In this article, we’re exploring the best first credit card for young adults.
This article is part of our free series on how to unlock the best credit cards, including US credit cards for European residents, which you can access by clicking here.
That said, if you’re looking for a young adult’s first credit card, you’re in the right place. This article will help you navigate the available options and share the most important factors to consider.
Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.
Table of Contents
- Best First Credit Card for Young Adults
- Features to Look For in a Credit Card as a Young Adult
- How to Apply For Your First Credit Card
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Best First Credit Card for Young Adults
Best first credit card for young adults is typically a credit-builder credit card that helps establish good credit behavior and a solid credit history. Using a credit-builder credit card and establishing a good credit history will enable the individual to then apply for more attractive credit card options in the future.
Most major banks offer credit-builder credit cards to young adults. This includes individuals with no credit history, on account of never having a credit card before, and individuals with poor credit history. In both instances, the credit-builder credit card works the same to encourage good credit behavior with low credit limits and a reasonable interest rate.
In the following section, we will review a number of the best features that young adults should look for in their first credit card.
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Features to Look For in a Credit Card as a Young Adult
When it comes to choosing the best first credit card for young adults, there are a number of key variables to consider, including:
- Interest rate (Annual Percentage Rate or APR)
- Annual fees for maintaining the card
- Additional charges for specific purchases
- Restrictions or limitations
- Required secured balance (deposit held by the bank)
That said, if you already have established credit, you might be looking for more advanced (or attractive) credit card features, such as credit card air miles, or other features including:
- Lower interest rates
- Low annual fees (or reimbursements)
- Travel rewards programs
- Loyalty points programs
- Cash or spending incentives
We’ll take a closer look at these features now to help inform your decision about which of the available options is the best first credit card for young adults.
Credit Cards With Lower Interest Rates
For anyone who expects to carry a balance on a credit card, finding cards with a lower interest rate is incredibly important. This can make a considerable difference in the cost of maintaining a credit card each month, and lowering the interest rate can help make a particular card more attractive.
Credit Cards With Low Annual Fees
One of the key variables that can determine whether a credit card is worth having or not is the cost of maintaining the card. When it comes to cards that offer attractive bonuses and loyalty programs, they typically charge high annual fees, ranging from several hundred dollars up to nearly one thousand dollars per year. Depending on the card (and the annual fees), this may or may not be worth it. Therefore, finding cards with low annual fees is often an important consideration for prospective cardholders.
Credit Cards With Loyalty Points
Credit cards with loyalty points are available from most major card issuers. However, they typically require higher credit scores and have an annual fee applied to them. With this in mind, one of the most popular loyalty card programs is offered by American Express, which we’ll discuss further next.
If you’re looking for more information on credit scores, specifically how much a secured credit card will raise your score you can access our free article linked here to get started.
Credit Cards With Travel Rewards
While there are many credit cards with travel rewards available, very few of them offer the lucrative travel rewards that are available from American Express. That said, not all American Express programs are created equal. Instead, American Express cards issued in the United States offer some of the most attractive signup bonuses, rewards points, and cash bonuses. This makes the American Express card one of the most lucrative travel rewards cards.
How to Apply For Your First Credit Card
When it comes time to apply for your first credit card, there are a number of variables you should consider. In this section of the article, we’re going to look at a few of the most important variables in greater detail.
Compare Credit Card Features
As mentioned above, one of the main variables when it comes to choosing the best credit card is understanding the specific features that you are looking for. While most credit cards offer basic protection like enhanced security, fraud protection, and consumer protection, other features you may want to consider include loyalty programs, cash-back rewards, and no foreign transaction fees.
Understand How to Avoid Bad Credit
One of the most important factors when applying for a credit card is your credit score, which is essentially a reflection of your creditworthiness. With this in mind, avoiding bad credit is incredibly important. A few of the ways that you can avoid bad credit include paying your credit card bills on time, never using more than 25% – 35% of your available credit limit, and limiting the number of credit applications you submit.
Apply For a Credit Card You Are Eligible For
When it comes time to apply for a credit card, you should only apply for credit cards that you qualify for. Otherwise, you will have more credit pulls on your file than you require, which will have a negative impact on your credit score.
Build Credit Card History
If you have bad credit or have yet to establish credit, it can be helpful to first focus on building your credit history. There are a number of ways that you can build your credit history, including obtaining a credit-builder credit card and establishing a history of good credit behavior. Another option is to be added to a card of a spouse or relative as a secondary card holder, which will enable you to benefit from the good credit of that individual.
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into options for the best first credit card for young adults. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Is the Best Credit Card for Beginners?
The best credit card for beginners is typically a credit-builder credit card. Credit builder cards allow the cardholder to establish a good credit score before moving onto cards that require applicants to have a higher credit score in order to qualify. They are also ideal cards for individuals looking to improve their credit after a period of bad credit.
How Old Do You Have to Be to Get a Credit Card?
You have to be 18 years old to get a credit card in most jurisdictions. For example, you have to be 18 years old to get a credit card in the United Kingdom, the United States, and Canada. That said, it can still be difficult to obtain a credit card unless you have a regular income, a cosigner, or you place a fixed deposit in order to obtain a secured credit card instead of an unsecured credit card.
What Is the Best Credit Card for a Young Professional?
The best credit card for a young professional is one that helps solidify their credit score. In most cases, this means a credit card that reports to multiple credit agencies. This will then allow the individual to have more choices when applying for more advantageous credit cards in the future.
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