Banking • Budgeting •

March 2, 2022

The Best Credit Cards for Young Adults: What to Look for and Which is Right for You

The best credit cards for young adults and college students have low fees and provide perks. Read our list of the top cards.

The best credit cards for young adults have low interest rates and provide rewards

A credit card is often the first form of credit for young adults and college students. When managed well, a credit card can help you make the most out of your money.

A credit card can help you cover a cash crunch while you wait for a financial aid check or a paycheck. It can also be a good way to build up a credit history—a record of your use and repayment of debt. Having a good credit history is always a good idea!

Let’s review what a credit card is, some tips to help you choose the right credit card, and a list of the best credit cards for young adults.

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What is a credit card for young adults?

A credit card for young adults is a specific credit card designed for current college students, recent college grads, and those who have landed their first post-college job. 

What is a Credit Card for Young Adults?

The best credit cards for young adults have lower credit score requirements than regular cards, charge lower fees, help build credit, and provide rewards. Some credit cards for young adults may require proof of enrollment in an eligible college or for you to be within a certain age range.

How is a young adult credit card different from a regular credit card?

A credit card for young adults is designed with a current college student, recent grad, and first-time full-time worker in mind. A common feature of these 3 groups is no or limited credit history. 

Typically, a credit card for young adults has lower credit history requirements than those of a regular credit card. For example, a regular credit card may require you to have at least 3 years of history of managing debt, while a credit card for young adults may be ok with one year or even no history at all!

Lower credit score

Financial institutions look at your use and repayment of debt, and they use this history to calculate your credit score. Typically, the higher and longer your credit score, the stronger your credit history!

The student or young adult version of a regular credit card usually requires a lower credit score. If a regular credit card accepts a credit score within 670-850, then the young adult version may accept one in the 580-740 range.

Age and school requirements

Some credit cards may be available to you through a student bank account or student card. In those cases, you may need to provide proof of enrollment at an eligible school.

Besides the school requirement, you may have to prove that you’re at least 18 and below a certain age. Typically, the age limit is 24.

No fee

Young adult credit cards often charge lower fees or no fees during a period. That period could be a couple of years after opening your account, one year within graduation, or until you turn 24.

What are some common features of a credit card for young adults?

Common features of a credit card for young adults include:

  • You can use it online and in person: A unique number identifies your card so that you can make purchases online. Of course, you’ll still receive a physical card via the mail, and you can use that one for shopping at retail stores and eating at restaurants.

  • You can manage your card online or on your mobile device: Most credit cards for young adults provide you access to your account through a website or mobile app. There, you can check your balance, view your transaction history, and make payments. 

  • You can make payments in many ways: Since an important part of owning a credit card is paying it back, most credit card issuers give you various options for making payments. The most common ways to make monthly payments are mailing a check and paying through a bank transfer.

  • You may receive cashback rewards: Some credit cards for young adults may offer cashback rewards or other types of credit card rewards (e.g., points that can be redeemed for gift cards, air miles, etc.). Terms often apply, so check the fine print.

  • You may be able to withdraw money from an ATM: Some credit cards allow you to make ATM withdrawals using your physical card. However, those cards often charge a higher interest rate for withdrawals. So, it’s a good idea to pay back withdrawals as soon as you can.

Common Features of Credit Cards for Young Adults

Can I keep my credit card for young adults forever?

Many credit cards for young adults have features that end once you turn age 24, though some keep the benefits beyond that age. Before opening your account, check the age limit and terms.

Why should I have a credit card for young adults?

You may already have a student debit card to help you make payments faster and more easily. However, all debit cards have 2 big limitations.

Debit card spending is limited to your bank account balance

Let’s say that you have $400 in your bank account. You can only spend up to $400 without paying an overdraft fee. If you were to have a credit card with a $400 credit limit, then you can spend up to an extra $400. 

Having a credit card allows you to increase your purchasing power beyond your bank account balance in times of need.

Debit card use doesn’t build your credit history

Making payments with your debit card doesn’t build a credit history or contribute to your credit score. But paying back your credit card balance is one of the most effective ways to build up a credit history! 

Most credit cards report your account balance and payments to the major credit bureaus—agencies that compile all your information about how much debt you have and your debt payment history.

Any creditors you can ask for loans will take a look at how you handle credit card debt. Making on-time payments of the entire balance on your credit card every month is a great way to develop a sound credit history for young adults, college students, and recent grads.

In summary, the responsible use of a credit card for young adults helps you cover cash gaps and allows you to earn an excellent credit score.

How to Build Credit History with a Credit Card for Young Adults

What do I look for in a credit card for young adults? 

There’s more than one type of credit card for young adults. There are rewards credit cards, college student credit cards, secured credit cards, and cashback credit cards. 

While having many types of credit cards and credit card issuers is great, sometimes it can feel overwhelming!

Let’s review some important features that you should include when evaluating if a card will fit your financial needs.

What to Look For in a Credit Card For Young Adults and College Students
  • Low or no annual fee: Banks are for-profit businesses, so it’s understandable that they need to charge something to keep a product profitable. Still, there are many financial institutions that will cater to young adults and college students by waiving some or all fees for a period. Be on the lookout for them.

  • Low credit score requirement: Finding a card that accepts a lower credit score is a good idea for young adults for 2 reasons. First, it increases the chance of being approved for your card. Second, it improves your chances of getting a lower interest rate if you already have an existing credit history.

  • Low-starting APR: The annual percentage rate (APR) is the fee that a financial institution charges you for money that you borrow. The APR is expressed as a percentage. If you borrow $100 on a credit card with a 14% interest rate, you’ll pay $14 for that $100. The lower the APR, the more money you save in fees!

  • Sign-up bonus: Banks know that you have options. To compete for your business, some provide a sign-up bonus that could be a 0% APR for 6-18 months, a one-time cash bonus, bonus points on their reward system, or something else. When comparing 2 similar options, a generous intro bonus may be the tie-breaker.

  • Cashback offers: Some credit cards for young adults provide you rewards for all cash expenses, certain eligible purchases, or in just some categories (e.g., gas stations, restaurants). Some cards may have rotating categories. 

  • Online banking access at no cost: Many banks and credit unions offer online banking to help you track your spending, balance, and credit card statement history and make automatic payments. 

  • Mobile app: Online banking is nice, but mobile banking is easier and faster. You’ve got more important things to take care of like studying for exams, writing assignments, and working to get that money!

  • Free credit monitoring service: One of your main reasons to get a credit card is to build up your credit history. Having a credit monitoring system that gives you monthly updates on how you’re doing will keep you motivated to make payments on time and let you watch your credit score grow!

  • Reporting to major credit bureaus: Check that the credit card issuer that you’re considering reports to the major credit bureaus. It’s crucial if you’re applying for a credit card for building credit.

Best credit cards for young adults 

Now that we’ve reviewed common credit card features and what to look for in credit cards, let’s take a look at some of the best credit card options available for young adults and college students.

Best Credit Cards for Young Adults and College Students

1. Discover It Chrome Student Credit Card

The Discover It Chrome credit card is a good option for students with a good to fair credit history. The student credit card version of the Discover It Chrome starts at a 1% higher APR, but it accepts lower credit scores.

This credit card offers a standard 1% cashback on everyday purchases. The cashback at gas stations is 2%. 

You’ll have access to a credit score estimator tool that provides you with a FICO credit score—one of the most widely used types of credit scores by lenders.

Features making it one of the best credit cards for young adults:

  • No rotating categories to keep track of for cashback

  • Higher cashback at gas stations

  • Free FICO credit score report and tips on how to improve it

  • No-annual-fee card

Things to watch out for:

  • 2% cashback at gas stations is limited to the first $1,000 every 3 months

  • Standard 1% cashback rate is lower compared to other cards

2. Chase Slate Edge Credit Card

Chase is a credit card company offering more than 1 type of card. The Chase Slated Edge credit card is a good match for young adults and college students for 4 reasons.

  • First, it often provides a 0% intro APR for 18 months on all purchases and balance transfers. 

  • Second, you can break down eligible purchases (minimum $100) into smaller payments without interest for a fee. 

  • Third, you’ll get an automatic review within the first 6 months for a higher credit limit if you spend $500 and pay it back on time. 

  • Fourth, the card provides a credit score estimator tool (Chase Credit Journey) that monitors your credit history activity.

Features making it one of the best credit cards for young adults:

  • No annual fee

  • Free credit monitoring tool

  • 0% intro APR

Things to watch out for:

  • 0% intro APR offer expires after 18 months

3. Capital One Platinum Credit Card 

The Capital One Platinum credit card is a good no-annual-fee card for young adults and college students with a fair credit history. 

This Capital One card’s credit score estimator tool is called CreditWise. This is a free service, and it allows you to track your credit profile. Also, you can set it up so that you receive automatic alerts when your credit profile changes.

This card also has a comprehensive program for purchase protections.

Features making it one of the best credit cards for young adults:

  • No foreign transaction fees

  • Free credit monitoring tool

  • High reviews from current users

Things to watch out for:

  • Higher APR than other cards for young adults

4. PNC Cash Rewards Visa Credit Card

PNC is on our list of best student bank accounts, so it makes sense that the PNC Cash Rewards Visa credit card appears on this list!

You can earn 1% cashback on all eligible purchases. On top of that, you can gain 4% on gas station purchases, 3% on dining purchases, and 2% on grocery purchases.

The cashback rewards are statement credits, meaning that you receive the cash at the time your credit card statement is issued.

Features making it one of the best credit cards for young adults:

  • Higher cashback on eligible purchases through statement credits

  • No annual fee

Things to watch out for:

  • Minimum $25 to redeem cashback rewards

  • Keeping track of rotating cashback categories

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Conclusion 

A credit card for young adults is a great first step toward building your credit history. Having a good credit history helps you lower the cost of your future loans, such as auto loans, student loans, and mortgages.

Shop around and compare credit cards for young adults before choosing one. Pay close attention to the fine print of promotional features. 

For more financial tips, check out more articles in our resource center, and join Mos.com to get connected with financial aid to help fund your degree!

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