Are you looking for a credit card but don’t have an established credit history? Fear not! There are several cards that will give you a chance to start building credit. Take a look at our guide to find the eight best credit cards for young adults with no credit.
8 Best Credit Cards for Young Adults With No Credit
An established credit history is extremely important for many reasons. It allows you to get lower rates on loans, apply for apartments, and secure credit cards with more rewards and higher spending limits.
Everyone has to start somewhere, though. There’s a point in everyone’s life when they don’t have a credit history to rely on. Thankfully, there are several options that allow you to begin your credit history by using a credit card. Ahead, we’ll take a look at the eight best credit cards for young adults with no credit.
1. Discover it Student Cash Back
A lot of young people start building credit as college students, and the Discover it Student Cash Back card is a great place to start. You will need to prove that you’re a student before applying, but don’t need to have an established credit report like most other cards.
The card has some good incentives for students, including a $20 cash bonus when you sustain a GPA of over 3.0. You can get this reward every year you have the card. As a bonus, Discover will also match the cash back you earn within the first 12 months.
While Discover’s rewards system isn’t always ideal, it’s better than a lot of other cards for people with no credit. There is a rolling rewards system that gives you 5% cash back on different categories of purchases each quarter.
These include things like restaurants, Amazon purchases, gas, and grocery store purchase. You need to opt into the program each quarter before you can start earning cash back, but you’ll get an email notification whenever it’s set to change. There is no annual fee with this card and a 0% APR on purchases and balance transfers for the first year.
2. Capital One Platinum Credit Card
The Capital One Platinum Credit Card might seem like a card for high-rollers, but it will accept those with no credit or limited credit history. Not everyone can start gaining credit as a student, and this card is a good option for those who need to start building their history after they graduate.
There aren’t any standout benefits or rewards with this card, but it doesn’t charge an annual fee and allows you to get a foot in the door. You will also be able to apply for a higher credit limit after you prove your reliability by paying your first five months of bills on time.
3. Capital One Quicksilver One
Capital One is a fantastic credit card provider, and this card grants you access to the cash back feature. You will have to pay $39 as an annual fee but will gain access to the 1.5% cash back on all purchases. The rewards you gain never expire so you can use them at any time.
Like the Platinum card we included above, you can raise your credit limit after five months of successive payments. The terms are very similar to the card above, so you’ll have to consider whether or not the annual fee is worth it. Take a look at our section below for more information on finding the best credit card for your plans.
4. Discover it Secured
This is the first secured credit card on our list of the best credit cards for young adults with no credit, but it comes with a couple of extra benefits. Secured cards require you to put money down to secure your spending limit, which isn’t possible for everyone. Discover requires at least $200 as a security deposit.
Still, the Discover it Secured card gives you the same cash back features as the Student Chrome card we included below. You can get 2% cash back on restaurant and gas purchases up to the cap of $1,000 per quarter.
Your security deposit will be your credit limit, and you can apply for a transition to an unsecured card after eight months with the company. Discover will refund your security deposit, and keep your credit limit the same, so it’s often a good idea to raise the security deposit when you apply.
Apart from that, you will have the same benefits as all discover cards. They will match your cash back after the first year, and you won’t have to pay an annual fee.
5. Discover it Student Chrome
Another great first credit card for students is the Discover it Student Chrome card. This card has many of the same benefits and stipulations as the one we included above, including the $20 bonus for a 3.0 GPA or higher.
The only difference with this card is the rewards system. The Discover it Student Chrome card gives you 2% cash back on restaurants and gas up to $1,000 per quarter. This is useful because you don’t need to keep track of rotating benefits. Food and gas are two of a student’s biggest expenses, anyway. All other purchases grant you 1% cash back.
6. Capital One Secured Mastercard
As we’ve said before Capital One is one of our favorite credit card providers for any credit level. The Capital One Secured Mastercard is another secured option that comes with no annual fee. Like most secured cards, your security deposit will be your credit limit and Capital One will report your spending to the three credit bureaus.
That way, you’ll be building credit without putting yourself at much risk. Unlike a lot of other cards that require a high security deposit, though, Capital One allows you to put down as low as $49. You can raise your credit limit after five months and don’t need to make a higher security deposit to access it.
There aren’t any rewards with this card, but it still works well for those who plan on only using it for emergencies.
7. Citi Secured Mastercard
The Citi Secured Mastercard is a relatively standard secured credit card, but still a solid option for most people without a credit history. You won’t face any annual fees and will need to put down a security deposit of at least $200.
Apart from that, there aren’t any standout features with this card. It’s a boilerplate secured card that will help you start building a credit history you can use to apply for better credit cards.
8. Bank of America Travel Rewards for Students
The Bank of America Travel Rewards for Students is the only card on this list that rewards points rather than cash-back. You will earn 1.5 points for every dollar you spend and can earn 25,000 bonus points if you spend $1,000 within the first 90 days.
You will be able to redeem these points on things like flights and hotels when you travel for summer or spring break. This card isn’t for everyone, though. Not everyone will be able to meet the $1,000 spending requirement to get the bonus. Some students won’t have the luxury of traveling for their school breaks, either.
Still, if you think you’re someone who would benefit from this system, the Bank of America Travel Rewards for Students is a great option. Points usually give you more value than cash back cards do, since 1% cash back equals $.01 per dollar spent.
Choosing the Best Credit Card for You
Now that we’ve covered some of the best credit cards for young adults with no credit, it’s time to answer some questions you might have about these cards. The process can seem a bit confusing if you don’t have experience with credit cards, which is why we’ve included a few frequently asked questions below. Take a look at this information for more help with finding the best credit card for you and your lifestyle.
Secured Vs. Unsecured Credit Cards
Those who are new to credit cards - and credit in general - are likely wondering about the difference between secured and unsecured credit cards. We included a few secured credit cards on this list because they’re easier to get. The provider knows you’re good for the money because you already secured your down-payment.
Secured credit cards are often a good option for your first card. You will pay a deposit, and this deposit will be your credit limit (as a general rule - this isn’t always the case). Secured cards aren’t ideal for most people, but they’ll able to establish a track record of creditworthiness you can use to your advantage.
Unsecured cards don’t come with a deposit and are what most people with decent or good credit apply for. There are unsecured credit card options for those with low or no credit, but you need to be careful with these. They will often charge high APRs and fees, meaning you could end up paying more than your initial deposit on a secured card.
You will have to decide the best option for you depending upon your goals. Do you need a card for emergencies and infrequent use? If you do, an unsecured card might make sense. Is your primary goal building a credit history? If so, you might want to look at the secured credit card options.
Annual Fee vs. No Annual Fee
Most of the credit cards that we listed above don’t have an annual fee attached to them. Those that do have low annual fees, since the rewards program isn’t as good as it could be.
If you’re a young adult looking to scrape-by and begin your credit history, though, every dollar likely matters to you. A $40 annual fee can be a lot if you’re trying to save money in every way, but you have to weigh the pros and the cons.
Annual fees typically signify that the credit card provider is giving you something. This usually comes in the form of rewards programs, which will give you points or cash back on your purchases.
You’ll need to decide which option is more valuable to you. Do you plan on frequently spending with your credit card? If so, you will benefit from a rewards program. These programs will often save you more money than the annual fee they charge if you’re spending with them.
If you plan on only using your credit card for emergencies, though, then it makes sense to save on an annual fee by choosing a card without one. Some no-fee cards come with rewards programs as well, so you can often get the best of both worlds. Even if the card doesn’t have a rewards program, though, it will make more sense for you to pay $0 a year for a card you won’t use very much.
Carrying a Balance on Your Card
One of the best general pieces of advice we can give when you’re obtaining your first credit card is not to carry a balance on your card. All of the cards we listed come with high APR (annual percentage rate). This means that carrying a balance on your card will result in you paying much more for the items you buy.
Cards for those with no credit or low credit have high APR because you won’t have a proven track record of paying your bills. Cards that don’t check credit are particularly high here since virtually anyone will be accepted for them.
Live within your means on a credit card. You shouldn’t buy something if you can’t afford it with the money in your savings account. Sure, buying some gas or food to hold you over until your next paycheck is fine, but make sure you pay the balance of your card in full when you get the next statement.
This tip is useful for anyone, but it’s particularly important for those who are developing a credit history for the first time. Your goal should be to establish good credit and apply for a better credit card in the near future. Carrying a balance and failing to pay your bills will lower your credit score, and dig you a hole you’ll have to get out of.
Leslie is currently Chief Equality Officer at Sandboxx, Corp. Sandboxx helps companies create inclusive cultures and leverage diversity to maximize engagement, productivity and profit. Her career spans 3 decades as a personal and executive leadership coach who motivates and inspires others to identify, reframe, and ultimately transform their personal and professional lives. As a workshop facilitator and executive coach, Leslie specializes in reconnecting people with their personal power and equipping them to succeed in all areas of their life. A graduate of Carleton University and a certified life and executive coach through Royal Roads University and The Coaches Training Institute, Leslie is the founder of Strong Coaching. Her client base consists of individuals, entrepreneurs, stay-at-home moms, small businesses and multinational corporations. She has been featured in/on Breakfast Television Toronto, Daytime Toronto, The Huffington Post, City Centre Mirror, Metroland and on radio programs across the country for her unique insights into creating a life of joy and fulfillment.