My 2-Year-Old Has $95,000 in Available Credit. Here's Why

It could help him out in the long run.

My son turned 2 in September, but he already has more credit available to him than most people will. Although he's not out shopping with it, he has a whopping $95,000 credit line on a rewards credit card.

This may seem strange, but there's a very simple reason why I've given a toddler access to a huge amount of credit.

Here's why my son has a large credit line

The simple reason why my son has $95,000 in credit available to him is because I made him an authorized user on my credit card. 

An authorized user is a person who has the authority to use the card, but who doesn't have a legal obligation to make payments on it. Credit card companies typically let you add just about anyone you want as an authorized user on a card. 

An authorized user does not have to be 18 years old, have income, or have good credit. You can just provide the Social Security number and contact details of someone who you want to make an authorized user and they'll be added to the account and provided with a credit card. 

I chose to add my son to my card and make him an authorized user because doing so enables him to start building credit. My account will show up on his credit report starting now, when he is very young. And as long as I keep him on the account, which I plan to do, it will remain on his credit record.

Since I have only a few credit cards and every single one has a large line of credit since I regularly ask for credit line increases, it just so happens that the card my son has been signed up for has a $95,000 credit line.

How being an authorized user will help my son

Being an authorized user will help my son build a good credit score even before he's 18 and can start borrowing himself.

See, since my account has been open for a long time and I don't plan to close it any time soon, my son will have an extremely long average age of credit. That's preferred by lenders and will help his score. I've also paid my card on time all the time, so he will have a very solid positive payment history. 

And because my credit limit is so large, even when I charge things on my card, I am able to keep my credit utilization ratio low, which will help my son's score as well. Credit utilization ratio is one big reason why I always request credit line increases. Keeping your credit used versus credit available pretty low can help bolster your score. With such a large credit limit, it would be unlikely I'd use more than 30% of my available credit, which is the level you typically don't want to exceed.

I want to give my son these advantages and help him earn good credit early so he can easily borrow when he gets older. That just so happens to mean he could theoretically charge up to $95,000 if he wanted to -- and if we'd allow it, which of course we won't.