Getting a credit card when you’re under 21
It’s easier to get approved for credit cards at 21 or over, but if you're 18-20 you're eligible to apply.
To be able to apply for a credit card, you’ll need to be at least 18 years old. However, even if you meet this age requirement, your eligibility will be considered on a case-by-case basis, with providers looking at your credit report and income to determine whether or not they are happy to offer you credit. If you’re under 21 and seeking credit, our experts have compiled a guide of options and tips.
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If you’re under the age of 21, it’s unlikely you’ll have borrowed before and you will have a limited credit history as a result. This means lenders won’t be able to see whether you’re good at managing and repaying credit and they may be more reluctant to offer you a credit card. Similarly, you might not be earning a regular income yet, which means lenders might have further concerns about your ability to repay your debt.
If you want to know more about your credit score, it’s free and easy to access your credit score and report online with a number of companies, including Finder.
Can an 18 year old get a credit card?
Although it’s harder to get a credit card if you’re under the age of 21, it’s not impossible. Before applying, there are a number of steps that are worth carrying out to build your credit score and increase your chances of success. We explain more below.
How do I get a credit card if I’m between 18 and 21 years old?
One of the first steps you should take is to get visibility of your credit record through a free online service. Your credit record is essentially your financial history and will indicate to lenders how reliable you are as a borrower. Whenever you apply to open a credit card or store card or take out a loan or mortgage, the bank or provider will check your credit report to determine if you’re a good candidate to lend money to.
If you’ve never borrowed before, your credit score is likely to be low. This will also be the case for someone who has borrowed in the past but has missed repayments or defaulted on their debt.
By checking your credit report yourself, you’ll be able to see where your credit score sits and how likely you are to be accepted for a credit card. If your credit score is low, don’t panic, there are steps you can take to improve it. These include correcting any mistakes on your report and making sure you’re registered on the electoral roll.
It’s also sensible to open a bank account if you don’t already have one and see whether you can get an overdraft. Managing this responsibly will help you to build credit, as will paying any bills, including your mobile phone contract, on time each month.
How to choose your first credit card
When choosing your first credit card, you’ll need to consider what you are planning to use your credit card for. Are you planning to use it to help spread the cost of your purchases? Are you looking to earn rewards? Will you be using your card overseas? Once you’ve decided, you’ll need to compare credit cards and look at:
- The interest rate. It’s important to find out how much interest you’ll be charged if you don’t pay off your balance in full each month. Some cards will charge no interest on purchases for a number of months, but you’ll usually need a good credit score to qualify. Be aware that when a credit card is advertised with a representative APR (annual percentage rate), the rate only has to be offered to 51% of successful applicants. The remaining 49% are likely to be offered a higher rate.
- Rewards available. Some credit cards offer perks such as reward points for travel or shopping, or cashback. Again, though, you’ll usually need a good credit rating.
- Fees. Some credit cards charge annual fees, while you’ll also often be charged if you want to use your credit card overseas.
Before you make an application in full, you should always use an “eligibility checker”. Most banks or card providers now use free eligibility checkers which will give you an indication of how likely you are to get accepted for a particular credit card.
Because they use a “soft search”, this won’t leave a mark on your credit file for other lenders to see and it won’t impact your credit score. This means you’ve got nothing to lose by using one. You’ll simply get a better idea of the cards you are likely to get accepted for.
In comparison, if you apply for a credit card without using an eligibility checker, a “hard search” will be carried out and this can affect your credit history.
Comparison sites can check your eligibility with multiple card issuers in one go, – saving you a lot of hassle.
What’s the best credit card to get at 18
The best credit card to get at 18 is simply the cheapest credit card you can get accepted for. If you can get accepted for a credit card with a low-interest rate or even one that offers an interest-free period for a number of months, this is likely to be the best credit card for you.
Unfortunately, you’re unlikely to get accepted for these cards if you have little to no credit history. So one option that’s definitely worth looking at is a credit builder credit card. These are designed for those looking to improve their credit score over time.
Generally, these types of cards have a low credit limit and a high interest rate so you’ll need to pay off your bill in full every month. Your provider will regularly monitor your payment history and your credit limit may be raised over time if you prove you’re a responsible cardholder.
These cards rarely have many benefits or extras, but could pave the way for you to progress to a mainstream or low-rate credit card in the future if your credit score improves.
Alternatively, if you’re in further education, you could consider a student credit card. These are credit cards for young adults in part-time or full-time education who are unlikely to have a sizable credit history. However, they will often require you to have a student bank account with the same provider.
Best student credit cards
Some of the best student credit cards can be found below:
- HSBC Student credit card. With this credit card, you’ll get a credit limit of up to £500 and there’s no annual fee. To apply, you will need an HSBC student bank account.
- TSB Student credit card. This credit card offers a maximum credit limit of £1,000 and no annual fee. You’ll need a TSB student account to qualify.
What should you consider before getting your first credit card?
Before you apply for a credit card, you need to think about exactly what you plan to use it for and be sure that you only ever spend what you can afford to pay back.
If you have yet to build up a credit history, you’ll most likely have to apply for a credit card with a high interest rate and low credit limit. It’s crucial that you stay within this credit limit and aim to pay off your balance in full each and every month. Do this and you could see an improvement in your credit score within 6 to 12 months.
Bear in mind that if you’re late with a monthly repayment or you miss it completely, you will be charged a fee and this could have a negative impact on your credit rating. You must pay off at least the minimum monthly amount each month, ideally more.
What age should I get a credit card?
The best age to get a credit card is when you fully understand how they work and can use one responsibly. This means only ever spending what you can afford to pay back, and doing your best to pay off your balance in full each month to avoid building up debt.
Building up a credit score sensibly and carefully over time can stand you in good stead later on in life when you apply for additional credit products including a mortgage.
What is the best credit card for 19 year olds?
This will depend on whether you’ve been able to build up a credit history. If you haven’t, you might still be looking at credit builder cards or student credit cards. But if your credit rating has started to improve, perhaps because you’ve used an overdraft responsibly, and you also have a regular source of income because you now have a job, you might qualify for a credit card that offers 0% on purchases for a set time or even rewards such as cashback.
You can check your eligibility for a selection of cards using a comparison site. This won’t impact your credit score and can save you time and hassle.
If you don’t qualify for a mainstream credit card, you might get offered a credit builder credit card, or could apply for a student credit card if you’re in further education (this would be from the same bank that provides your student current account).
How can I build credit at 18-21?
If you want to build up a credit history and improve your credit score, there are several steps you can take:
- Get on the electoral roll. This is important even if you live at home or in a shared house as the information is used by lenders to confirm your name and address.
- Open a bank account. If you don’t already have one, opening an account and managing it well can help to improve your credit score, particularly if you have an overdraft. If you use an overdraft, try not to use the full amount and pay it off whenever you can.
- Add your name to bills such as an energy bill or mobile phone contract. These are classed as a form of credit and, providing you pay them on time, can help to improve your credit score.
- Use a credit card (responsibly). As mentioned above, any credit card you can get accepted for will help you improve your credit score, providing you use it sensibly.
Alternatively, some prepaid cards can also help you to build your credit score. The big advantage of prepaid cards is that no credit checks are carried out, making them easier to get accepted for. If you choose a credit builder service on your prepaid card, the provider will effectively lend you a year’s worth of monthly fees for you to repay over 12 months. If you do this on time, your credit score will go up.
Another option is to use a credit building service such as LOQBOX or Pave. With LOQBOX, you set up a direct debit to save a regular amount each month. These are then treated as finance repayments which are reported to a credit reference agency.
Similarly, Pave is a personal finance management app that connects your bank accounts and, for a monthly fee, works with you to improve your credit score.
CreditLadder is a tool that can help you show your timely rent payments in your credit file.
Improve your eligibility for credit cards with a boost to your credit score
LOQBOX offers a cost-free 12-month savings plan designed to improve your credit so that you can get approved for more products and lower rates.
- Save from £20 to £200 a month
- Build and improve your credit history
- Once you’ve finished unlock your savings
Tips for managing your credit card
If you do qualify for a credit card, it’s crucial that you use it sensibly to ensure your credit score improves over time. To do this, follow the tips below:
- Set up a monthly direct debit to ensure you never miss a payment.
- Always pay more than the minimum monthly repayment if you can – these are set at low levels and can result in you paying out a lot in interest. Only paying the minimum will also take you much longer to clear your debt.
- If you can afford to, pay off your balance in full each month to avoid paying any interest.
- Always stay within your credit limit.
- Never use your credit card for cash withdrawals – you’ll be charged a fee for doing so and interest will accrue from the date of the withdrawal, even if you pay off your balance in full that month.
How to get a credit card if you’re under 18 years old
If you’re under 18, you won’t be able to get a credit card. By law, anyone under the age of 18 cannot enter into their own credit agreement.
As an under 18 year old, your two options are:
- Prepaid cards. Reloadable cards that act like a debit card.
- Debit cards. Linked to your bank account.
Pros and cons of credit cards for 18-21-year olds
- Build or rebuild your credit. A credit card isn’t the only way to build credit, but it’s an excellent choice. When you use your card and consistently pay your bills on time, your credit score will increase which could help you when you come to apply for a mortgage for example.
- Safe and convenient. Instead of carrying a lot of cash, you can simply use your card. Most cards have contactless technology to pay for purchases of £100 or under which don’t require a PIN.
- Payment protection. Credit cards give you more protection than debit cards when things go wrong thanks to Section 75 of the Consumer Credit Act 1974. On purchases worth between £100 and £30,000, the provider is jointly liable with the retailer if you don’t get what you paid for.
- Spreads the cost of a large purchase. Credit cards can buy you more time if you need a large sum to pay for an expensive item, holiday or repair. You usually have up to 56 days’ interest free on items purchased on your credit card, which gives you time to pay it off. Some purchase credit cards also offer 0% deals for a set time.
- Encourages spending. If you’re prone to spending beyond your means, consider holding off on a credit card. You risk accruing huge amounts of debt that will be difficult to repay.
- Extra fees. As well as paying interest, you might have to stump up for annual fees, penalty charges for late payments, and foreign transaction fees. Do your research before opening a credit card and aim to pay off your bill in full every month if possible to avoid high interest charges.
- Cash withdrawals are expensive and bad for your credit record. Nearly every provider charges instant interest on any cash withdrawals or other cash advance transactions, along with hefty fees. It’s better to stick to your debit card for withdrawals.
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