Choosing the right credit card when you’re young comes down to your short-term financial needs and long-term financial goals. Here are a few things to consider as you make your decisions.
Consider your immediate financial need.
This is the easiest and most important place to start.
Outside of building credit, do you need to save interest on existing debts? Or do you need an interest-free period for your first year to load up on college expenditures? Or are you especially jazzed about earning card rewards?
Your financial need will directly affect the pool of cards you’re best off obtaining, whether it’s an introductory APR card or a rewards card.
Review your existing credit score.
Your credit score influences which credit cards you can qualify for — the higher the score, the better. A poor credit score will lock you out of many options, so understanding your credit score range can help you choose based on the cards that are most likely to approve you.
Look for the benefits most appealing to you.
Different types of cards will come with different kinds of benefits to suit your financial needs.
For example, some balance transfer cards may come with a balance transfer fee waiver for a limited time. Or, rewards cards may offer travel rewards or purchase protection. Once you’ve chosen the type of card you want, these nitty-gritty details are where you should look next.
Look for a low APR.
As a best practice, strive to pay off your monthly credit card statement in full at the end of each billing period. But if you need to carry a balance, you’ll want a card with as low an APR as possible. Most cards offer variable APRs which can range based on your credit score.
We’ve had plenty of inquiries about the best credit cards for millennials, who are collectively approaching the tail end of “young adult.”
Considering millennials are perennially beset by economic woes, most have turned to cashback rewards cards on everyday purchases as their cards of choice. Some of our favorite cards for this purpose include:
- Citi Custom Cash℠ Card. This cashback card makes it easy to maximize rewards each month since you don’t have to worry about spending categories.
- Citi® Double Cash Card. The Citi® Double Cash Card is another great choice thanks to above average 2% rate on all purchases (1% for the purchase and 1% when you pay your balance).
- Blue Cash Preferred® Card from American Express. The Blue Cash Preferred® Card from American Express is one of the most lucrative everyday cashback cards on the market and is particularly great for groceries if you don’t mind the card’s annual fee. (Terms apply, see rates & fees).
- Chase Freedom Unlimited®. Chase’s flat-rate card spices up its 1.5% rate with several larger earning categories, including 4.5% back on dining and drugstores and 6.5% back on travel booked through Chase.
Here are a few of our favorite cards for young adults looking to start building their credit. Select up to four cards and choose Compare to view them side by side.
Not all credit card issuers offer a product specifically designed for the younger crowd. If you can’t find or qualify for a card that strikes your fancy, you can try to become an authorized user on a trusted friend or family member’s account. This can let you use a credit card you wouldn’t normally qualify for, and the cardholder handles account management and repayment.
The sooner you can get and start responsibly using your first credit card, the sooner you can take advantage of a strong credit score. Take your time, evaluate your options and pay off your card debt in full every month to get off on the right foot. With enough time, you’ll be able to take your pick from some of the best credit cards on the market.