Best Credit Cards for Young Adults In 2020

Having a credit card can help you improve your financial future if you keep your payments on time.

As you work to build your career, don’t forget to build your credit using a credit card. Responsible use of credit cards show banks that you can be trusted to repay what you borrow. This positive credit history will help you as you apply for loans to buy cars, homes, and other major purchases. These are the best credit cards for young adults in 2020.

Best Credit Card for Welcome Bonus

American Express Gold Card

As a new cardholder, you can earn a welcome bonus of 60,000 American Express Membership Rewards points. These points are worth at least $600 and there are many redemption options.  One of the best options is to transfer them to one of its 22 airline or hotel partners. To earn the welcome bonus, spend $4,000 within the first three months that your account is open.

Beyond the welcome bonus, you’ll receive $120 in dining credits every year from the American Express Gold Card. These credits can be redeemed at Grubhub, Seamless, The Cheesecake Factory, Ruth’s Chris Steak House, Boxed, or certain Shake Shack locations. You’ll receive $10 in credits each month. Before it can be used, however, you must activate this benefit.

You’ll earn 4x points per dollar at U.S. supermarkets on the first $25,000 you spend each year. Additionally, you’ll receive unlimited 4x points on dining, takeout, and delivery. Plus, flights booked directly with the airlines or through Amex Travel earn unlimited 3x points per dollar.

Although there is a $250 annual fee, this card is packed with benefits. In addition to the perks described above, you’ll also receive checked bag protection, rental car coverage, and many other benefits.

Best Credit Card for Building Credit

Discover it Secured Credit Card

The Discover it Secured credit card is one of the best credit cards for young adults looking to build their credit. It is a real credit card that helps you build your credit with all three major credit bureaus.

This secured credit card offers a refundable security deposit that will be returned if your account is upgraded. Discover periodically reviews your credit report to monitor your progress. If you meet the bank’s criteria, your account will automatically be upgraded and your security deposit will be returned. The first review happens after your account has been open for eight months.

To track the progress on building your credit, you’ll receive a free FICO score from Discover. You can access your credit score on monthly statements, the Discover mobile app, and through the bank’s website. Discover provides free alerts when a new account shows up on your credit report or if your Social Security number is found on the dark web.

While you’re using your card and building your credit, you’ll earn up to 2% cash back on your purchases. You’ll receive 2% cash back on the first $1,000 you spend each quarter at gas stations and restaurants. Plus, all of your other purchases will earn an unlimited 1% cash back. You can redeem your cash back rewards at any time and for any amount. And the cash back never expires.

Although this credit card does not offer a traditional welcome bonus, all of your rewards are doubled after the first year. This means that you can earn up to 4% cash back during the first 12 months.

Discover waives the fee the first time you have a late payment. And paying late won’t raise your APR. There are no overlimit fees, foreign transaction fees, or annual fees.

Best Credit Card with No Annual Fee

Chase Freedom Unlimited

Young adults searching for a rewards credit card with no annual fee will be happy with the Chase Freedom Unlimited. This credit card earns an unlimited 1.5% cash back on every purchase that you make. Plus, there are several bonus categories available to earn even more rewards.

You’ll earn 5% on travel booked through Chase Ultimate Rewards and 3% on dining and drugstore purchases. During the first year, you’ll also receive 5% cash back on the first $12,000 you spend at the grocery store. However, Target and Walmart purchases are excluded. Instead, they’ll earn the base 1.5% cash back.

New cardholders also earn a $200 welcome bonus. This bonus is earned after spending $500 within the first three months after opening your account.

Your rewards are worth 1 cent per point. They can be redeemed for cash back, exchanged for gift cards, or used to book travel. If you have another credit card that earns Chase Ultimate Rewards points, your rewards can be combined with them. With a Chase Sapphire Preferred or Chase Sapphire Reserve, your points are worth more when booking travel. Plus, those cards allow you to transfer your points to 13 airline or hotel partners for potentially even more value.

This is one of the best credit cards for young people because it also includes a 0% APR promo on purchases. You’ll enjoy a 0% APR on purchases for the first 15 months after opening your account. When the promotional period expires, your interest rate will go back to the standard APR based on your creditworthiness.

You’ll also receive additional perks on your purchases and travel arrangements. Purchases receive purchase protection against damage or theft and an extended warranty of up to one year. You’re protected while you travel with trip cancellation insurance, an auto rental damage waiver, and emergency assistance services.

For a limited time, you also receive DoorDash and Lyft benefits. When you activate by December 31, 2021, you’ll get three months of complimentary DashPass. This gives cardholders a $0 delivery fee on orders of $12 or more. Then, you’ll receive 50% off the DashPass for the next nine months. Through March 2022, you’ll receive 5% cash back on every Lyft ride that you take when paying with your Chase Freedom Unlimited.

Best Credit Card for Dining and Entertainment

Capital One SavorOne Rewards Credit Card

When you’re a young professional, you are often dining out and having fun with friends. The Capital One SavorOne Rewards Credit Card gives you bonus cash back on dining, entertainment, and groceries. It is the perfect card for someone on the go.

You’ll earn unlimited rewards on all of your purchases. Dining and entertainment purchases earn 3% cash back, while grocery store transactions earn 2% cash back. For a limited time, you’ll also earn 5% cash back on Uber Eats orders. This promotion runs through January 31, 2020. All other purchases get 1% cash back.

Your cash back rewards can be redeemed at any time for any amount. The cash back can be used to reduce your balance or be deposited into your bank account. As long as your account is active and in good standing, your cash back rewards will not expire.

This cash back credit card also offers a 0% APR promo rate on purchases. For the first 15 months after opening your account, you won’t be charged interest on balances that you carry over each month. Unlike a balance transfer, there are no fees to take advantage of this benefit. Once the promotional period expires, your interest rate will return to the standard rate.

There are no foreign transaction fees, so you can bring this card with you anywhere you travel. Your eligible purchases get additional warranty protection at no charge. And you can use Virtual Card Numbers from Eno to protect your credit card number when shopping online or over the phone.

The Capital One SavorOne Rewards Credit Card has no annual fee. Capital One offers a paid version with a larger welcome bonus and higher earning power. The Capital One Savor Rewards Card has a $95 annual fee while earning 4% on dining and restaurants. All other rewards categories are the same.

Best Credit Card for Online Shopping

U.S. Bank Cash+ Visa Signature Card

When you’re on the go, online shopping is a way of life. The U.S. Bank Cash+ Visa Signature Card earns up to 5% cash back on online and in-person shopping.

Each quarter, choose two categories to earn 5% cash back on the first $2,000 during those three months. You’ll also pick a 2% cash back category that earns unlimited rewards during that quarter. All other purchases earn an unlimited 1% cash back.

Cardholders get to choose and activate which categories earn the bonuses, so you can plan ahead based on where you’ll be spending the most. The only downside is that you must remember to choose your three categories, otherwise, all of your purchases will only earn 1% cash back.

There are 12 category options for 5% cash back. You’ll pick two each quarter from popular choices like internet & streaming services, fast food, department stores, and utilities. The 2% cash back categories to choose from are grocery stores, gas stations, and restaurants.

You can redeem your cash back at any time. There are no minimums when redeeming cash back for a statement credit or a deposit into a U.S. Bank deposit account. If you want a rewards card, the minimum redemption is $20.

New cardholders can earn $200 in bonus rewards after spending $500 during the first 90 days after account opening. If you need to transfer a balance, use the 0% APR promotion to eliminate interest charges for the first 12 billing cycles. Plus, there is no annual fee for the U.S. Bank Cash+ Visa Signature Card.

Best Credit Card for Airline Miles

Chase Southwest Rapid Rewards Plus Card

Southwest Airlines is one of the most popular airlines for redeeming rewards. If there is a seat available, you can book it with points and get your first two checked bags for free. Plus, there are no additional fees for booking last minute, changing your itinerary, or cancelling a flight.

The Chase Southwest Rapid Rewards Plus Card earns unlimited points on all of your purchases. You’ll earn two points per dollar when paying for a Southwest flight and one point per dollar everywhere else. Plus, you’ll receive 3,000 points every year that you renew your card.

As a new cardholder, you’ll receive a welcome bonus of 40,000 points after spending $1,000 during the first three months. These points are worth approximately $600 in flights on Southwest Airlines. If you’re interested in earning the Southwest Companion Pass, the welcome bonus and all of your credit card spending count towards the 125,000 points needed for qualification.

This airline credit card does have an annual fee of $69. If your budget allows, you may want to consider the Chase Southwest Premier Credit Card. For its $99 annual fee, it offers a larger renewal bonus of 6,000 points and additional benefits that aren’t available from the Plus Card.

Best Credit Card for Hotel Points

Chase Marriott Bonvoy Boundless

Marriott has almost 7,000 properties spread throughout the world. It offers hotel options from economical to luxurious and you can use your points to stay at any of them.

With the Chase Marriott Bonvoy Boundless you’ll receive automatic Silver Elite status and one free night (up to 35,000 points) every year. This hotel rewards credit card earns 6x points per dollar at Marriott hotels and 2x points per dollar on all other purchases. Plus, your points won’t expire as long as you make purchases every 24 months on your credit card.

When you apply for the Chase Marriott Bonvoy Boundless credit card, you can earn five free nights after spending $5,000 in the first three months. These five free nights are valid for one year and can be redeemed for rooms worth up to 50,000 points.

While $5,000 is a larger minimum spend requirement, that works out to under $1,700 per month. Or you can time your application to align with a larger purchase if you don’t plan on spending that much each month. Big bills like auto insurance, life insurance, home improvements, and tuition are great ways to meet minimum spending requirements.

As a cardholder, you’ll automatically receive Marriott Bonvoy Silver Elite status, which normally requires you to stay 10 nights each year to achieve. This elite status includes priority late checkout, free WiFi, and exclusive member rates.

If you want to earn even higher elite status, this card provides two paths to better benefits. You’ll receive 15 Elite Night Credits per calendar year. By comparison, it takes 25 nights to achieve Marriott Bonvoy Gold Elite status or 50 nights for Platinum. For young adults who plan to spend more on their cards, you can earn Gold status automatically by spending $35,000 every 12 months.

Because this is a travel credit card, there’s a good chance that you’ll be traveling internationally. It does not charge a foreign transaction fee on your purchases in other countries. This can save you up to 3% on every purchase that you make.

This card does have a $95 annual fee, but the welcome bonus, annual free night, and automatic elite status make it a compelling offer for young adults who like to travel.

Best Credit Card for Flexible Points

Chase Sapphire Preferred

One of the best credit cards for young adults who love to travel is the Chase Sapphire Preferred. It is incredibly popular with travellers because of the flexibility of the points that it earns. Your points can be redeemed for cash back, used to book travel, or transfer to hotel and airline partners. When you book travel through the Chase Ultimate Rewards portal, your points are worth 25% towards flights, hotels, and more.

As a new cardholder, you’ll receive a welcome bonus of 80,000 points when you spend $4,000 within the first three months. These points are worth $800 in cash or up to $1,000 in travel. When you transfer them to one of 13 hotel and airline partners, they could be worth even more.

You earn 2x points on travel and dining anywhere in the world and one point per dollar on everything else. You don’t have to worry about hidden charges while traveling, because there are no foreign transaction fees. Some banks charge a fee of up to 3% when you make purchases in another country.

This card also includes travel and purchase benefits that give you peace of mind. Travel benefits include trip cancellation insurance, primary rental car coverage, baggage delay insurance, and trip delay reimbursement. Your purchases are covered for 120 days against damage or theft and receive an extra year on eligible manufacturer’s warranties of three years or less.

For a limited time, you’ll also receive benefits with DoorDash and Lyft. Activate your DashPass membership by December 31, 2021, to receive a year’s worth of DoorDash benefits. During this year, you won’t be charged a delivery fee any time that you order $12 or more. Using your Chase Sapphire Preferred to pay for Lyft rides earns a total of 5x points per dollar.

Although the Chase Sapphire Preferred charges an annual fee of $95, you can see why its benefits make this flexible points credit card is so popular.

Best Credit Card for Cash Back

Citi Double Cash Card

The Citi Double Cash Card is one of the best credit cards for young professionals. You’re focused on growing your career, starting a family, and having fun. This cash back credit card offers a simple reward structure and unlimited 2% cash back on your purchases.

You’ll earn cash back twice when using the Citi Double Cash Card. The first 1% is earned with every purchase that you make. As you pay off your purchases, you’ll earn an additional 1%, for a total of 2% on every transaction. You don’t have to remember any bonus categories. You don’t have to activate any offers. And there are no caps on how much cash back you can earn.

You can redeem your cash back in any amount at any time. The cash back rewards can be credited to your statement, direct deposited into your bank account, or mailed to your address. Additionally, you can choose to convert your cash back rewards into Citi ThankYou Points. These points can be used to book travel, redeemed for gift cards, or transferred to one its many airline partners.

This cash back credit card also comes with a 0% APR balance transfer offer. These offers are a great way to eliminate high-interest rate debt. The balance transfer offer is good for 18 months of 0% APR after paying a 3% balance transfer fee (minimum $5). Simply complete your balance transfer within four months of opening your account to take advantage of this offer. Once the promotional period expires, your interest rate will return to the standard APR based on your creditworthiness.

There is no annual fee with the Citi Double Cash Card, so all of the cash back that you earn is yours to keep.

How to choose the best credit card if you are a young professional

The best way to choose the best credit cards for young professionals is to consider what your goals are. For young adults, there are countless choices in the credit card world, so think about the types of rewards you want to earn, the benefits that you’ll use, and whether or not you’re willing to pay an annual fee. Credit cards offer a variety of benefits and ways to earn airline miles, hotel points, and cash back. Some of these credit cards for young people have an annual fee, while others do not.

The three questions you need to ask yourself are:

  • Am I willing to pay an annual fee? It is ok to pay an annual fee if the rewards you earn and the benefits you receive exceed the fee that you are charged.
  • Which categories do I spend the most? Take a look at your spending and figure out where you spend the most money every month. Is it groceries, dining, travel, or something else? Pick a credit card that gives a bonus in that category. If your spending is fairly even, choose a credit card that earns higher rewards on all purchases without a specific category.
  • Do you want airline miles, hotel points, or cash back? Think about what’s most important to you. Do you want to fly someplace or stay in a nice hotel? Or would you rather have cash back that you can put towards student loans, save for the future, or spend however you want?

What you need as a young adult to get a credit card

To get approved for the best credit cards for young adults, you need a good credit score and reliable income. If you don’t have a credit history, or if you’ve made credit mistakes in the past, you may have to start with a secured credit card before applying for the best credit cards for young people.

The CARD Act requires that people under the age of 21 years old must either have sufficient income or a co-signer on their application. If you’re over 21 years old, a regular paycheck from your job is required. This way the bank knows you have the ability to repay what you charge on your credit card.

Your credit score is made up of five components:

  • Payment history – 35%. Have you paid your bills on time?
  • Amounts owed – 30%. Are your balances low compared to your credit limits?
  • Length of credit history – 15%. What is the average age of your accounts?
  • New credit – 10%. The number of recent credit inquiries.
  • Credit mix – 10%. The mix of term loans and revolving credit accounts.

As a young adult, the length of your credit history is typically short. Because of that, it is very important to pay your bills on time, keep your balances low, and limit credit inquiries if you want a high credit score.

Tips on picking the right credit cards for young adults

Picking a credit card as a young adult is not a one-size-fits-all scenario. What is good for your friend or family member, may be the wrong credit card for you. Here are a few simple tips to pick the right credit card for your situation.

  • Determine your budget. Are you willing to pay an annual fee? If so, how much are you willing to pay? The most popular credit cards have annual fees ranging from $0 to $550 per year.
  • Choose what type of rewards you want. There are several choices when it comes to credit card rewards. You can earn airline miles, hotel points, flexible points, or cash back. Of course, there are credit cards that don’t any rewards on your spending, but we tend to avoid using those if we can.
  • Earn a welcome bonus. Credit cards usually provide a bonus to new customers when they open an account. These welcome bonuses can be worth up to $500 or more, so they are a big opportunity to earn valuable rewards. To earn the welcome bonus, you’ll need to meet the spending requirements for that credit card. Some bonuses are earned after the first purchase, while others require spending larger amounts over a few months.
  • Get bonus rewards on your spending. Think about where you spend the most money and look for credit cards that offer a bonus on that category of purchases. For example, if you eat out frequently, finding a credit card that earns additional rewards at restaurants, food delivery services, and other foodie options is a good choice.
  • Look for additional benefits. The value of having a credit card as a young adult is more than just the rewards you earn on spending. Many cards include additional benefits that justify the annual fee. These may include free checked bags, a free hotel night, airport lounge access, cell phone protection, and extended warranty protection. Choose a card that offers benefits that you’ll use.

What Next?

Compare different credit cards for young adults or with different rewards and find the best credit card for you.

The Takeaway

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Responsible use of credit cards show banks that you can be trusted to repay what you borrow. This positive credit history will help you as you apply for loans to buy cars, homes, and other major purchases in the future.

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