Choosing the Best Credit Cards for Young Adults to Build Credit
Building credit early is essential for young adults. It lays the foundation for a solid credit history for the rest of your life. One way to do this is to get the best credit cards for young adults. They’ll help you boost your credit score straight away. Credit cards also add variety to your credit report, and lenders like to see this. Additionally, they help to teach responsible use from the start. We’re going to give you several credit cards to choose from to suit different stages of your credit building process.
Best Credit Cards for Young Adults to Build Credit Using Secured Cards
Establishing credit can be difficult for anyone. It presents unique challenges because most lenders require established credit before they work with you. However, you do have options available to you. A secured credit card can cost more upfront, but it’s a good first stepping stone. Secured credit cards come with more restrictions, but they help you get into good habits.
Who is a secured credit card good for? Many secured credit cards require you to put money down when you open it. This money down becomes your line of credit. It’s usually between $200 and $500, but it can go lower or higher as well. You also usually need a bank account to submit your deposit. However, you get your deposit back when you close the card out as long as you pay it in full. Two good secured credit cards include:
1. Capital One Platinum Secured Card
First up is the Capital One® Secured Card. There is no annual fee with this card if you have it for a few years. The security deposit fluctuates between $49, $99 or $200. It’s fully refundable when you close the card. The final amount of the security deposit depends on your credit score when you first apply for it. You can get a higher credit line when you make your first five payments on time.
Your initial credit line will be $200. You can also choose your due date. The lender gives you payment choices as well. You’re able to pay your bill by check, at a local branch, or online. Finally, it has an annual percentage rate (APR) of 26.99% for every month you carry a balance.
2. Discover Secured Card
The second secured card we have is by Discover. The Discover it® Secured Card is a slight oddity for a secured credit card. For example, it’s a rewards card that offers 2% cash back on your purchases. This applies to restaurants and gas stations. You get 1% back on every other purchase. They also match your cash back amount for the first year. This doubles your profits.
You will need a security deposit to open this card, but your security deposit is fully refundable. There is no annual fee with this card. You also get access to your credit score for free, so you can monitor it. Finally, you get a variable 25.24% APR when you carry a balance from month to month.
Best Credit Cards for Young Adults to Build Credit with Some Established Credit History
Once you have a slightly established credit history, you have more options available for credit building. However, it still requires care to continue improving your score. Once you make it from no credit to good or fair credit, you can look for new options to build credit.
This is the level where credit lenders start to offer you better cards. They’re also more willing to work with you. This is especially true if they can look at your credit history and see consistency. They’re looking for on-time payments, a variety of accounts, and a longer credit history. We have two cards that are great for this credit range. They include:
1. Citi Double Cash Card
The Citi® Double Cash Credit Card is a rewards credit card. You earn 1% back when you buy items. You can earn another 1% back when you pay for purchases over time. There is no annual fee with this card. This is odd for a rewards card, and it allows you to stack your rewards. It also comes with a balance transfer offer. You have a 0% balance transfer APR for the first 18 months.
Having this card gives you access to the Citi Private Pass program. This gives you early access to thousands of events each year. You’ll be able to purchase tickets early, get access to VIP packages, and get complimentary moving screenings. You also get a pass on your first late payment.
2. Chase Freedom Card
The Chase Freedom® Credit Card gives you 5% cash back up to $1,500 in purchases in bonus categories. You earn 1% on everything else. There is no annual fee attached to this card. Your rewards don’t expire either. This means that you can stack them for as long as you have the card in good standing.
You won’t pay an APR for the first 15 months that you have the card open. After this, your APR goes up to between 17.24% to 25.99%. You can redeem your rewards for travel, Amazon credits, and gift cards. It comes with fraud protection, purchase protection, extended warranties, and fraud alerts. Finally, you can earn a $150 bonus after you spend $500 in the first three months.
Best Credit Cards for Young Adults to Build Credit: Comparing and Choosing
No matter which stage of building your credit you’re at, a credit card can help. Our roundup of the best credit cards for young adults can start you off on the right path. You’ll be able to use them to lay a solid foundation. Additionally, they work well to help teach you to be financially responsible. They have restrictions and rules you have to work by. However, they’re solid options to anyone who wants to establish their credit.
Once it’s established, you can continue to use them to improve your credit further. If you haven’t checked into them, I recommend it. It may take a while to find the best one to suit you, but there are several choices available. Take your time, shop around, and build your credit.