credit card advice
While being among the youngest workers in the labor force, 18-year-olds tend to have the lowest incomes — and the least amount of financial know-how. But what few young people realize is that they have one key advantage over their more experienced coworkers: time. For example, time (and the power of compound interest) can make even modest retirement savings soar if started when you first enter the workforce.
Similarly, the sooner you start establishing good credit, the higher the score you can reach, since the length of your credit history is up to 15% of your FICO score. Of course, while you can establish a retirement account as soon as you start working, your ability to obtain a credit card may be more difficult depending on your age.
Best Credit Cards for 18-Year-Olds
Turning 18 can be an exciting time, full of new adventures. Many will leave home for the first time, vote for the first time, and buy their first Powerball ticket in the fruitless hope of becoming a millionaire. At one time, another rite of passage for newly-minted 18-year-olds was to signup for their first credit card, choosing from among the bounty of applications inevitably hitting their mailbox — until the CARD Act of 2009.
These days, the CARD Act (Credit Card Accountability, Responsibility And Disclosure Act) requires consumers under the age of 21 to have a cosigner or steady income to obtain a credit card. In one fell swoop, the CARD Act limited the options for 18-year-olds to obtain credit from the entire consumer marketplace down to a handful of issuers and cards. But while limited, card options are still out there to help you start building credit.
Students | Prepaid | Cosigners
Best Credit Cards for Students
Without a cosigner, those under the age of 21 who wish to obtain a credit card under their own name will need to have a regular income substantial enough to repay any credit card debt. At the same time, that income doesn’t necessarily need to be from a job, which can open up some doors — particularly for students.
Why? Because you can typically report extra money from scholarships, grants, and fellowships as income on a credit card application. What’s more, you can also find a range of credit cards designed specifically for students, with flexible credit requirements with room for those who have yet to start establishing a credit history. You can start exploring options with some of our favorite student cards.
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
- No annual fee. No late fee on first late payment. No APR change for paying late.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 6 months | 10.99% for 6 months | 15.24% - 24.24% Variable | $0 | Fair |
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
- No annual fee. No late fee on first late payment. No APR change for paying late.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 6 months | 10.99% for 6 months | 15.24% - 24.24% Variable | $0 | Fair |
- Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
- Enjoy no annual fee and no foreign transaction fees
- Get a head start and build your credit with responsible use
- Get access to a higher credit line after making your first 5 monthly payments on time
- Monitor your credit profile with the CreditWise® app, free for everyone
- $0 fraud liability if your card is ever lost or stolen
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | 26.96% (Variable) | $0 | Average, Fair, Limited |
+See More Student Credit Cards
One important thing of which you should be aware is that certain types of school-related monies should not be reported as income on a credit card application, the most prominent of which is student loan funds. Basically, since your student loan is really a type of debt, rather than actual income, it’s a bad idea to claim it as such.
In other words, you’ll need to pay back your loans, meaning they’re not a very reliable option for repaying other types of debt. Moreover, if you need to falsely report student loan funds as income to qualify for a credit card, you probably don’t need to take on any other potential sources of debt in the first place — particularly not ones with the high interest rates that come with revolving credit lines.
Best Prepaid Credit Cards
While the CARD Act seeks to protect young people from taking on credit card debt they cannot repay, it can be an inconvenience for those who are unable to obtain a credit card as a result, particularly in the modern world of digital payments. If you are between the ages of 18 and 20 and cannot meet the requirements to obtain a credit card under the CARD Act, your best solution may be to obtain a prepaid credit card.
When adorned with a credit card network logo — e.g., Visa, Mastercard, Discover, or Amex — prepaid cards can be used just like credit cards to conveniently make purchases anywhere the network is accepted. The main difference is that prepaid cards need to be “loaded” with funds to be used, sort of like a gift card. Unlike gift cards, prepaid cards, including our expert-rated options below, can receive direct deposits.
- With Netspend Direct Deposit, you can get paid faster than a paper check
- No late fees or interest charges because this is not a credit card.
- Use the Netspend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
- Get your tax refund direct deposited to your account and no more waiting in line to cash your check!
- Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. "Apply Now" for full details.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | N/A | Variable Monthly Fee | No credit check |
- Brink’s gives you the peace of mind you deserve. Securing cash and valuables since 1859.
- With Brink’s Direct Deposit, you can get paid faster than a paper check.
- No late fees or interest charges because this is not a credit card.
- Use the Brink’s Money Prepaid Mobile App to manage your Card Account on the go and enroll to get text message or email alerts (Message & data rates may apply.)
- Subject to card activation and ID verification. Terms and Costs Apply. Issued by Axos Bank®, Member FDIC. Click for full details.
- See additional Brink’s Prepaid Mastercard® Details.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | N/A | Variable Monthly Fees | No credit check |
- With Netspend Direct Deposit, you can get paid faster than a paper check
- No late fees or interest charges because this is not a credit card.
- Use the Netspend Mobile App to manage your account on the go and get text message or email alerts (Message & data rates may apply).
- Get your tax refund direct deposited to your account and no more waiting in line to cash your check!
- Card issued by MetaBank®, Member FDIC. Card may be used everywhere Visa Debit cards are accepted. "Apply Now" for full details.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | N/A | Up-to $9.95 monthly | No Credit Check |
Although prepaid cards can be used the same way as credit cards for purchases, prepaid cards have one key difference. In essence, credit card purchases borrow money from the issuing bank to pay for purchases, then you pay off that debt when the issuer bills you. In contrast, prepaid cards use the money you load onto the card to pay for purchases directly and must be reloaded once that money is spent.
The main result of this difference is that prepaid cards are not technically “credit” cards, so they are exempt from the CARD Act and do not require a credit check to obtain. However, since prepaid cards are not tied to your credit in any way, they won’t report your payment behavior to the credit bureaus, meaning you can’t use prepaid cards to establish or build credit.
Best Credit Cards that Allow Cosigners
While it may seem restrictive, the heart of the CARD Act’s age restrictions were designed to prevent young people from taking on credit card debt they couldn’t repay. As such, if you cannot show you have a reliable income to repay your debts, you’ll need a creditworthy cosigner who can vouch for your ability to pay your debts.
However, getting a credit card with a cosigner isn’t always easy. Not only do you need someone with good credit willing to take on the responsibility, but you’ll also need to find a credit card and issuer that allows cosigners in the first place. This can be easier said than done, as many major issuers won’t allow cosigners, but not all credit card issuers frown on cosigners; here are some of our top picks.
- Earn a $200 cash rewards bonus after spending $1,000 in the first 3 months
- Earn unlimited 1.5% cash rewards on purchases
- Enjoy 1.8% cash rewards on qualified mobile wallet purchases, like Apple Pay® or Google Pay™, during the first 12 months from account opening
- No category restrictions or sign ups and cash rewards don't expire as long as your account remains open
- Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Cash Wise Visa® Card
- 0% Intro APR for 12 months on purchases and balance transfers (fees apply), then a 16.24%-28.24% variable APR; balance transfers made within 120 days qualify for the intro rate and fee
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 12 months | 0% for 12 months on qualifying balance transfers | 16.24%-28.24% (Variable) | $0 | Excellent/Good |
- $150 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening
- Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
- Plus, earn 2% at grocery stores and wholesale clubs, and 1% cash back on everything else
- No annual fee
- If you're a Preferred Rewards client, you can increase that bonus to 25% - 75%
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% Intro APR for 12 Billing Cycles | 0% Intro APR for 12 Billing Cycles (for balance transfers made in the first 60 days) | 16.24% - 26.24% (Variable) | $0 | Excellent/Good |
- 0% Intro APR for 18 months on purchases and balance transfers (fees apply), then a 13.74%-27.24% variable APR; balance transfers made within 120 days qualify for the intro rate and fee
- Get up to $600 protection on your cell phone (subject to $25 deductible) against covered damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Platinum Visa card
- Easy access to your FICO® Credit Score with Wells Fargo Online®
- Zero Liability protection for promptly reported unauthorized transactions
- Convenient tools to help create a budget and manage your spending with My Money Map
- $0 Annual Fee
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 18 months | 0% for 18 months on qualifying balance transfers | 13.74%-27.24% (Variable) | $0 | Excellent/Good |
Before running out and finding a cosigner, be sure you understand what it is you’re asking them to do. Cosigners are more than simply references. Those who cosign for a debt — and yes, your credit card balance represents a debt — are also agreeing to repay that debt in the event the primary cardholder cannot (or simply does not). And rest assured that the credit card issuer will hold your cosigner to their word if you fail to make your payments.
Additionally, it’s not just your cosigner’s wallet on the hook if you misbehave with your new credit card; the cosigner’s credit will also be impacted by the credit card account, as the account will show up on the cosigner’s credit reports. This means that poor credit behaviors, like carrying a high balance or missing payments, will not only cause your own credit score to drop, but may also tank your cosigner’s score, too.
Best Credit Cards for Those 21 and Older
Once you hit 21-years-old, you can apply for any credit card that suits your fancy (and sip a nice Merlot while you’re at it). Of course, the thing to note here is that while you can apply for whatever cards you like, you may still be a far cry from being approved for those cards. See, you still have to meet the credit and income requirements for those cards.
Unless you managed to meet one of the qualifications for getting around the CARD Act, your credit is probably nonexistent on your 21st birthday, making establishing your credit your new number one priority. The length of your credit history can only be improved by, well, having credit over time — so hop to it.
Of course, that’s easier said than done, as the typical credit card issuer wants at least six months of credit history to issue you a card. But you’re not totally out of luck. A whole slew of credit cards are out there, specially designed to help consumers establish their credit histories and start building their credit scores.
No/Limited Credit | Secured Cards
Best Credit Cards for No/Limited Credit
The main issue with not having an established credit history is that issuers can’t get an idea of how much financial risk you present. Think of it like this: if you were to lend someone money, wouldn’t you want to know they can — and, more importantly, will — pay you back? That’s where your credit history comes into play. Enter: the starter credit card.
Offered by many major issuers (and not-so-major ones, too), starter cards are like the base model subcompact car of credit products. In other words, they’ll get you where you need to be, but they’re not likely to have a lot of creature comforts, like purchase rewards or signup bonuses. Our favorite cards for those with no/limited credit include a number of annual-fee-free options.
- Pay no annual fee
- Get access to a higher credit line after making your first 5 monthly payments on time
- Fraud coverage if your card is lost or stolen
- Use online banking to access your account, even from your smartphone, with our mobile app
- Pay by check, online or at a local branch, all with no fee - and pick the monthly due date that works best for you
- Get access to your account 24 hours a day, 7 days a week
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | 26.96% (Variable) | $0 | Average, Fair, Limited |
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
- No annual fee. No late fee on first late payment. No APR change for paying late.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 6 months | 10.99% for 6 months | 15.24% - 24.24% Variable | $0 | Fair |
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
- No annual fee. No late fee on first late payment. No APR change for paying late.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
- Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
0% for 6 months | 10.99% for 6 months | 15.24% - 24.24% Variable | $0 | Fair |
+See More Cards for No/Limited Credit
After you open your first credit account, your creditor — the credit card issuer, in this case — will start reporting your payment behavior to the three major credit bureaus (Equifax, Experian, and TransUnion). This will establish your consumer credit profile, which credit scoring agencies will use to calculate your credit scores. FICO is the most commonly used credit scoring agency, and the FICO Score 8 the most frequently used credit scoring model.
Since most major credit card issuers now offer free FICO tracking as a benefit to cardholders, you can likely keep track of your changing credit score through your online banking/bill paying portal. Don’t be alarmed or dismayed if it takes some time for you to get a credit score, however, as it takes at least six months of credit history for FICO to have the means to calculate your credit score.
Best Secured Credit Cards
Far and away the easiest credit card to obtain — and, arguably, one of the safest — is a secured credit card. Made for credit builders (or rebuilders, as the case may be), secured credit cards require an initial deposit to open the account. That deposit acts as security for the account, and the size of your deposit will dictate the size of your credit line.
Since secured credit cards are less risky for the issuer, they tend to have lower interest rates and fees than unsecured cards for building credit. Plus, your secured card deposit is fully refundable when you close your account in good standing — those pesky unsecured card fees are gone for good. Many of our top-rated secured cards have no annual fee at all.
- No annual fee, and all the credit building benefits with responsible card use
- Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
- You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
- Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
- Easily manage your account 24/7 with online access, by phone or using our mobile app
- It's a credit card accepted at millions of locations worldwide
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | 26.99% (Variable) | $0 | Limited, Bad |
- No Annual Fee, earn cash back, and build your credit with responsible use.
- It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
- Establish your credit line with your tax return by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
- Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
- 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | 10.99% for 6 months | 25.24% Variable | $0 | N/A |
- No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
- The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
- Build credit quickly. OpenSky reports to all 3 major credit bureaus.
- 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
- We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search "OpenSky Card" in Facebook.)
- OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
Intro (Purchases) | Intro (Transfers) | Regular APR | Annual Fee | Credit Needed |
|---|---|---|---|---|
N/A | N/A | 19.64% (variable) | $35 | No credit check |
+See More Secured Credit Cards
Another reason to go with a low- or no-fee secured credit card over a pricey unsecured credit card is that some secured cards can be upgraded down the line. For example, if you have a Discover it® Secured, Discover will periodically check up on your credit progress to see if you can qualify for an unsecured card.
If your credit report passes muster, you’ll be automatically upgraded to an unsecured card, and your deposit will be refunded in full. As an added bonus, the switch is often seen as an upgrade, not a new credit product, which means you’ll hang onto the account history you’ve built with your secured card. (Your average account age is factored into your credit score, so maintaining old accounts can be important.)
Start Off On the Right Credit Foot
As the young cub in the den, it can be challenging to measure your progress against that of the more experienced people around you. But the thing to realize here is that you have time working on your side, and, when used wisely, time can be a powerful weapon (especially when combined with compound interest).
To make the most of that time — and your finances — you should start planning for the future as early as you can. This not only means starting to build your retirement savings with your first paycheck, but also responsibly establishing your consumer credit profile as soon as (reasonably) possible.
Ideally, having a parent or other responsible cardholder add you to their accounts as an authorized user can jumpstart your credit journey. Even without this boost, however, you can build enough credit history in just six months to be eligible for a credit score.
So, once you’ve opened your first credit account, you should focus on building a positive credit history. The most important thing to do is to be sure to pay your bills on time and as agreed each month. Late payments can have a devastating effect on your credit, particularly newly established credit.
You should also be careful to build credit slowly; opening four credit cards all at once won’t build your credit faster, and it could have the opposite effect if you can’t stay on top of the payments. Plus, every credit card application will result in a hard credit inquiry, and excessive inquiries can do some serious damage to a fledgling credit profile (and not a little damage to an established one, for that matter).
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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