Choosing the right credit card is essential. For young adults, the best credit cards are a great way to get a head-start in the financial world, and they will lay the groundwork for success in the future.
With the right credit card, you can build a desirable credit score with banks, giving you a great advantage when making a big purchase.
When you are looking to buy a car or a house, you will need to make sure that you have a good credit score.
Most credit cards for young adults start with credit limits that are fairly low, which means that you won’t have the opportunity to make any mistakes that will mean that you get into debt that you struggle to get out of.
Most credit card companies start you off small and build up to credit cards that have higher limits.
Best Credit Cards For Young Adults
OUR TOP PICK
Best For Low Credit Scores
This credit card is great for young people who don’t have a good credit history or don’t have any credit history. You won’t need to give a high-security deposit for this credit card, it is up to $200.
You will be able to get up to $1000 as the initial credit card limit on this card, which is quite high for a card that doesn’t require good credit scores.
However, the card does cap the amount of money you can spend to make sure you can pay your bills in full.
This is great because it can help you to build up your credit score if you are quite young and don’t yet have a strong credit score.
This credit card is great if you have a poor credit score. If you have made a few past credit mistakes this is a great card for you.
If you have a good credit score, you don’t need to get this credit card. You can earn better rewards with a different card.
Pros
There are many pros of this credit card; these include:
- You will be considered for a higher credit score every 6 months. After you have been able to make 6 on-time monthly payments, you will be considered for a higher credit limit.
- There is no annual fee for this credit card, and there is also no penalty APR.
Cons
- This credit card does not come with a rewards program. The next credit card on the list is good for providing rewards.
EDITORS CHOICE
Best For Travelers
This credit card is great if you are looking for rewards.
Specifically, you will get many reward points when you use the card for many different currencies on the market. This makes this card great for when you are traveling.
This card offers a 5% cash back on lots of purchases until March 2025. You will be able to get 5% cash back on any travel that is bought through Chase Ultimate Rewards.
As well as this, you will be able to enjoy 3% cash back on any restaurant purchases and drugstore purchases that you will make in preparation for your travels!
If you have good credit, you will have the option to get this credit card which has great cash-back rewards.
If you are still establishing credit, there may be other cards for you.
Pros
- This card has no annual fees.
- There is 0% APR on any new purchases for the first 15 months of using this card. After this time, there is between a 17%and 25% APR.
- You will get lots of cash-back options and a 1.5% cash back on everything else up to $20,000.
- The available cashback is unlimited and can be redeemed at any time.
Cons
- The transaction fee abroad is 3%.
- There will be a penalty APR of 29% for any late payments.
BEST VALUE
Best Credit Card For Students
This credit card is a great starter credit card that is specifically designed for those who do not have a credit history. The Discover It Student Cash Back credit card is a great starter credit card.
It suits students because it has a lot of different cash-back rewards. It offers 5% cash-back on certain bonus categories, allowing up to $1500 for each quarter on those bonus categories and 1% cash-back on other purchases.
This credit card also comes with 0% APR for purchases for the first six months. After these six months, there will be a variable APR of somewhere between 15% and 25%.
This card is perfect for those who want to learn how to use a credit card during their studies. You don’t need to have any positive credit history in order to take out this card.
This credit card is not for you if you have a good credit score. There are many other cards out there for those with experience with credit cards.
This card is also not suitable for students who will be tempted by the rewards structure.
Pros
There are many pros to using this student credit card. These include:
- Any cash rewards that are claimed will be matched at the end of the first year.
- There is no annual fee that needs to be paid for this card.
- You will have the opportunity to earn 5% cash back on bonus categories. You can check out the categories on the Discover cash-back calendar.
- You won’t get any penalty APR on your first missed payment, and there won’t be any late fees for this first payment.
- You won’t need any credit history to take out this credit card.
Cons
- You will need to be re-enrolled with the bank in each quarter.
RUNNER UP
Best For Young Professionals
This card is perfect for those who are just starting in the professional world. This card is perfect for you if you travel for work and eat out in restaurants often.
You will need to have a fairly good credit score in order to take out this credit card.
This card is also good for those who are just starting with traveling, as it offers triple points on travel.
If you expect to join the Amex Membership Rewards loyalty program in the future, this is a great place to start.
Pros
- This card works on a points system. You will earn 30,000 points if you spend $2000 or more within three months.
- You will get an annual bonus of $100 for certain brands.
- There is no foreign transaction fee, meaning you can spend abroad and travel freely.
- You can build up an unlimited amount of points.
Cons
- You will have to pay a $150 annual fee.
- You must book all of the travel you wish to earn points from through American Express Travel.
RUNNER UP
Best For Preventing Debt
This is a great credit card for those concerned about quickly getting into debt.
With high-interest rates, it can be easier than some would think to get into trouble with paying back the debt.
This cash card is great for this, as you will have 18 months to pay off the debt interest-free. After this, your interest rate will be 16% to 26%.
This is one of many benefits of this credit card. You will also have the option of gaining cashback on any purchases that you make on this card.
Young adults with good credit scores should opt for this card, especially if they have some existing debt that they are looking to pay off. This card is great for students who want to earn some cash back.
Pros
- You will get up to 2% cash back on lots of purchases on this credit card. You will get 1% when you make the purchase and 1% when you pay off the purchases.
- There is also no annual fee involved with this credit card.
- You will get some Citi ThankYou points.
Cons
- Rewards will expire if you don’t use your card for 12 months.
You will also get a low balance transfer fee for the first four months of owning the card.
RUNNER UP
Best For A Big Purchase
This credit card is great for paying off some larger purchases because it gives you quite a long time to start paying it off.
It begins with 18 months, and if you pay on time during this period, you will get 21 months with 0% APR.
After this, your APR will be between 15% and 27%.
Whether you have purchased a new laptop or something similar, this card will allow you to have a lot of time to start paying this off.
This is good for practical reasons; however, if you are looking to build your credit score, you might have better options.
Pros
- There are no annual fees with this credit card.
- You will get 0% APR on new purchases for up to 21 months.
Cons
- There is no rewards program on this card; many other credit cards offer better reward options.
Frequently Asked Questions (FAQs)
What Should You Look For In A New Credit Card?
There are a few things that you need to look for when you are deciding on which credit card to take out. These include:
Annual Fees
Many credit cards require a one-time annual charge on top of the money you need to pay off. These fees vary, and they range anywhere from $0 to $500.
This one-time fee is an important thing to consider when you are taking out a credit card. You will need to consider how high the annual fee is and what rewards you will receive from the credit card.
If you do not manage to pay off this annual fee right away, then you will have to pay interest on this charge.
It is a good idea to look for a credit card that does not charge an annual fee unless it is worth what the credit card offers.
Often, if a card offers great cash-back options, it will include an annual fee. The benefits should always exceed the cost of the annual fee.
Minimum Payments
You should also understand the minimum monthly payment you need to make on any credit card you take out.
You will be required to pay back a certain amount each month and must make sure that you can make this payment.
The minimum amount will be a percentage of the amount that you need to pay back. Make sure that you know the minimum amount you need to pay back, as this will prevent any problems.
Penalties
If you fail to make the minimum repayment each month, you will likely have to pay large penalties. You will face high-interest rates and may lose many of your rewards.
You should make sure that you are aware of the penalties you face to ensure that you don’t miss any monthly payments.
You will also incur charges if you exceed your credit limit. It is very important to ensure you’re aware of the possible charges so that you can stay on top of them if they happen.
Rewards
Lots of credit cards offer reward programs, but not all do. You must use the rewards program if you have a card that offers one.
Make sure you get reward programs that suit you when choosing a card.
Rewards come in the form of cashback or travel points. Cashback allows you to redeem cash rewards when you get credit on your account.
You will need to make the payment. Still, you receive rewards in terms of cashback later on down the line. Often, this is given once you make the payments back.
Point rewards are earned when you spend money. You will usually receive one point for every dollar that you spend. These points can often be redeemed on travel, hotels, and rental cars.
Interest Rate
One of the most important things to consider when taking out a credit card is the interest rate. This is the amount that you will be paying back, so it is very important to consider whether you will be able to do this.
Unless you pay off all the money that you spend on the card every month, you will have to pay interest on the credit card.
Different cards offer different interest rates, so you should consider this when choosing.
Why Is Cashback Important For Young Adults When Choosing A Credit Card?
Cashback is a great addition to a credit card for young adults because it gives you a chance to make some money back or some rewards on each one of your purchases.
During the first year with this card, you will be able to see the difference that this cashback option makes for you.
You should be careful, though, that you don’t end up spending lots of money on things that you wouldn’t usually buy in order to get the cashback rewards.
How Should You Choose A Credit Card As A Young Adult?
There are a few questions that you should ask yourself if you are attempting to choose a credit card as a young adult. These include:
- What do you want to get out of the credit card? The answer to this could be a better credit score, rewards for your spending, or a chance to pay off your debt.
- Will this card suit someone like me? Take a look at your spending and consider whether this credit card is designed for someone who spends their money like you. Whether you spend most in restaurants or on travel, there is a credit card for you.
- Will this card suit my credit score? You should make sure you are choosing a credit card that is suitable for you and your current credit score. You may need to build up to a credit card that has higher rewards because you might not have the credit score for it.
Final Thoughts
It is very important to choose the right credit card for you when you are just starting on your financial journey.
Whether you are looking to build a good credit score, help with big purchases, or get good cashback and rewards, then your choice of credit card is essential.
You should have all the information you need to make this choice as a young adult, as this article has explored all of the best credit cards for you.
As a current Mortgage Underwriter with 15 years of experience, I have seen my fair share of money-related issues. Whether that be high levels of debt, not enough credit, or simply a lack of funds - I’ve had clients who fit into these categories.
Here I will share tips, tricks, and experiences on how you can get yourself back in control of your finances.
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