Chase Freedom Unlimited®
- Why this is one of the best credit cards for young adults: This no-annual-fee card scores cash back easily with multiple bonus categories, making it a good fit for young adults who want rewards for everyday spending.
- The top features: Chase Freedom Unlimited earns 5% cash back on travel booked through Chase Ultimate Rewards, 3% back on dining and drugstore purchases, and 1.5% back on all other purchases. You’ll earn an extra 1.5% cash back across all categories on up to $20,000 spent in your first year with the card. New cardholders also enjoy a 15-month 0% introductory annual percentage rate on purchases and balance transfers.
- Another card to consider: If you want a more straightforward rewards program, consider the Citi Double Cash Card – 18 month BT offer, which offers 2% cash back on all spending, with 1% cash back when you make a purchase and an additional 1% back when you pay for purchases.
Discover it® Cash Back
- Why this is one of the best credit cards for young adults: This card earns 5% cash back in select everyday spending categories each quarter up to the maximum when you activate, making it a solid choice for young adults who want to earn cash back.
- The top features: Discover it Cash Back earns 5% cash back in different categories, such as Amazon.com, grocery stores, restaurants and gas stations, up to the quarterly maximum when you activate, and 1% back on all other purchases – all for no annual fee. Plus, Discover will match all the cash back you’ve earned after the first year.
- Another card to consider: If you want more of a say in your rewards, the Bank of America Customized Cash Rewards credit card earns 3% cash back in a category of your choice and 2% back at grocery stores and wholesale clubs on up to $2,500 in combined purchases in these three categories each quarter. Other spending earns unlimited 1% cash back.
Discover it® Student Cash Back
- Why this is one of the best credit cards for young adults: This no-annual-fee card is a strong choice for young adults who are students and want to get cash back on everyday spending.
- The top features: With Discover it Student Cash Back, you can earn 5% cash back in categories such as Amazon.com, grocery stores, restaurants and gas stations, up to the quarterly maximum when you activate. You’ll earn 1% back on all other purchases. New cardholders also receive a 0% introductory annual percentage rate for six months on purchases and a 10.99% introductory APR for six months on balance transfers.
- Another card to consider: If you want to maximize your cash back earnings without sticking to a quarterly schedule, check out the Capital One SavorOne Student Cash Rewards Credit Card. This card offers 3% cash back on dining, entertainment, eligible groceries and popular streaming services all year round.
Blue Cash Everyday® Card from American Express
- Why this is one of the best credit cards for young adults: Young adults who have frequent grocery store expenses will benefit from this card.
- The top features: The Blue Cash Everyday Card from American Express offers 3% cash back on up to $6,000 spent annually at U.S. supermarkets, then 1% back, among other rewards. Cardholders also get an introductory 0% annual percentage rate on purchases and eligible balance transfers for 15 months. You can earn up to $150 back in statement credits for checking out with PayPal in your first six months with the card, plus a $100 statement credit after spending $2,000 in purchases in the first six months with the card.
- Another card to consider: If you’re looking for higher rewards and are willing to pay an annual fee after your first year with a card, consider the Blue Cash Preferred Card from American Express, which offers 6% cash back on up to $6,000 in U.S. supermarket purchases each year, 6% back on select streaming services, 3% back at U.S. gas stations and on transit, and 1% back on other purchases.
Chase Freedom Flex℠
- Why this is one of the best credit cards for young adults: This no-annual-fee card is good for young adults who want to earn cash back in bonus categories and use a 0% introductory annual percentage rate.
- The top features: With Chase Freedom Flex, you’ll earn 5% cash back on up to $1,500 spent in rotating bonus categories each quarter you activate. You can also earn 5% back on travel booked through Chase Ultimate Rewards, 3% back on restaurant dining and drugstore purchases, and 1% back on all other purchases. New cardholders get a 15-month 0% introductory APR on purchases and balance transfers and can earn a $200 bonus for spending $500 in their first three months from account opening.
- Another card to consider: The Blue Cash Preferred Card from American Express may earn more, depending on where you spend. For example, the Blue Cash Preferred Card from American Express earns 6% cash back on up to $6,000 in grocery spending each year, while Chase Freedom Flex does not have built-in bonus cash back on groceries. Keep in mind that the Blue Cash Preferred Card from American Express charges a $0 intro annual fee for the first year, then $95.
Discover it® chrome
- Why this is one of the best credit cards for young adults: This no-annual-fee card offers cash back rewards that are useful for young adults who spend on gas and dining.
- The top features: Discover it chrome earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and all other purchases earn 1% unlimited cash back. Cardholders will also get a 0% introductory annual percentage rate for 15 months on purchases and eligible balance transfers, and Discover will match all of the cash back you’ve earned at the end of your first year.
- Another card to consider: If you’re open to a more flexible rewards strategy, consider Chase Freedom Flex, which earns 5% cash back on up to $1,500 on combined purchases in bonus categories each quarter you activate and 5% back on travel purchased through Chase Ultimate Rewards. You’ll also earn 3% back on dining at restaurants, including takeout and eligible delivery services, and 3% back on drugstore purchases. All other purchases earn 1% cash back.
Discover it® Student chrome
- Why this is one of the best credit cards for young adults: This card is a good fit for young adults who are students and want to earn cash back while building credit.
- The top features: This no-annual-fee card earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1% back on all other purchases. At the end of your first year with Discover it Student Chrome, Discover automatically matches all the cash back you’ve earned.
- Another card to consider: To earn more cash back, consider Discover it Student Cash Back, which offers 5% cash back in different categories, such as Amazon.com, grocery stores, restaurants and gas stations, up to the quarterly maximum when you activate.
Citi Custom Cash℠ Card
Capital One Quicksilver Student Cash Rewards Credit Card
- Why this is one of the best credit cards for young adults: For young adults who are students and spend a lot on hotels and rental cars, this card offers solid rewards.
- The top features: The Capital One Quicksilver Student Cash Rewards Credit Card offers 5% cash back on hotels and rental cars booked through Capital One Travel. This card earns unlimited 1.5% cash back on all other purchases and doesn’t have an annual fee. You can also earn $50 when you spend $100 in the first three months with an account.
- Another card to consider: The Blue Cash Everyday Card from American Express offers 3% cash back on up to $6,000 spent annually at U.S. supermarkets, on U.S. online retail purchases and at U.S. gas stations, respectively. The card earns 1% back on all other purchases.
U.S. News Survey
U.S. News Survey: Americans Are Eager for Personal Finance Education – and They Need It
Americans are still struggling to practice good credit habits, even as they grasp the basics of credit and recognize the importance of educating teens about financial literacy, a new U.S. News survey finds. The key discrepancy: While 52% of respondents say they knew how credit cards worked when they opened their first cards, 58% are also under the impression that carrying a balance on their credit cards boosts their credit scores. This is incorrect; carrying a balance will likely lower your score.
An overwhelming majority of respondents say financial literacy is a key missing piece of high school education; two-thirds say it should be mandatory for all high school students to learn about personal finance, while another quarter say it should be an elective class.
Additional Survey Insights
More than half of respondents got their first credit card in college or right after high school.
A secured credit card is a common starter credit card and way to build credit, and more than half of respondents say they either have a secured card (34.3%) or used to have one (18.5%).
The two most common questions respondents have about credit are how to improve their credit scores and how long information stays on their credit reports.
Respondents understand credit well enough to know when they’ve made mistakes: 21.8% of respondents say paying a bill late was their single biggest credit mistake, and 21.7% say their biggest mistake was carrying too high of a balance.
Respondents also understand the importance of checking their credit reports regularly: 46.5% checked a free report within the last three months, and only 6% have never checked their credit.
U.S. News Survey Methodology
- U.S. News ran a nationwide survey of 1,259 respondents through PureSpectrum on Feb. 14 and Feb. 15, 2022. Only people who had used a credit card for at least 10 years answered questions.
- The survey sample drew from the general American population, and the survey was configured to be representative of this sample.
- The survey asked nine questions relating to spending and credit habits.
Do Young Adults Need Credit Cards?
You can live without a credit card, but life may be easier if you have one. A credit card can help you manage your expenses more easily, earn rewards for everyday spending, build credit history, and obtain benefits and protections that debit cards don’t provide.
Credit cards have their drawbacks, of course. You risk piling up debt and owing interest charges if you don’t pay off your card balance.
Like a bank account, a credit card is a financial tool that young adults must learn to handle with care. Dipping your toes into the credit card pool as a young adult can help you establish good credit habits for a lifetime.
What Are the Pros and Cons of Credit Cards for Young Adults?
- Building credit. Every payment you make in full and on time will land on your credit report and help you build your credit score.
- Earning rewards. Put only essentials on the card, pay them off, and receive cash back rewards, points or miles. This can help you get rewards without blowing your budget. Many cards also offer sign-up bonuses, such as extra points, miles or cash back rewards, after you spend a certain amount within the first few months.
- Making large purchases. If you don’t have the cash for a large or unexpected expense, a credit card can be a backup. You can put a car repair or hefty medical bill on a card and pay for it over time, although you will owe interest.
- Paying more safely than with cash. Carry one card rather than bunches of bills, which is especially convenient when traveling or shopping. Also, credit cards limit your liability for unauthorized charges to $50 or may not hold you liable for anything. Liability with your debit card depends on quickly you report the loss.
- Learning how to manage money. You will see how an annual percentage rate works when you carry a balance, how to budget for a monthly payment and how to create a strategy for earning rewards. Your card will allow you to track spending in real time.
- Enjoying perks. Your card may come with perks such as price protection, extended warranty coverage, trip cancellation insurance and emergency travel assistance that can save you time and money.
- Potentially paying interest charges and fees. If you don’t pay off your card, you will owe interest, and a large balance can be difficult to clear with a high interest rate. Issuers also charge fees for late payments, balance transfers, foreign transactions and cash advances, among others. You could pay an annual fee just to use a card.
- Hurting your credit if you’re not careful. You will need to use credit cards responsibly to build your credit. Paying late or having a high card balance can damage your credit score. Set up autopay for your card’s minimum payment to avoid accidentally missing a payment and hurting your score.
- Managing the temptation to overspend. Create a budget and revisit it periodically to see where your money is going. Tracking your purchases is a good way to make sure you don’t use a card to spend beyond your means.
- Navigating the fine print. Trying to understand your card’s terms and conditions can be difficult. Contact the issuer for clarification if necessary.
Identify the most important features to you in a credit card to help you compare offers. You can narrow down your choices by asking yourself:
What are my approval odds? Know your credit score – some apps provide free scores – and stick to cards that fit your credit profile. Issuers may be able to preapprove or prequalify you online for a card with no harm to your credit, but these are not guaranteed credit offers.
What are your goals for the card? Knowing what you want to accomplish can help you settle on a type of card. Maybe you want to build or rebuild credit, earn rewards, or simply get more comfortable using a card.
What are my spending habits? Choose the card that best suits your needs. Consider rewards categories, bonus requirements and card fees as well as benefits. If you get a secured card, can you upgrade the card once you prove that you can manage credit?
Struggling to choose between similar cards? Look for rewards that don’t expire and no late fees or penalty APRs, plus an easily attainable bonus spending requirement. Apply for the card with the best overall package.
What Is the Easiest Credit Card to Get With No Credit?
Young adults with no credit have limited choices because many credit cards, especially ones with lots of perks, require good or excellent credit. Still, you have options:
- Secured credit cards. Secured cards are for consumers with no credit or limited credit history, or consumers looking to rebuild credit. You’ll pay a security deposit, typically $200 or more. Your deposit is often equal to your credit limit.
- Unsecured credit cards. An unsecured card with no security deposit may be an option if you have fair credit or better.
- Student credit cards. Young adults in college should consider student credit cards for building credit. This type of card often has no annual fee, may earn rewards and could offer free access to your credit score.
How Long Does Building Credit Take?
If you’re starting from scratch, you will need up to six months of payment history to build credit. Establishing strong credit requires paying back a loan or opening and using a credit account that reports your payments to at least one of the three major national credit bureaus.
For a FICO credit score, you will need at least one account open for six months or longer. A VantageScore takes one month of credit activity.
Paying your bills on time and using 30% or less of your credit limit can help you build a good credit history quickly. You can boost your score more quickly by using 10% or less of your credit limit.
The age of your accounts is also a factor in credit scoring – the older, the better. As a result, the first card you open is one you’ll want to keep for a long time.
Credit Card Tips for Beginners
Building credit and learning how to manage credit are helpful goals for most young adults using credit cards. Here are some ways to get off to a strong start:
Choose a credit card you can easily manage. Credit card offers can be attractive, with some touting tempting rewards and benefits. But high-value cards aren’t necessarily for beginners. For many young adults, a credit card with no annual fee and simple cash back rewards can be a good fit.
Pretend that your credit card is a debit card. Your credit limit shouldn’t be your spending limit. Set up a budget and track your purchases to know how much you can afford to spend each statement period. Interest charges can cause debt to pile up if you carry a balance.
Keep credit utilization low. Your credit utilization ratio, or the percentage of available credit you are using, should be 30% or less. On a credit card with a $500 limit, 30% is $150. If you need to spend more than 30% of your credit limit, ask your card issuer about raising your credit limit.
Use card rewards and benefits. You may be able to redeem rewards as cash back deposits in a bank account, or as gift cards or statement credits. Also, make sure you know your credit card’s benefits and use them for savings. For example, some credit cards provide rental car insurance, which means you may not need to pay extra for it when you travel.
Treat credit cards as a learning experience. You might make mistakes with credit cards, such as paying your bill late or blowing your budget, but you can bounce back. Learn from any missteps and resolve to improve your credit card habits as you get more practice using credit.
Best Credit Cards for Young Adults Methodology
Our team of experts uses a methodology to identify the credit cards most likely to fit your needs. We examine APRs, annual fees, issuer satisfaction ratings and other factors to determine what cards come out ahead. Learn more»