Best Credit Cards for Young Adults September 2024

Should young adults get credit cards?

Young adults should get credit cards if they can use them responsibly.

Credit cards have better fraud protection than debit cards, so it’s helpful to have one if you’re concerned about the security of your checking account. Many credit cards also come with travel insurance benefits, purchase protection and other perks.

Opening a credit card can help you build credit. You need a strong credit profile to rent an apartment, buy a home, purchase a vehicle or achieve other milestones. Only get one of the best credit cards for young adults if you can manage it appropriately.

Pros and cons of credit cards for young adults

How to choose the best credit card for young adults

Before you apply for a credit card, consider these factors.

Fees

Some cards have no annual fee, while others have annual fees of $250 or more. You also need to be aware of each card’s fees for balance transfers, cash advances, late payments and foreign transactions.

Rewards

Rewards credit cards give you several ways to earn based on your everyday spending habits:

• Cash back: When you use cash-back credit cards, you earn a flat percentage of each transaction. For example, if you pay for a $184.28 restaurant bill with a card offering 3% back on dining, you’ll earn $5.53 in rewards cash.
• Miles: Some beginner travel credit cards reward you in the form of airline miles instead of points or cash back. Typically, you earn a certain number of miles for every dollar spent.
• Bonus points: Several credit cards give you bonus points instead of cash back or miles. For example, some Chase cards give you Chase Ultimate Rewards^® points.
• Welcome bonuses: Review the terms of each credit card offer carefully. You may qualify for a welcome bonus if you spend a certain amount of money shortly after opening your account.

Other benefits

Credit card companies are competing for your business, so many good credit cards for young adults come with extra benefits. The benefits available depend on which card you choose, but you may have access to travel insurance, extended warranty protection, purchase protection and rental car collision coverage.

Some cards also offer credit-building tools to help you create a strong financial future. For example, many credit card companies give you access to at least one of your FICO^® scores.

Credit score requirements

To get a credit card, you must meet the issuer’s minimum score requirements. If you’ve never checked your credit scores, do so before you apply for a card. Knowing where you stand makes it easier to narrow down your options.

Note that credit scores aren’t the only factor a credit card company uses to determine your eligibility. You also need enough income to support your spending. If you have no income or a very limited amount of income, you may not qualify, even if you have a strong credit profile otherwise.

Deposit requirements

Some credit cards, known as secured credit cards, require a deposit. Generally, this deposit becomes your line of credit. For example, if you deposit $500, you can spend up to $500 on your credit card. Check the minimum deposit requirements carefully, as it doesn’t make sense to apply for a card with a $1,000 minimum deposit if you only have $500 available.

Types of starter credit cards for young adults

If you’re looking for the best first credit card for young adults, you may need to open a starter credit card. Starter cards are for people with limited credit histories who want to increase their scores and demonstrate they can manage credit responsibly.

Unsecured subprime credit cards

Subprime borrowers have credit scores ranging from 580 to 619. With scores in this range, you won’t qualify for products aimed at consumers with strong credit histories. The good news is that some companies offer unsecured subprime credit cards.

An unsecured card doesn’t require a deposit, so if you meet the minimum requirements, you can open an account even if you don’t have much cash on hand. It’s easy to get approved, and you may even earn some rewards on each purchase. However, subprime cards have high fees and usually don’t allow you to upgrade once your credit scores improve.

Secured credit cards

As noted earlier, a secured credit card requires a deposit before you can open an account. If you use the card responsibly, the issuer may convert your secured card into an unsecured card and return your deposit at some point. Unless you deposit a lot of money, be prepared to contend with a low limit.

Student credit cards

Student credit cards are for students who want to build their credit. You typically have to be enrolled in college, trade school or some other type of postsecondary education to qualify for this type of credit card. Most students have limited experience with credit, so student cards often have high interest rates and low fees.

▶︎  See our picks: Best credit cards for fair credit

Credit card tips for young adults

Follow these best practices for young adults using a credit card:

1. Set up automatic monthly payments. Making on-time payments is critical for building good credit. Set up automatic monthly payments to reduce the risk of forgetting your payment due date.
2. Spend only what you can afford to pay in full. Your payment history has a big impact on your credit scores. To avoid large amounts of debt, spend only what you can afford to pay in full.
3. Keep credit utilization low. Credit utilization refers to how much credit you’re using compared to your total credit limit. We recommend keeping your utilization below 30%.
4. Use rewards and benefits. If your new credit card comes with rewards and extra benefits, make sure you use them. You may qualify for discounts, cash back and other perks.
5. Review your transactions each month. If you don’t review your transactions regularly, you may not notice fraudulent charges until it’s too late to dispute them. Reviewing your account also makes it easier to spot errors.
6. Keep an eye on your credit score. Once you open a credit card, keep an eye on your credit score. Check it at least monthly to better understand how your spending habits affect your credit profile.
7. Don’t close your card. If you’re not using your credit card, don’t close the account. Closing credit cards reduces your average age of accounts, which may have a negative impact on your scores.

How to apply for a young adult credit card

Before you apply for a credit card, make sure you understand the minimum requirements.

The credit score needed depends on what type of card you want to get. If it’s a subprime card, you may qualify with low credit score. Other cards require good credit scores in the 700s or above.

When you’re ready to fill out the application, provide the following information:

• Legal name
• Address
• Telephone number
• Social Security number
• Housing status (own or rent)
• Monthly mortgage/rent
• Income

How many credit cards should a young adult have?

If you don’t have much experience managing credit, we recommend starting with one card. Once you’re comfortable with making payments and tracking your balance, you can always apply for a second one.

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