Twenty-three percent of millennials don’t have a credit card, according to TD Bank’s 2019 Annual Consumer Spending Index, which means they’re missing out on benefits that can enhance their lives. So, should you pick a card, any card, and be done with it? Oh no.
If you’re an emerging career-driven consumer, getting the account that best suits you requires some consideration. After all, you wouldn’t buy a new laptop without first investigating the advantages and prices of the different types that are available. A credit card is no different.
There are hundreds of credit card options on the market today and sifting through all of them would take a tremendous amount of time. Each has its own set of benefits, and some may be more appealing to you than others. To make it easy, here are 10 great credit cards that will suit you as a young professional, based on the different features you may desire.
Best Sign-Up Bonus for Young Professionals
Some credit cards will give you a one-time bonus just to get their card, and the value of that bonus can be huge. With the Chase Sapphire Preferred® Card, you’ll earn bonus points after meeting the minimum spending requirement within the first three months of opening it.
at Chase'ssecure website
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
18.24% - 25.24% Variable
Points are worth 25% more when you redeem them for travel through Chase Ultimate Rewards.
Best Points Card for Young Professionals
Many credit cards allow you to build rewards points each time you buy something, but some programs are more generous than others. The Wells Fargo Propel American Express® Card gives you three points for every dollar charged on things you probably already purchase, such as dining out, transportation, travel, and streaming services.
at Wells Fargo'ssecure website
- Earn 30K bonus points when you spend $3,000 in purchases in the first 3 months - that's a $300 cash redemption value
- $0 Annual Fee
- Earn 3X points for eating out and ordering in
- Earn 3X points for gas stations, rideshares and transit
- Earn 3X points for travel including flights, hotels, homestays and car rentals
- Earn 1X points on other purchases
0% for 12 months
0% for 12 months on qualifying balance transfers
16.24% to 28.24% (Variable)
You’ll still earn one point per dollar spent when you charge items not in the 3X categories.
Best Cash Back Card for Young Professionals
One of the most attractive credit card features is being able to earn money as you use the card. The U.S. Bank Cash+ Visa Card allows you to choose your own cash back categories for the highest redemption. Just select two categories that give 5% cash back and one that gives 2%. Whatever categories remain is a straight 1% back.
3. U.S. Bank Cash+ Visa Signature Card
- Activate quarterly 5% and 2% cash back categories of your choosing
- All other purchases earn 1% back
- Redeem rewards online as a statement credit, U.S. Bank account deposit, or U.S. Bank Rewards Card
Cardmembers can choose their selected categories up to 45 days prior to the start of the upcoming quarter. This card charges no annual fee.
Best No Annual Fee Card for Young Professionals
Annual fees are fine when you get more out of the card because of all the valuable benefits, but the Discover it® Cash Back card never has an annual fee and still comes with cool features.
at Discover Card'ssecure website
- 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.
- Redeem cash back any amount, any time. Rewards never expire.
- Use your rewards at Amazon.com checkout.
- Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
0% for 14 months
0% for 14 months
14.24% - 25.24% Variable
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.
Best Rideshare Rewards Card for Young Professionals
As you may already know, Lyft and Uber are convenient ways to get around, but the bills can add up fast. If you use these companies frequently, the Blue Cash Preferred® Card can make a big difference in reducing those expenses. It offers cardholders 3% cash back on ride-sharing purchases (as well as other eligible transit costs).
5. Blue Cash Preferred® Card from American Express
- 6% cash back at U.S. supermarkets & streaming subscriptions
- 3% cash back on transit (gas stations, taxis, ridesharing, parking, tolls, trains, etc.)
- $95 annual fee
Cardholders also receive fraud protection, extended warranties, and cellphone protection of up to $1,000 per claim when you use your Amex card to pay your phone bill.
Best Travel Rewards Card for Young Professionals
In addition to the hearty bonus miles you’ll get after charging $3,000 in the first three months of card activation, the Capital One® Venture® Rewards Credit Card offers two times the miles on every purchase you make, and 10 times the miles on thousands of hotels through January 2020.
- Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel
- Earn 2X miles on every purchase, every day. Plus earn 10X miles on thousands of hotels, through January 2020; learn more at hotels.com/venture
- Named ‘The Best Travel Card' by CNBC, 2018
- Receive up to $100 application fee credit for Global Entry or TSA Pre✔®
- Fly any airline, stay at any hotel, anytime; no blackout dates. Plus transfer your miles to over 12 leading travel loyalty programs
- Miles won't expire for the life of the account and there's no limit to how many you can earn
17.99% - 25.24% (Variable)
$0 intro for first year; $95 after that
You can use your miles to fly on any airline or stay at any hotel with no blackout dates. The annual fee is waived the first year.
Best Payment Flexibility for Young Professionals
If you’re the type of person who needs more flexibility in your account management schedule, the Citi Simplicity® Card may be right up your alley. You’ll never be charged a fee for paying late (and the issuer won’t jack up your interest rate if you do), and you can set up your own personal bill payment schedule.
at Citi'ssecure website
- No late fees, No penalty rate, and No annual fee... EVER.
- 0% Intro APR on Balance Transfers for the first 21 months (transfers must be made in the first 4 months)
- 0% Intro APR on new purchases for the first 12 months
- The same great rate for all balances, after the introductory period
- Save time when you call with fast, personal help, 24 hours a day - just say "representative"
- Enjoy the convenience of setting up your own bill payment schedule on any available due date throughout the month
0% for 12 months
0% for 21 months
16.99% - 26.99% (Variable)
This card charges no late fees, no penalty rates, and no annual fee, making it a great starter option for anyone new to credit.
Best Restaurant Rewards Card for Young Professionals
Is your fridge keeping a handful of expired food items cool, or do you rely on others to make or deliver meals for you? The American Express® Gold Card gives you four points for every dollar you charge at restaurants, plus a statement credit of up to $10 per month for you to use when you purchase food from popular delivery services, including Seamless and GrubHub.
8. American Express® Gold Card
- 4X Membership Rewards Points at restaurants and supermarkets
- $120 annual dining credit, $10/month at select restaurants and delivery services
- $250 annual fee
The annual dining credit only covers about half the cost of the annual fee, but you’ll also receive a $100 annual airline fee credit. If you use both, this card may be worth having in your wallet.
Best Entertainment Rewards Card for Young Professionals
Aside from the 4% cash back you’ll enjoy on dining and entertainment purchases, the Capital One® Savor® Cash Rewards Credit Card will also help you have an especially good and swanky time. As a cardholder, you’ll gain access to premium experience packages, including special sporting events and concerts.
- Earn a one-time $300 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
- Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases. Plus, earn 8% cash back on tickets at Vivid Seats through May 2020.
- Receive a monthly statement credit for a Postmates Unlimited monthly membership through Dec. 2019 with the Capital One Savor Card
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
- No foreign transaction fees
- Capital One cardholders get access to premium experiences in dining, entertainment and more
16.74% - 25.74% (Variable)
$0 intro for first year; $95 after that
You’ll receive early ticket access to select sporting events, music festivals, and premier food and wine festivals (among other events), plus VIP entrance and exclusive discounts.
Best Interest-Free Card for Young Professionals
This is a smart card to use if you know you’ll be buying some expensive items but don’t have all the money to pay for them at once. The HSBC Gold Mastercard® offers 0% Introductory APR on credit card purchases for the first 18 months from account opening (18) and charges no annual fee for the convenience.
at HSBC'ssecure website
- 0% Intro APR on purchases and balance transfers for the first 18 months from account opening. Then a variable APR of 13.24%, 17.24% or 21.24% will apply.
- No Penalty APR
- Late Fee Waiver.
- No Foreign Transaction Fees.
- $0 Annual Fee.
- $0 liability for unauthorized purchases.
0% Introductory APR on credit card purchases for the first 18 months from account opening
0% Introductory APR on balance transfers for the first 18 months from account opening
Variable APR of 13.24%, 17.24% or 21.24% will apply after the Introductory Period
You’ll also receive a 0% introductory APR on balance transfers and a low variable APR once the intro period ends.
How Do I Choose a Credit Card for the First Time?
If this is your starter account, be aware that every credit card issuer will expect you to meet certain qualification requirements. So not only should the account have the best terms and fit the demands of your unique lifestyle, you have to be an attractive applicant to the credit card issuer. It’s like dating — you both have to like each other enough to move forward with the relationship.
Your first step will be determining what you most want out of a credit card. Let your needs and desires lead the way. For example, if you really want to travel, a credit card that helps you earn miles for free flights and hotels will be where you want to focus your attention, but it won’t make sense if you’ll be sticking close to home for a while. And a sign-up bonus is wonderful, but not if you can’t meet the minimum spend.
When you’re clear on what motivates you, take a close look at the credit requirements for the card. Having a steady job will be an important qualification factor, but so will your credit history. Pull your credit reports from annualcreditreport.com (a free and safe site) to see what’s on your reports.
If you took out student loans and have never missed a payment, that’s working in your favor. Perhaps you’re a cosigner on a car loan and that too is showing up on your file in a positive way. Pulling your credit reports is also an opportunity to clear up any errors you may spot by disputing them with the credit reporting bureaus.
Mistakes and fraud can hurt your ability to qualify for a credit card because high debt and collection accounts make it seem like you’re a poor credit risk.
Then check your credit scores to see where you stand numerically. FICO and VantageScore are the two most common credit scoring models, and their scores range from 300 to 850. Having higher scores is preferable since they are a predictor of lower credit risk.
Although credit cards are available to just about anybody, including people whose scores are at the bottom of the scale, scores in the 700 and above range will give you access to far greater account options.
What is the Best Credit Card for Someone Just Starting Out?
In the event you have no credit report because you have no loan associated with your name — or you do but your credit scores are very low — you may want to start out with a secured credit card. These products are much easier to qualify for than their unsecured cousins.
With secured cards, you make a cash deposit that will guarantee the credit line. That sum is typically the same as the amount you’re allowed to charge. Therefore, if the security deposit is $1,000, that will also be your credit limit. The issuer assumes very little risk because if you don’t satisfy a debt you acquire on the card, the issuer will take the funds held in deposit.
Secured cards function the same as unsecured credit cards but the majority of them come without the bells and whistles you may want. Use one responsibly by paying on time and in full, however, and it won’t be long before you create a strong credit score. It takes about six months to develop a FICO score and a couple of months to produce a VantageScore, so the sooner you start charging responsibly, the better.
Some secured cards even transition into unsecured cards after a specific number of months of responsible use. Just make sure the issuer sends your account information to the three credit reporting agencies — Experian, Equifax, and TransUnion — as not all do.
A final bit of good news regarding secured cards: You’ll always know that you have money set aside as savings. You can close the secured card any time your balance is at zero to reclaim the deposit. It’s comforting to know the cash is there should you need it.
After your credit scores are in the good to excellent range, you will probably be eligible for credit cards with a number of perks.
How Many Credit Cards Should One Person Have?
There is no specific number of credit cards you should have to create and maintain a high credit score. If you have a few cards you keep active with positive borrowing and repaying habits, you will certainly populate your credit reports with great information.
Begin with one credit card. Keep it in good standing by paying on time and in full each month and then add others that appeal to you when you’re ready to reap more benefits. But be prudent with the applications — your credit score will be impacted each time you apply and with every new account you get. Apply for a bunch all at once and your scores will decline, making it tougher to qualify for the account you want.
You’ll also want to review every account you have to check for accuracy and track spending. You should pull up the account information online on a weekly basis, read over what you’ve spent and where, and stop charging when the balance is getting too high for ease of payment.
You can become overwhelmed and give up on this process when you have several credit cards in use. Not keeping track of your card charges can quickly build into unmanageable debt. You’ll also want to stay on top of the points and cash you’re racking up and know when certain categories are offering increased reward accumulation. In short, don’t have so many cards that managing them becomes laborious or confusing.
What you want is enough of a cumulative credit line to cover your projected spending. A single credit card that has a small limit may be insufficient, so adding one or two more with a higher credit limit to your wallet may be a wise idea. Below is a chart of the average credit limit available based on one’s VantageScore.
Many people have a credit card in reserve for emergencies, so think about the various expenses that could conceivably come up in your life and how you would pay for them on the fly. There’s a chance you’ll come up short. According to a recent LendingTree survey, only 40% of millennials can cover a $1,000 emergency expense with cash in the bank.
A credit card that allows you to charge something like an expensive car repair bill so you can continue to drive to work can act as a crucial safety net. Because you don’t want that charge to hurt your credit utilization ratio, which will bring down your credit scores, the credit limit should be high enough to cover an emergency expense but not add a balance you can’t pay off.
Be Realistic with Your Spending and Expectations
Remember, shopping for a credit card is like shopping for any other important product — you’ve got to be realistic. A pre-owned vehicle may be within your financial means now, but a tricked-out Tesla isn’t. That doesn’t mean it won’t be in the future. You just have to build up to it. So start with the credit card you’re eligible for and that best suits your needs, then add to your plastic portfolio when you’re prepared to handle a few more like a seasoned credit pro.