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Updated November 20, 2017

Study: Credit Cards for Young Professionals

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The best credit cards for young adults have good rewards and benefits but low fees. Use this must-read guide to help narrow down your search.

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Here are the best credit cards for young adults in 2018:

Earn $150 Bonus

Earn 50,000 Bonus Points

No Balance Transfer Fee

What You Need to Know As a Young Professional

Your first adult credit card is exciting and scary at the same time. After all, it's easy to fall into credit card debt if you're not careful.

But no matter what your financial situation is, having the right credit card in your pocket is a wise move. It can help you manage your cash flow when it's not steady. But even better, it can actually help you save money and reach your goals.

A credit card is also essential to building your credit history. As you move further into adulthood, you'll need that credit score for almost every major thing you do, from buying a car to renting an apartment. Employers may even do a credit inquiry as part of a background check.

For twentysomethings picking out their very first credit card, it can be confusing and jargon-y. So we've put together a guide to credit cards for young adults to help navigate these new waters.

Tip: Do you have a credit history? If you've never had a credit card, a car loan, or a student loan - you will need to build credit first. You'll probably need to start with a secured credit card. Or if you are still in college, a student credit card.

How to Choose the Right Card For You

The "perfect credit card" simply doesn't exist. A card that's great for your friend may have little use to you. You'll come across some benefit you love on one card (like a super-low interest rate) but also notice some glaring negatives (like a fee for purchases abroad). You'll need to zero in your priorities to get the right card for you.

Here are some things you should keep in mind:

  • Rewards: Look for a credit card with rewards that fit your lifestyle. What's the point of earning rewards on grocery shopping if you rarely step foot in a supermarket?

    Identify one main goal: traveling, getting cash back, paying off debt, or maybe something else entirely. Look for a credit card to help you reach that goal.

    Tip: Bonuses are also great incentives to apply for a credit card. As long as you can meet the minimum spend, you'll get a nice little lump of cash or travel points, which helps you get a jumpstart on your goals. But don't apply for cards just for the bonus. Make sure the card has rewards or features you need.

  • Interest rate: The interest rate on your credit card is called APR (annual percentage rate). Reward cards tend to have higher APRs for all the benefits they offer. If you can't always pay your credit card bill in full, look for a credit card with low interest rates instead.

    If you have some large purchases on the horizon (like furnishing your new apartment), you can look for a card with a long 0% intro APR. This will give you time to pay off your purchases interest-free before the regular APR kicks in.

  • Benefits: Paying by credit card also gives you certain benefits. Some credit cards include perks such as extended warranty, price protection, and travel insurance. Get to know your card's benefits and take advantage of them.

  • Fees: Beginners should start with a credit card without an annual fee. However, sometimes an annual fee makes sense if you're a big spender and find a card whose rewards match your spending.

    For example, if you spend more than $61 a week on groceries, you may want to consider the Blue Cash Preferred from American Express, a CreditDonkey partner. Blue Cash Preferred earns 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%). But it has a $95 annual fee.

    Tip: If you routinely spend thousands per month on your credit card, a card like the Chase Sapphire Preferred might be worth considering. It has an $0 intro annual fee for the first year, then $95. But this card lets you earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®, Chase's online travel portal.

Whichever card you choose, make sure you use it responsibly. You can easily rack up a mountain of debt if you only pay the minimum each month. And missing a payment could not only get you a huge late fee, but also result in a penalty APR as high as 30%.

What is Visa and Mastercard? These are not card issuers, but rather card payment networks. Both are widely accepted worldwide by almost all merchants. There may be some exceptions, like for example, Costco is partnered exclusively with Visa now. But to most users, there will be little difference.

The other two popular payment networks are American Express and Discover. These are not as widely accepted, so some merchants may not take them (especially in foreign countries).

Cash Back Rewards

For most young adults, a credit card that gives you cash back is very attractive. Whether you're shopping or eating out, you could be getting something for every dollar you spend.

Look for a cash back card with a rewards structure that fits your spending patterns. Just keep your spending within your budget and pay off your balance every month. Note that the recommended credit needed for these types of cards is excellent credit.

  • 5% Rotating Categories: Discover It will match all the cash back you've earned at the end of your first year. This offer is only for new customers. This card earns 5% cash back in bonus categories that change each quarter (up to the quarterly maximum; requires free activation each quarter). All other purchases earn 1% cash back.

Low Interest Rates

Low Interest: We get it, sometimes life happens. As a young adult in today's uncertain job market, you may not have consistently steady cash flow each month.

  • Chase Freedom Unlimited
    Apply for Chase Freedom Unlimited
    Chase Freedom Unlimited lets you earn a $150 bonus after you spend $500 on purchases in your first 3 months from account opening. You earn unlimited 1.5% cash back on every purchase. There is also a 0% intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.49-25.24%. The balance transfer fee is 5% of the amount transferred, $5 minimum. The cash back rewards will not expire as long as your card account remains open. There is no annual fee.

Credit Card for Traveling

It's great to travel when you're young. You have the energy and enthusiasm to see exotic countries before you get tied up with responsibilities. As a hard-working young professional, it's also nice to get away and go on vacation. Compare the latest travel credit card deals here.

A travel card can help you reach your travel goals with less money out of your own pocket. Another good thing about them is that most don't have foreign transaction fees and come with travel insurance benefits (like lost luggage insurance). Note that the recommend credit for these cards is usually Excellent credit.

  • Travel Rewards: Chase Sapphire Preferred
    Apply for Chase Sapphire Preferred Card
    Chase Sapphire Preferred lets you earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. You can earn 5,000 bonus points if you add your first authorized user and make a purchase within the first three months from account opening. This card lets you earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide. The points can be transferred 1:1 to leading frequent travel programs including airline transfer partners. The card has a $0 foreign transaction fee. The card also comes with premium travel and purchase protection benefits (including trip cancellation/trip interruption insurance and auto rental collision damage waiver). There is a $0 intro annual fee for the first year, then $95.

    Tip: Another comparable card is Citi ThankYou Premier. Citi ThankYou Premier earns 50,000 bonus points after you spend $4,000 within the first 3 months of account opening. This card earns 3x points on travel (including gas), 2x points on dining out and entertainment and 1x points on other purchases. There is a $95 annual fee (waived for the first 12 months).

  • No annual fee: Capital One VentureOne offers a one-time bonus of 20,000 miles if you spend $1,000 on purchases within three months of account opening. 20,000 miles is equal to $200 in travel. This card earns 1.25 miles per dollar on all purchases. You can redeem miles toward travel purchases on any airline, hotel, or car rental. There is a 0% intro APR on purchases for 12 months. After that, a variable APR, currently 13.49% to 23.49%. There are no foreign transaction fees. There is no annual fee.

If you prefer a specific airline or hotel chain, take a look at travel credit cards to see how long it would take you to score a free flight or hotel stay. Also, look into earning airline miles and points - if you are a frequent traveler, you really stand to benefit if you pay attention to both your earning and redeeming options.

Credit Cards for Paying off Debt

Maybe you racked up some credit card debt in college or as a new graduate. No worries, you're still young and have time to set it right. A balance transfer card will help you pay off the debt faster. By transferring your debt to a card with an introductory 0% APR period, you'll have time to work on paying down your debt without accumulating more interest.

  • Chase Slate offers a $0 intro balance transfer fee for the first 60 days your account is open. After that, the fee for future transactions is 5% of the amount transferred with a minimum of $5. This card has a 0% introductory APR for 15 months on purchases and balance transfers. After that, a variable APR, currently 16.49% to 25.24%. Plus, you can see your monthly FICO Score for free. There is a $0 annual fee.

    For example, if you have $3,000 in debt, you can save approx. $300 in interest by transferring the debt to Chase Slate (if you're able to pay it off within the 15-month intro APR period). To see for yourself how much you can save with a balance transfer, play around with our balance transfer calculator.

Do you have student loan debt? Read the best ways to pay off student loans fast.

Also, see if you qualify for student loan forgiveness. There are several income-based repayment plans and jobs that offer loan forgiveness.

Credit Cards Based on Your Credit

Your credit score is one of the biggest factors that will determine the card you're able to get. Cards all have their own credit requirements. Here, young people are at an obvious disadvantage as they have had less time to build their credit.

However, whether you have good credit, bad credit or none at all, you can still find the credit card that's right for you. We recommend checking out at least three cards before applying.

Tip: It's good to keep track of your credit score. The most commonly used credit score is the FICO score. You can get your FICO score for free with the Discover Free Credit Scorecard. You don't need to be a customer of Discover. Anyone can sign up and get their score for free.

with Good Credit

If you've already established good credit early on, you're in a great position now for some awesome reward cards. Decide what kind of rewards fit your lifestyle and goals the most (the most popular are cash back or travel miles). Jump over to this article to see our list of credit cards for those with good credit.

  • Blue Cash Everyday
    Apply for Blue Cash Everyday Card from American Express
    Blue Cash Everyday offers a $150 statement credit after you spend $1,000 on purchases within the first three months of opening your new credit card account. This card earns 3% cash back at U.S supermarkets (on up to $6,000/year in purchases, then 1%), 2% cash back at U.S gas stations and at select U.S. department stores, and 1% on other purchases. The cash back is received in the form of Reward Dollars that can be redeemed for statement credits, gift cards, and merchandise. There is a 0% intro APR for 15 months on purchases and balance transfers, then a variable rate, currently 14.49% to 25.49%. There is no annual fee. Terms apply.

Tip: If you have good credit and no credit card debt, the next step is to start building wealth by investing. Read our beginner's guide on investing to get started. Nothing is too small.

with Fair Credit

If you have fair credit, you can still get a good credit card with useful benefits and reasonable fees.

  • Discover it Secured Card reports to the 3 major credit bureaus to help you build or rebuild credit with responsible use. This secured credit card's variable APR is 24.49%. The minimum refundable security deposit is $200 (up to the amount Discover approves) and your credit line equals your deposit. Starting at 8 months, Discover will perform automatic monthly reviews based on your responsible credit management across all your credit cards and loans to see if you could qualify to transition to an unsecured line of credit. You will see your FICO credit score for free on your monthly statement and in your online account. There is no annual fee.

    But here's where it gets interesting. Discover it® Secured credit card offers rewards: 2% cash back at restaurants and gas stations (on up to $1,000 in combined purchases each quarter); 1% cash back on other purchases. As a promotion for new cardmembers, Discover will match all the cash back you've earned at the end of your first year.

  • Capital One QuicksilverOne earns 1.5% cash back on all purchases. After making your first 5 monthly payments on time, you can be eligible to receive a higher credit line. There is a $39 annual fee.

with Limited Credit

Limited credit means that your credit history is still very young (less than 1.5 years). There's not enough information yet to show banks if you can responsibly handle credit. Your credit card choices will be limited as well. With responsible use, you'll build positive credit history and soon be able to graduate to a better rewards card.

  • Capital One Platinum offers a no annual fee credit card to people with fair credit. You get access to a higher credit limit after you make your first 5 monthly payments on time.

with No Credit

© The LEAF Project (CC BY-SA 2.0) via Flickr

Are you new to the world of credit?

  • If you are in college, you may consider a student credit card.

    • Discover Student It Card will match all the cash back you've earned at the end of your first year. This offer is only for new customers. This card earns 5% cash back in bonus categories that change each quarter (up to the quarterly maximum; requires free activation each quarter). All other purchases earn 1% cash back.

      Plus, you can earn $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.*

    • Capital One Journey offers 1% cash back on all purchases. If you pay on time, you can boost your cash back to a total of 1.25% for that month. After you make your first 5 monthly payments on time, you may get access to a higher credit line. There is no annual fee.

  • If you are out of college, you'll probably need to consider a secured credit card. A secured credit card does not require a credit history for approval. Instead, it is secured by a deposit.

Related: Credit Cards for Beginners

with Bad Credit

If you have bad credit, there is still hope.

We all make mistakes, especially when we're young. If you've made a few and have been branded with a bad credit score, you have a whole lifetime to rebuild. The most effective way to do that is to prove that you can be depended on by using a credit card wisely.

You can consider using a secured credit card to help rebuild your credit history.

  • Citi® Secured Mastercard® reports to the 3 major credit bureaus to help you build credit history. This secured credit card's variable APR is 23.99%. A minimum $200 security deposit is required. There is no annual fee.

Tip: If you have no credit or bad credit, it's possible to get a co-signer for a credit card. This is a person who will be legally responsible for your debt if you don't make payments. Unfortunately, not all banks allow you to get a credit card with a co-signer.

What About Prepaid Debit Cards?

Prepaid debit cards could also be an option if you have bad or no credit. You don't need a credit check to get one. All you need is the money you want to load onto it. For example, if you want $500 to spend, you need to put $500 onto the card. Then you can use it for purchases until the $500 is all gone and you need to reload.

Prepaid cards are more like debit cards. But you don't need a bank account to get one. This may be good for you if you don't want to deal with a bank. However, prepaid cards don't report to the credit bureaus to help you build credit (unlike secured cards).

But watch out: prepaid cards have a lot of fees. There's usually a monthly service fee, as well as reload fees and ATM fees.

Bottom Line

Credit cards are a convenient way to keep track of your spending and manage your finances. They're also an important tool for building credit that will help you later in life. Find the one that best fits your needs and you'll get other rewards too, whether it's cash back or travel miles. And if you're still in the process of building credit, use one responsibly to show that you're a reliable credit user, and one day you'll be eligible to receive such perks too.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Disclaimer: The information for the Discover it® - Cashback Match™, Chase Slate, Discover it® for Students, Capital One® QuicksilverOne® Cash Rewards Credit Card, Capital One® VentureOne® Rewards Credit Card, Journey® Student Rewards from Capital One®, Citi ThankYou® Premier Card, Capital One® Platinum Credit Card, Citi® Secured Mastercard®, and Discover it® Secured Credit Card has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

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About CreditDonkey®
CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy financial decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.