Recap: 2019's Best Credit Cards for Young Adults
Now that you’re familiar with the top credit cards for young adults and young professionals, as well as the best ways to use them, you might want to take another look at your options before making a selection. For your convenience, we’ll recap the best offers
for different types of applicants below.
Best Credit Cards for Young Adults in 2019
Whichever card you choose, make sure to use it responsibly. WalletHub’s guides on paying credit card bills
and building credit
should help with that. And just so you know what not to do, check out our list of the biggest credit card mistakes and how to avoid them
5 Best Credit Card 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.
- 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.
- 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.
- 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.
- 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.
- 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.
Ask the Experts: Young Adult Credit-Card Section
The credit card market can be confusing for anyone to navigate, let alone a young adult with little experience. To help young adults make the best credit card choices, we asked a panel of experts to share their advice on a few key issues.
- Should all young adults have a credit card?
- What is the biggest mistake that young adults tend to make with credit cards?
- To what extent are young people interacting with credit cards differently nowadays than in the past?
- What type of credit card feature is most important to young adults: rewards, low interest rates or low fees?
Keith E. Niedermeier
Ph.D., Director of Undergraduate Marketing Program, Adjunct Professor, The Wharton School, University of Pennsylvania
Assistant Professor of Professional Practice, Rutgers Business School - Newark and New Brunswick, Department of Finance & Economics
Ph.D. – Assistant Professor of Accounting, University of San Diego School of Business
Ph.D., CFP, PMP - Director of Financial Planning Program, California Lutheran University
Scott K. Powell
Professor of Marketing, Grove City College
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 1,000+ credit card offers based on approval requirements, rewards, fees, APRs and special features. We use age-based spending data from the Bureau of Labor Statistics to estimate the savings each card is likely to provide the average young person. We then select the top cards in a handful of relevant-subcategories, in recognition of the fact that young adults are a very diverse group, characterized by a fairly wide age range and credit histories spanning from bad to limited to good or better.