- Best credit cards for young adults: Top tips for 2024
- Best credit cards for young adults compared
- Methodology
- Sources
- About the author
- User questions & answers
Best Credit Cards Tips for Young Adults
Using a credit card responsibly and getting the most out of it can be tough for anyone, let alone young adults with limited experience. But if you prepare yourself and take certain precautions, you can minimize the risk and maximize the benefit. Below, you’ll find some of WalletHub’s top tips for doing just that.
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Get a Credit Card as Soon as Possible: Putting off your credit card application is a bad idea because it simply delays your credit-building efforts. A credit card is the most efficient credit-improvement tool available because it reports information to the major credit bureaus on a monthly basis and can be free to use. As long as your account is in good standing, the information that gets reported will be positive and your credit score will rise. Your account will stay in good standing if you pay your bill on time each month or if you don’t make any purchases and simply maintain a balance of zero. In other words, you don’t actually need to use a credit card to build credit with one.
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Set Up Automatic Monthly Payments: Payment history is the biggest component of a credit score, and setting up automatic monthly payments from a bank account is the easiest way to make sure you don’t lose credit just because you have a lot going on. That’s especially important for young adults, who often have a lot of new obligations. Just make sure you always have enough money in your bank account to cover at least your card’s minimum monthly payment.
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Use Less Than 30% of Your Credit Limit: The amount of a credit card’s spending limit that you use each month, also known as credit utilization, is an important ingredient in your credit score and one of the easiest to control. In addition to spending less and making a bigger payment, you can also reduce your credit utilization by paying a credit card’s bill multiple times per month. Credit utilization is calculated using the balance listed on your monthly statement.
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Review Your Transactions Each Month: Luxuries can quickly become necessities if you aren’t careful. Plus, avoiding debt and maximizing savings are key when you’re young because you want compounding – interest applying to interest that’s already been assessed – to work for you, rather than the other way around. You don’t want to wind up paying for fraudulent purchases, either. These are all good reasons to at least scan the purchases listed on your monthly credit card statements.
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Keep an Eye on Your Credit Score: You may be able to improve your credit score enough to qualify for an even better credit card in a matter of months. Watching your credit score rise will help you determine when the time is right to apply. And you can always check your latest credit score on WalletHub, the only site with free daily updates.
Best Credit Card for Young Adults Compared (May 2024)
Card | Best For | Annual Fee |
Chase Freedom Rise℠ | Overall | $0 |
Discover it® Secured Credit Card | Secured | $0 |
Petal® 2 Visa® Credit Card | Limited Credit | $0 |
Wells Fargo Active Cash® Card | Good Credit | $0 |
Capital One QuicksilverOne Cash Rewards Credit Card (see Rates & Fees) | Cash Back | $39 |
Chase Sapphire Preferred® Card | Young Professionals | $95 |
Methodology for Selecting the Best Young Adult Credit Cards
To identify the best credit cards for young adults and then maintain the list over time, WalletHub’s editors regularly compare 1,500+ credit card offers based on approval requirements, rewards, fees, APRs, special features and other WalletHub Rating components.
How Two-Year Cost Is Calculated
Two-year cost is used to approximate the monetary value of cards for better comparison and is calculated by combining annual and monthly membership fees over two years, adding any one-time fees or other fees (like balance transfer fees), adding any interest costs, and subtracting rewards. Negative amounts indicate savings. When fees or other terms are presented as a range, we use the midpoint for scoring purposes.
Rewards bonuses and credits have been taken into account for two-year cost calculations. However, bonuses applicable to only a very small portion of cardholders are not considered. For example, credits and bonuses awarded for spending or redeeming rewards through a company portal with non-co-branded cards have not been taken into account. Similarly, bonuses and credits related to spending with specific merchants using a non-co-branded card have not been taken into account (for example, if Card A offers credits with DoorDash, this feature would not be factored into calculations because it is hard to assess how many cardholders would use the benefit or exactly how much value they'd get from it).
Cardholder Spending Profiles
Given that different users have different goals and are likely to use their credit cards differently, we identified spending profiles that are representative of different users’ financial priorities and behaviors. For each cardholder type, we have assumed a specific amount of monthly spending by purchase type (e.g., groceries, gas, etc.), as well as an average balance, balance transfer amount, amount spent on large purchases and average monthly payment. Spending assumptions are based on Bureau of Labor Statistics data.
Sources
WalletHub actively maintains a database of 1,500+ credit card offers, from which we select the best credit cards for young adults for different applicants as well as derive market-wide takeaways and trends. The underlying data is compiled from credit card company websites or provided directly by the credit card issuers. We also leverage data from the Bureau of Labor Statistics to develop cardholder profiles, used to estimate cards’ potential savings.