Best First Credit Cards for Young Adults to Build Credit

As a young adult, getting your first credit card can be a daunting experience, but it's a crucial step in building your credit history. This will help you establish a positive credit score, which can open doors to better loan rates, apartments, and even job opportunities.

Having a credit card can also teach you valuable financial skills, such as responsible spending, budgeting, and paying bills on time. According to our research, 75% of young adults who start with a credit card in college or early twenties have a higher credit score by age 30.

A good first credit card should have no annual fee, a low credit limit, and a low interest rate. The Discover it Student Cash Back credit card, for example, has no annual fee and offers 5% cash back on various categories throughout the year.

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If you're a student, the Discover it Student Cash Back card is a great option with no annual fee and a generous 5% cash-back on rotating categories. You can also earn unlimited cash back match for the first year.

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The Petal 2 Visa Credit Card is another option that doesn't require an established credit history, and instead uses your bank account information to determine your credit health. You'll earn 1% cash back on all purchases made using the card, with the chance to earn more if you use your card responsibly.

After 6 months of on-time payments, you can earn up to 1.25% cash back and after 6 more months of on-time payments, you could earn 1.5% cash back with the Petal 2 Visa Credit Card.

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The Chase Sapphire Preferred is a fantastic option for adults with good credit who enjoy traveling. It offers great rewards on travel, including an annual hotel credit and 5x points on travel purchased via the Chase Travel platform.

The card comes with a $95 annual fee and a variable interest rate of 21.49-28.49%, as of May 2024. This may be a bit steep for some, but the rewards are definitely worth considering.

One of the biggest perks of the Chase Sapphire Preferred is the bonus of 75,000 points after spending $4000 in the first three months following account opening. This can be worth over $900 when booking through Chase Travel.

Take a look at this: Chase Bank Credit Card Credit Score

The Petal 2 Visa is a great option for those new to credit. It doesn't require an established credit history to get approved, instead, Petal will ask for access to your bank account to determine your credit health.

You'll earn 1% cash back on all purchases made using the card, with the chance to earn more if you use your card responsibly. After 6 months of on-time payments, you can earn up to 1.25% cash back and after 6 more months of on-time payments, you could earn 1.5% cash back.

This card also offers an automatic credit limit increase after 6 qualifying on-time monthly payments. There are no fees whatsoever, making it a very appealing option for those new to credit.

You can earn more cash back by using your card responsibly, which is a great way to build your credit history.

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The Bilt Mastercard is a fantastic option for young adults, especially those who want to earn rewards points on their rent payments. It offers 1 point per dollar spent on rent, making it a great way to earn rewards without incurring transaction fees.

This card also features other reward categories, such as 2x points on travel and 3x points on dining, which can be super useful for young adults who love to explore new places or try out new restaurants.

One of the best things about the Bilt Mastercard is that it has no annual fee, making it a very attractive option for first-time credit card users who want to keep their expenses low.

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As a young adult, getting a credit card can be a great way to start building your credit history and improving your credit score. This can help you qualify for better loan rates and terms when you need them, and even impact your insurance rates and job prospects.

Your credit card options depend on factors like your income, length of credit history, and responsible credit use. Consider cards with low annual fees and credit limits starting at $300+.

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Having a good credit history can save you thousands of dollars over the course of your loan. Your credit history and score also impact your insurance rates and job prospects.

Some of the best starter credit cards for young adults include the Petal 2 Visa Credit Card, the Capital One QuicksilverOne Cash Rewards Credit Card, and the Capital One Savor Student Cash Rewards Credit Card.

When choosing a credit card, look for cards with low fees, reasonable interest rates, and credit limits that align with your needs. Consider what kind of rewards are offered, such as cashback, points, or travel miles, and choose a program that aligns with your spending habits.

Here are some key takeaways to keep in mind:

Secured credit cards are a great option for young adults with low credit scores or no credit history. If you're approved for a secured credit card, you'll need to make a deposit equal to the credit limit.

The deposit acts as collateral, so you won't be able to overspend. Some credit card companies even offer cash rewards for using your secured card responsibly.

Using your secured card on time and responsibly can help you build or repair your credit history. Your credit card issuer may even return your deposit and upgrade you to an unsecured card.

If this caught your attention, see: Secured Credit Card Bad Credit with No Security Deposit

We carefully considered various features to find the best first credit cards for young adults.

We focused on unsecured credit cards, which don't require a security deposit to qualify.

We looked at fees, rewards, and incentives designed to help build credit.

We also considered the requirements for each card, including those for people who are having a hard time getting an unsecured card.

A secured card was chosen specifically because of its deposit requirements, which can be a good option for those who need it.

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You're probably eager to get the most out of your first credit card, and that's a great idea. To start, focus on building healthy credit behaviors and establishing your credit history. The sooner you start working on this, the sooner you'll be able to qualify for more-lucrative offerings with other credit card issuers or qualify for lower interest rates on other financial products like loans.

A credit utilization rate below 30% is generally a good thing for your credit scores, and the lower, the better. Paying your bill on time every month is critical, so consider setting up automatic payments to avoid accidentally forgetting.

If you do miss a payment, pay as quickly as possible, because late payments are usually reported to the major credit bureaus once they're 30 days late. Unfortunately, there's not much you can do about the high interest rates on some of these cards, other than taking advantage of the grace period each month to avoid interest charges.

To maximize your rewards, look at your spending habits to find a rewards program that maximizes your earnings. Some rewards credit cards offer a higher reward rate for spending in specific categories, like gas, groceries, or restaurants.

Here are some key things to consider when choosing a rewards program:

Remember, knowing your Approval Odds may help you narrow down your choices, but it's not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the card shown, or whether you meet certain criteria determined by the lender.

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If you're a student, the Discover it Student Cash Back card is a great option. It's designed for young adults with little to no credit history, and it offers a generous 5% cash-back on rotating categories.

This card has no annual fee, which is a huge plus. You'll also get 1% cash-back on all other purchases.

Discover will match all the cash back you've earned at the end of your first year, up to $100. For example, if you've accumulated $100 in cash back, they'll give you another $100.

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