Compare the best credit cards for young adults

If you're a young adult in 2019, you might feel like the odds are stacked against you when it comes to finances. So could a credit card help you?

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Millennials are too often criticised for not being prepared when it comes to money, despite being dealt a tough hand. With sky-high student loan debts and eye-watering house prices, making a strong start at managing personal finances is more important then ever. But the fact that you’re reading this means you’re already ahead of the curve.

When you’re younger, it’s unlikely that you’ll have much of a credit history – which is what lenders normally use to evaluate credit card applications. Our guide looks at what you can do about it and what your options are.

Should I be getting a credit card?

It really depends on your personal circumstances. First of all, keep in mind that if you’re under 21, you can only obtain a credit card if you have your own independent source of income – typically, if you’re employed or receiving a student loan. If that isn’t the case, you won’t be able to get one in any case.

Secondly, if you’re completely new to banking and have never, for example, had a current account, you should probably start from there. A regular current account with a debit card and overdraft facility will usually cover most of your financial needs.

If, instead, you do already have some financial expertise and are either looking at getting some extra flexibility for paying your purchases, or if you want to get an early start at building your credit score, a responsibly-used credit card could be a good idea.

What are my options?

Be practical and realistic. Don’t expect to get super-premium gold, platinum or black cards or the longest 0% interest deals – it’s unlikely you’ll get approved. The best offers on the market are restricted to those with established, excellent credit records.

This may be the first time you’re trying to borrow money in any form. Your credit report could be a white sheet, meaning lenders would consider you a high-risk borrower because they have no way of knowing whether you’re the kind of person who usually pays off their debts on time.

For this reason, if you do get a credit card, you’ll probably be offered a low credit limit and possibly a higher interest rate. If you use the card correctly, it’s no big deal: as long as you clear your balance in full every month, you won’t be charged any interest at all. However, if you don’t, a credit card can quickly become a very expensive way of borrowing money.

Depending on your personal and financial circumstances, here are some options you may be interested in as a young adult.

  • A student card. If you’re enrolled in college or uni, things may become a bit easier because there are credit cards that are specifically designed for students. The interest rates they apply on purchases are fairly standard and there’s usually no annual fee.
  • A credit builder card. These credit cards are meant for people who have bad or zero credit history – they usually won’t charge an annual fee but have high interest rates. Because of this they’re best treated as a “stepping stone” to products with better rates.
  • A low-rate card with no annual/monthly fee. To get approved for one of these cards, you’ll probably need to be in full-time employment and in your twenties. Don’t be surprised if you’re offered a card, but at a slightly higher rate – card issuers are only obliged to offer the advertised representative APR to 51% of customers.
  • A fee-free overdraft. If you only occasionally need a little extra cash to make it to the end of the month, an overdraft may be an option to consider – many student accounts offer fee-free overdrafts whose limit increases while you progress with your studies, sometimes up to £1,500 or £2,000.
  • Become an authorised user of someone else’s card. If you can’t get a credit card all by yourself, you could ask someone (your parents, for example) to become an authorised user on theirs. It’s a good compromise because the financial responsibility will be lifted from your shoulders, but in most cases it will still show on your credit report. It won’t work miracles, but it should help your score a bit.
  • A prepaid card. If you’re a complete newbie when it comes to banking, a prepaid card is probably a better option. It’s very different from a credit card – you are not borrowing any money – but you can top it up and use it do deal with your daily spending.
  • Credit-building tools. If you’re seeking to kickstart a good credit record and aren’t so fussed about borrowing money, tools such as Loqbox offer an innovative approach.

LOQBOX

Build your credit history while you save with LOQBOX

  • Choose what you want to save – from £20 to £200 a month
  • Build your credit history with the credit reference agencies
  • Leave with an improved credit history, plus all your savings
Promoted

Credit cards that might be suitable for young adults

Table: sorted by representative APR, promoted deals first
Updated October 19th, 2019
Name Product Purchases Annual/monthly fees Credit limits Rep. APR Incentive Representative example
12.9%
£0
Min. limit £300, max. limit not specified.
12.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).
0% for 3 months reverting to 17.9%
£0
Min. limit not specified, max. limit £350.
17.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 17.9% (variable) p.a., your representative rate is 17.9% APR (variable).
18.94%
£0
Min. limit £350, max. limit £350.
18.9% p.a. (variable)
Representative example: When you spend £350 at a purchase rate of 18.94% (variable) p.a., your representative rate is 18.9% APR (variable).
18.95%
£0
Min. limit £250, max. limit £500.
18.9% p.a. (variable)
Representative example: When you spend £500 at a purchase rate of 18.95% (variable) p.a., your representative rate is 18.9% APR (variable).
18.95%
£0
Min. limit £250, max. limit £500.
18.9% p.a. (variable)
Representative example: When you spend £500 at a purchase rate of 18.95% (variable) p.a., your representative rate is 18.9% APR (variable).
18.9%
£0
Min. limit not specified, max. limit £500.
18.9% p.a. (variable)
Discounts and exclusive offers for dining experiences, leisure activities and shopping available through HSBC Home and Away.
Representative example: When you spend £500 at a purchase rate of 18.9% (variable) p.a., your representative rate is 18.9% APR (variable).
19.95%
£0
Min. limit £500, max. limit £1,000.
19.9% p.a. (variable)
Representative example: When you spend £1,000 at a purchase rate of 19.95% (variable) p.a., your representative rate is 19.9% APR (variable).

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Updated October 19th, 2019
Name Product Annual/monthly fees Min. credit limit Max credit limit Min income Rep. APR Incentive Representative example
£0
£250
Subject to status: £1,000
Not specified
24.7%
Stay in control of your account with online servicing, a mobile app, SMS and email alerts.
Representative example: When you spend £1,000 at a purchase rate of 24.7% (variable) p.a., your representative rate is 24.7% APR (variable).
£0
£500
Subject to status: £1,500
£15,000
24.9%
No fees for making purchases or withdrawing cash abroad – currencies are converted at the standard Mastercard exchange rate.
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
£0
£250
Subject to status: £1,000
Not specified
29.3%
Representative example: When you spend £1,000 at a purchase rate of 29.3% (variable) p.a., your representative rate is 29.3% APR (variable).
£0
£250
Subject to status: £1,000
Not specified
29.8%
You could get a credit limit increase after your 5th statement and further increases every 5 months, up to £4,000.
Representative example: When you spend £1,000 at a purchase rate of 29.84% (variable) p.a., your representative rate is 29.8% APR (variable).
£0
£100
Subject to status: £600
£10,000
34.9%
Earn Asda vouchers every time you shop - 1% cashback on all Asda spend, 0.2% on all other transactions. Once £2.5 is earnt a voucher can be downloaded to spend in Asda stores.
Representative example: When you spend £1,200 at a purchase rate of 34.9% (variable) p.a., your representative rate is 34.9% APR (variable).
£0
£150
Subject to status: £1,000
Not specified
39.9%
Representative example: When you spend £1,000 at a purchase rate of 39.94% (variable) p.a., your representative rate is 39.9% APR (variable).
£0
£500
Not specified
Not specified
26.9%
Representative example: When you spend £1,200 at a purchase rate of 26.95% (variable) p.a., your representative rate is 26.9% APR (variable).
£0
£250
Subject to status: £1,500
£5,000
27.5%
Collect 1 Tesco Clubcard point per £4 spent (£4 minimum) in Tesco and 1 Clubcard point per £8 spent (£8 minimum) outside Tesco in each purchase transaction.  Must have available credit to collect Clubcard points. Clubcard points are turned into Clubcard vouchers every 3 months or sooner using Faster Vouchers. Clubcard vouchers can be used in Tesco or with Clubcard Reward Partners to get even more value on dining out, hotel stays and travel.
Representative example: When you spend £1,200 at a purchase rate of 27.542% (variable) p.a., your representative rate is 27.5% APR (variable).

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Updated October 19th, 2019
Name Product Purchases Balance transfers Annual/monthly fees Rep. APR Incentive Representative example
0% for 1 months reverting to 5.94%
0% for 1 months reverting to 6.054%
£0
5.9% p.a. (variable)
1 Tesco Clubcard point per £4 spent (£4 minimum) in Tesco and 1 Clubcard point per £8 spent (£8 minimum) outside Tesco in each purchase transaction. Exclusions apply. Clubcard points collection rates are subject to change. Must have available credit. Clubcard points are converted to Clubcard vouchers which can be used on your shopping in Tesco, or get even more value through Clubcard Rewards Partners.
Representative example: When you spend £1,200 at a purchase rate of 5.94% (variable) p.a., your representative rate is 5.9% APR (variable).
9.9%
6.9%
£0
9.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 9.9% (variable) p.a., your representative rate is 9.9% APR (variable).
9.9%
6.9%
£0
9.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 9.9% (variable) p.a., your representative rate is 9.9% APR (variable).
6.9%
6.9%
£0
6.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 6.9% (variable) p.a., your representative rate is 6.9% APR (variable).
4.9% for 48 months reverting to 8.9%
4.9% for 48 months reverting to 8.9%
£0
8.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 8.9% (variable) p.a., your representative rate is 8.9% APR (variable).
9.95%
9.95%
£0
9.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 9.95% (variable) p.a., your representative rate is 9.9% APR (variable).
9.9%
9.9%
£0
9.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 9.9% (variable) p.a., your representative rate is 9.9% APR (variable).
9.9%
9.9%
£0
9.9% p.a. (variable)
Representative example: When you spend £1,200 at a purchase rate of 9.9% (variable) p.a., your representative rate is 9.9% APR (variable).

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How can I find a competitive credit card?

Comparing financial products is never easy (otherwise here at Finder we’d all be unemployed!), especially when your options are somewhat limited. However, if you do your homework in advance there’s no reason why you shouldn’t be able to pull it off.

Step 1: Make friends with your credit score

You obviously won’t benefit from it right away, but improving your credit score should be an ongoing goal. Some of the things you can do, such as getting on the electoral register, are pretty straightforward. Head to the bad credit section of our website to learn more.

Step 2: Think about what you need, but also about what you can get

You may be tempted to just look for the best credit cards on the market, those with the best rewards perhaps. Don’t do that – you’ll waste loads of time and probably won’t get them anyway. Instead, think of why you need a credit card (to spread out some occasional expenses, improve your credit score, or both?) and prioritise the features that will give you most of what you need. Also, only browse cards that don’t demand an amazing credit history.

Step 3: Compare

Credit cards have dozens of different features, but once you know what you need, you’ll also know which one to compare. As a rule of thumb, when you start with credit cards you should look for no annual fees and broad eligibility criteria. Interest rates may be higher than you expect and the credit limits will probably be low. If you opt for a student card, bear in mind that they’re usually tied to a student bank account meaning you have to have both with the same bank.

Step 4: Use an eligibility tool

Once you think you’ve made a choice, don’t apply right away as full applications impact your credit score, albeit only slightly. Instead, most lenders allow you to check your eligibility first – you’ll be asked to fill in a short form with your details, and they’ll run a “soft check” that will tell you if your application is likely to be accepted, without appearing on your credit report.

Step 5: Apply

If you haven’t skipped any of the previous steps, this one should be a piece of cake. Have all your personal and financial details ready and always provide accurate information. You can usually apply online and it shouldn’t take longer than 10-15 minutes.

Step 6: Set up a direct debit for repayments

Protect your credit score by setting up a direct debit to cover at least the minimum required payment each month. If you can, set it up to clear the full balance each month – that way you’ll usually avoid interest altogether.

Pros and cons of getting a credit card as a young adult

Pros

  • It allows you to spread your expenses. This can be handy for those months when you have most expenses to deal with.
  • It helps you build your credit score. The sooner, the better for your financial future.
  • You might even bag a few perks. Don’t expect much when it comes to rewards – they probably shouldn’t be your primary focus – but you may be able to collect a few loyalty points as you spend.
  • You learn early how credit cards work. Which means that when the time comes to get a new, better one, you’ll already know it all.

Cons

  • Low credit limits. At the beginning, lenders won’t trust you with much credit, but credit limits can be reviewed once you’ve had a card for a while.
  • High interest rates. You really should avoid carrying a balance from month to month.
  • Risk of getting into debt. Always be careful when borrowing money – interest-based debt can easily spiral out of control.
  • Risk of damaging your credit score. If you don’t use it responsibly (missing repayments, going over your limit, etc), you stand to hurt your credit score.

Frequently asked questions

We exist to help you find better. The offers we've compared on this page are from a range of products whose details we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations of these) aren't product ratings, although we always explain what's great about a product when we highlight it; this is subject to our terms of use. When you make major financial decisions, it's wise to consider getting independent financial advice. Always consider your own financial circumstances when you compare products so you get what's right for you.

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