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When your adult child is getting ready to launch, a decent聽credit score聽can make life a lot easier:聽No聽credit history and no credit score can be a real obstacle to renting an apartment or getting a credit card.

But young adults exploring how to build credit at 18 may find themselves in a bind. They can鈥檛 get credit because they don鈥檛 have a credit history, and they don鈥檛 have a credit history because they can鈥檛 get credit.

What if you聽could fix the problem for $200 without risking your聽own credit?

The secured card strategy

Consider paying the deposit to help your adult child open a secured聽credit card and start building credit. A聽secured credit card聽requires a deposit upfront, and the credit limit is typically equal to the deposit. The deposit can be as low as $200, and the cardholder聽can establish a credit score in about six months.

If your son or daughter still聽lives at home, you have an opportunity to go over the聽bill together. Make sure he or she understands the interest rate, minimum payment and due date 鈥� and how long it would take to pay off the balance聽making only minimum payments.

Secured cards are for those 18 or older, but聽are likeliest to be approved for those 21 and older.聽If your adult child is under 21, he or she will either have to show an independent income or have a co-signer. (But be aware that co-signing puts your own credit at risk.)

You聽can help younger kids build credit by adding them as anauthorized user聽on your聽credit card. However, the parent is on the hook to pay聽any charges, and only聽a few cards offer spending limitson authorized users. Also, being an authorized user doesn鈥檛 have as much credit-building power.

If you鈥檙e trying to help a聽son or daughter who鈥檚 struggling with how to build credit at 18 or older, a secured card helps them more 鈥� and protects you more.

Parents have several reasons to front the money for a secured card:

• Your adult child will be聽less likely to聽ask you to聽co-sign聽for an apartment, car loan or traditional unsecured credit card if he or she can build up a good credit score.
• A separate card, not in your name, protects your credit standing. If your son or daughter聽turns out to be less responsible than you hoped, it won鈥檛 wreck your credit score.
• Once your child聽transitions to an unsecured credit, the secured card can be closed and your deposit returned.

Here鈥檚 what鈥檚 in it for the young adult:

• Being a primary user, not an authorized user, weighs more heavily in credit scoring because primary users are responsible for payment.
• Learning about how credit works, and the costs associated with it, is easier while still living at home.
• Having a separate bill, rather than charges going to a parent鈥檚 card, gives financial privacy.
• Building credit聽can lead to getting an unsecured card, or being approved for loans or to rent an apartment.

Potential drawbacks of the secured card strategy

Are there downsides? Of course. For starters, somebody has to pay the deposit. As tempting as it is, choosing a super-low deposit means you have to be careful about spending.

The deposit amount is usually the card鈥檚 credit limit. And card issuers don鈥檛 view 鈥渃redit limit鈥� in the same way that the highway patrol views 鈥渟peed limit.鈥� Driving the speed limit won鈥檛 get you in trouble, but going right up to your credit limit will lower your credit score.

That鈥檚 because聽credit utilization聽has a big effect on your credit score. Credit experts advise keeping spending to 30% or less of your credit limit. To stay at or below 30% utilization on a secured card with a $200 limit, you鈥檇 have to聽limit monthly spending to $60. That鈥檚 not a lot, so you may want to spring for a higher deposit. Failing that, your adult child can keep the balance low by making smaller, more frequent聽payments rather than one a month.

Also, secured cards tend to have high interest rates and annual fees. And only some cards聽offer a feature that lets a user 鈥済raduate鈥� to an unsecured card, usually after a stretch of on-time payments.

A way station, not a destination

A secured card is meant to be temporary. If things go well, it鈥檚 a tool to help your adult child build a decent credit score and transition聽to an unsecured card.

And if things don鈥檛 go well? The only credit score that is damaged is your adult child鈥檚 and he or she is afforded what we鈥檒l call a 鈥渓earning opportunity.鈥� Is that such a terrible thing?

Bev O鈥橲hea is a staff writer at NerdWallet, a personal finance website. Email: boshea@nerdwallet.com. Twitter:聽@BeverlyOShea.

This article first appeared in NerdWallet.聽