. When you’re financially vulnerable, any expense you aren’t expecting could really rock your situation. A big medical or car repair bill could be a huge problem.

Even if you don’t have the means to put much aside, even a small contribution to savings each month can slowly but surely add up to a solid cash cushion over time, especially if you put the funds in a savings account that pays a competitive rate, such as a high-yield savings account. This allows your money to grow just by sitting in the bank. As your finances improve, you can gradually increase how much you siphon off into savings each month.

11. Finding Out Where You Stand

Finding out where you stand can be a powerful exercise. We tend to be our own biggest critics, and that applies to finances, too. When you take a look at the numbers (go ahead and really study your income, cash outflow, assets, and debt), you might find you are doing better than you think.

Granted, this may not be the case when you first find yourself in situational poverty. But as you start to work on things, you might find your debt declining. Or that your savings by age is better than you expect. That can give you the confidence boost you need to keep exercising good financial habits and continue to improve your situation.

Also, even if you are in the midst of situational poverty and your status isn’t great, you will at least know exactly where you are. That benchmark will be what you build from.

The Takeaway

Situational poverty is a type of poverty typically caused by a life event, such as a divorce, severe health problems (and the resulting bills), or a natural disaster. This type of poverty is usually temporary and can often be overcome by boosting your financial education, accessing community and government resources, and prioritizing debt elimination and saving.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

FAQ

How can I overcome a poverty mindset?

Overcoming one’s mindset is often a key step to getting out of poverty. Here are some ways to break out of a poverty mindset and feel more empowered:

• Set achievable financial goals and celebrate small victories to build confidence.

• Educate yourself on personal finance through books, courses, and mentors.

• Surround yourself with positive influences and avoid those who reinforce negative stereotypes.

• Practice gratitude to appreciate what you have.

• Cultivate a growth mindset by seeing challenges as opportunities for learning.

How do I know if I am poor or not?

The federal poverty guideline for 2024 for the lower 48 states and D.C. is an annual income of $15,060 or less for an individual. For a couple, poverty is defined as an annual income of $20,440 or less. For a family of four, it’s defined as an income of $31,200 or less.

How many people are in situational poverty?

It is difficult to know exactly how many people live in situational poverty. However, a large number of people live in poverty in general. According to the latest data from the U.S. Census, the official poverty rate is 11.5% of the population, with 37.9 million people living in poverty.

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SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2025 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.

As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.

Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.

Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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