Opening your first credit card is a big step in your journey to becoming a financially responsible and independent young adult. But with all of the different banking options out there, it can be challenging to know where to start! Credit cards come will a lot of responsibility. However, they also can offer significant benefits, especially if you are a young adult or college student. These perks include cashback, reduced fees, travel rewards programs, and much more.
When opening a credit card, it’s important to find the right fit for your personal spending habits and savings goals. So, we’ve compiled a list of the best credit cards for young adults based on perks and application ease. (Yes, you’ll have to apply – more on that later). If you are considering starting your credit journey, you’ve come to the right place.
You might not already know this, but in order to open a credit card, you’ll have to apply! Yep – cue the college application flashbacks! In order to open an account with your chosen credit card company, you’ll need to provide a bit of information about you and your financial status. They want to be sure you have what it takes to be a trustworthy cardholder.
Luckily, the process of applying for a credit card is relatively easy – as long as you have the correct documents on hand! Before sitting down to start the application process, you’ll want to gather information such as your Social Security Number, employment documents, and the specifics regarding your current bank, where you have a checking and savings account. So, start digging through your drawers to track down these documents! Once you have located them, the application process will be easy peasy!
After you have submitted your application, hang tight! It might take a few days for the credit card company to approve or reject your application to become a cardholder.
Once you are accepted, it’s time to celebrate! And keep track of making on-time payments, of course.
If you are feeling concerned about your low credit limit, don’t fret. This is common for first-time cardholders, especially since you are a young adult! Building credit is a process that takes time and dedication. As long as you are responsible when making payments and keeping track of your cash flow, you’ll be able to build your credit in no time.
Now, let’s take a look at some of the best credit cards you can apply for as a young adult.
This credit card is our personal favorite! With a Discover student card, you will pay no annual fee. So, this means you will have no initial investment to pay when opening your card. You will also be able to earn 5% cash back on select purchases! Cash back is a major bonus for cardholders who make frequent purchases. Discover changes their cash back categories every few months, so there is always something different to save on. Examples include; grocery stores, gas stations, drugstores, Amazon purchases, and more!
What exactly is cash back, you ask? Essentially, cash back is when credit card companies reimburse their cardholders a small percentage of purchases they make during the month.
Here is an example to make it simple:
Let’s stay I purchase an item at the grocery store for $20. If my Discover card offers 5% cash back on grocery purchases this rotation, I will get $1 off my bill at the end of the month for making this purchase.
Another reason to love the Discover student card is that it will match your cash back earnings at the end of your first year of being a cardholder. Plus, students who earn a 3.0 GPA or higher earn a $20 credit every year to incentivize them to work hard and earn good grades.
The Capital One Journey Student Card is another great option for young adults who are hoping to begin earning credit. Again, this card offers no annual fee, which is a huge perk right off the bat! Cardholders will enjoy 1% cash back on all purchases made using the card, which can get boosted to 1.25% / month if the bill is paid on-time. All that cash back can really add up!
Cardholders will also benefit from the $60 Streaming Subscription Credit. This card offers $5 per month for 12 months on streaming services if you pay on-time.
Whether you are a Capital One cardholder or not, you will have access to CreditWise, a unique service offered by this company. This tool allows you to keep track of your credit score and explore information to help you build a strong credit profile.
American Express offers a wide variety of credit cards to potential cardholders. The Blue Cash Everyday Card is a great option for anyone who is just getting started. This card offers no annual fee and significant perks for using the card to pay for purchases.
For example, the card offers 20% cash back on Amazon purchases made within the first 6 months of card membership, along with $150 back after spending $1000 in the same time frame. Also, members will enjoy 2% back at gas stations, 3% at supermarkets, and 2% at select department stores.
The Bank of America Cash Rewards Card is another great option for young adults. They also offer other card options, such as a travel rewards card and premium rewards. However, we recommend going with the most basic card, especially if it is your first time being a credit cardholder. The basic cash rewards card allows members to enjoy a $200 bonus offer after making at least $1000 worth of purchases during the first 90 days of opening the card.
1% cash back will be awarded on all purchases, while the cardholder gets their choice of industry to enjoy 3% cash back in. For example, the cardholder can choose to enjoy 3% cash back on online purchases if they are a frequent e-commerce shopper.
Last but not least! Chase is one of the only credit card companies where we recommend you open a card that is one step above their most basic option. The Chase Freedom Unlimited Card offers no annual fee and competitive cash back opportunities.
3% cash back will be awarded to members to make purchases at restaurants, including takeout and delivery! This is a great option for anyone who enjoys eating out or is making an effort to do so more often in order to support small businesses during the pandemic. 3% cash back can also be enjoyed on all drugstore purchases, and 1.5% will be given for all other purchases made with the card.
Have you used any of these credit cards? What are your thoughts on the benefits outlined in this article? Let us know in the comments below!
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