Credit cards can be a little scary, and committing to your very first one can be overwhelming. After all, there’s no shortage of horror stories about uncontrolled and crippling debt. And once you get past those, you’ll find that there are so many credit cards out there — all with their own terms, fees, and interest rates — to choose from.
But don’t fret. For starters, though credit card debt can be a major problem, credit cards themselves aren’t the enemy. When used right, they can play a key role in your journey towards financial wellness.
For instance, they can help you build a good credit score. Your credit history (or the length of time you’ve been using credit) makes up around 15% of your credit score. When combined with timely payments, having the right credit card now can help you immensely later on, when it’s time to think of buying a house, a car, or any other major life purchase.
Credit cards are also pretty useful in an emergency. Since most Gen Zers and younger Millennials haven’t had a lot of time to build an emergency fund, credit cards can help us get through emergency situations. (Though, of course, emergency funds are still important!)
But perhaps most interestingly, credit cards also provide rewards for all the spending we’re already doing anyway in the form of cashback promos. This means that you get money out of purchases you’re already making. The key, really, is to find the right credit card that suits your lifestyle and needs — preferably with no annual fees.
Here’s the good news: That’s entirely possible. Below are some of our recommendations for beginner-friendly credit cards for young Millennials and Gen Zers looking to build credit, maximize dining and travel rewards, get through college, or fix some previous credit blunders.
The Best Credit Cards for Young Millennials and Gen Zers
What Are the Best Credit Cards to Build Credit?
When you’re new to credit cards, the application process can be pretty daunting. It doesn’t help that among Gen Zers, 3 in 10 say that their first credit card applications were turned down — the entire thing feels like too high a wall to scale.
For the longest time, the saying “it takes credit to build credit” has shut many people out of the credit-building journey altogether. But thankfully, there are a few choice cards out there that are opening more doors for aspiring young Millennial and Gen Z credit card holders.
Discover It Secured
In general, Discover is a credit card brand that tends to be friendlier towards those who are new to credit. And with Discover It Secured, the company provides credit-building opportunities for those with low credit or no credit history.
The “Secured” part of the name means that you’ll need to provide a security deposit of at least $200 to use it, which works kind of like a safeguard for the bank: They don’t really know much about you because you don’t have a credit history just yet, and so they’ll hold on to the $200 first while you use their card to make your purchases.
Now, you might be asking: What’s the point, and why not just get a prepaid or debit card if you’re depositing anyway? Well, the difference is that Discover reports to the three major credit bureaus, which helps you build your credit in a way that those other cards can’t.
The good news is that you’ll get that $200 deposit back after the seven-month mark. At that point, Discover reviews your credit activity, and if you pass, they return your $200 and transition you to a regular, or unsecured, credit card.
Plus, there’s no annual fee in exchange for using it. And with a 2% cashback at gas stations and restaurants — as well as a 1% cashback on all other purchases — you’d be happy to use it regularly for things you’re already spending on.
At the end of your first year, they also give you something called a cashback match: Whatever cash back you earned in that time, they’ll automatically match it. No ifs, no buts.
I know, it sounds a little too good to be true, but it’s real, and so is this next card.
Petal 2 “Cash Back, No Fees” Visa Card
A relative newcomer to the credit card game, Petal believes that your credit score doesn’t tell the whole story about you.
Like Discover, it’s made an effort to reach out to those with little to no credit history, but the approach is a bit different: Instead of a security deposit, it has something called a Cash Score. This uses data about your income, savings, and spending history as an alternative to a credit score when you apply for a credit card from them.
From there, the company reports to the three major credit bureaus — making the Petal 2 “Cash Back, No Fees” Visa Card a pretty great way to start building credit.
Aside from the absence of an annual fee, the card is so named because there are no late fees, foreign transaction fees, or any kind of fees you’ll need to worry about.
The Petal 2 “Cash Back, No Fees” Visa Card also incentivizes good financial habits. New users automatically get a 1% cashback on eligible purchases right away, but this goes up to a 1.5% cashback after you’ve made 12 on-time payments. From selected merchants, the cashback reward can range from 2% to 10%.
The card comes with a helpful app that helps you find these selected merchants and monitor your monthly spending against a set budget. It sends regular payment reminders and even provides an interest calculator, so you understand how much interest you’ll owe based on how much of the bill you’ll pay. Plus, it lets you keep track of your credit score — and how all of this is helping you build it.
What Are the Best Credit Cards for Rewards?
Rewards-focused credit cards tend to have high credit score requirements and high annual fees. The former can’t be helped, but it’s something you’ll be able to achieve with the help of the cards we’ve discussed so far. As for the latter, it turns out that more and more credit cards today are providing plenty of rewards for no annual fees.
This means that you’ll get even more bang for your buck, and can keep your card for as long as you like — your credit score will thank you for it.
Discover It Cash Back
Most cashback rewards programs lie within the 1-2% threshold, but with the Discover It Cash Back credit card, you can get an impressive 5% in select categories.
There’s an interesting catch, though: The 5% cashback categories change every quarter and cover up to $1,500 in purchases. For the year 2022, the schedule looks like this:
- January – March: Grocery stores (including supermarkets, meat lockers, bakeries, smaller grocery stores, and grocery delivery services, but excluding Walmart and Target), Fitness Club & Gym Memberships;
- April – June: Gas stations and Target;
- July – September: Restaurants and PayPal; and
- October – December: Amazon.com and Digital Wallets (including Apple Pay, Google Pay, Samsung Pay, and Garmin Pay).
Though it’s a bit more complicated than your standard cashback program, the schedule does kind of make sense. The start of the year, after all, is a time for sticking to those fitness New Year’s resolutions, while the summer months provide a nice opportunity to dine out and explore local gastronomic delights. Plus, the 5% cashback might be especially useful in the months leading up to Christmas and all the holiday shopping it involves.
So if you don’t mind keeping track of those categories and activating the program every quarter, then the Discover It Cash Back card might be for you. After all, it’s not too much work for five times what you’d usually get in terms of cashback promos.
Plus, you get a 1% cashback for all your other purchases, as well as that sweet cashback match at the end of your first year — no annual fees involved.
Citi DoubleCash Rewards Credit Card
If, however, you don’t have the brain cells to remember changing cashback categories every three months — and that’s perfectly fine! — then the Citi DoubleCash Rewards Credit Card is a worthy tool to have in your arsenal instead.
The double cash promised in its name is a pretty great deal, and it works like this: You get 1% cashback for every purchase, and then you get another 1% when you pay at least the minimum amount due on your bill on time. So as long as you’re paying back what you owe just fine and building good financial habits that help you get higher credit scores, then you effectively get a 2% cashback.
This applies to every single purchase — no quarterly categories to enroll in, and no caps to the cashback amount you get to earn. Plus, it has 0 annual fees.
For those who rely a lot on balance transfers, you’d also be pleased to know that the Citi Double Cash Card has a pretty generous offer of 0% introductory APR for your first 18 months.
What Are the Best Credit Cards for Young Adults Who Eat Out?
The thing about credit cards and their rewards programs is that they add perks to purchases we’re already making — and a big part of that is food.
Sure, most of our food budgets as young Millenials and Gen Zers tend to go to groceries. But if you’re one to eat out regularly and spend more on high-quality food made by professionals, then a credit card specifically geared for foodies like you may be the right addition to your financial arsenal once you’ve built up your credit score.
The U.S. Bank Altitude Go Visa Signature Card
If you love food, then the U.S. Bank has an offer for you. Kind of a dream come true for foodies, the U.S. Bank Altitude Go Visa Signature Card has no annual fees, and plenty of rewards that are not just for your taste buds.
For dining, takeout, and restaurant delivery, cardholders enjoy four times the normal points awarded. There’s also a 2x multiplier for grocery stores, grocery delivery, gas stations, and even EV charging stations. Plus, you can get 2x your points for streaming services, alongside a $15 credit for streaming sites like Netflix, Hulu, HBO Max, Disney+, Spotify, and Apple Music.
This means that whether you’re dining out (and refilling your gas tank on the way there) or eating at home (to watch Netflix over dinner), then the U.S. Bank Altitude Go Visa Signature Card has got you covered.
Aside from the introductory 0% APR for the first 12 billing cycles, bigger spenders get an extra reward. If you spend $1,000 within the first 90 days after you get your card, you receive 20,000 bonus points.
These points never expire, and can be used for merchandise, gift cards, cash back, or travel opportunities. If you do decide to travel, the card also provides even more perks, including travel and emergency assistance services and no foreign transaction fees.
Capital One SavorOne Cash Rewards
Those who enjoy dining out regularly stand to gain a lot from the Capital One SavorOne Cash Rewards credit card for an annual fee of $0.
Cardholders enjoy a 3% cashback when using this card at restaurants, fast-food joints, cafés, bakeries, bars, and nightclubs. The same rate applies to grocery stores (excluding Walmart and Target), as well as entertainment expenses like movies, concerts, record stores, tourist attractions, and popular streaming services like Netflix, Hulu, and Disney+.
Outside of these categories, all other purchases earn you a 1% cashback. There are no foreign transaction fees, and there’s a 0% introductory APR for the first 15 months of billing. If you have any questions at all about dining, entertainment, or travel, there’s also a 24-hour complimentary concierge service you can count on.
Plus, using your card for $500 worth of purchases in the first three months of opening an account entitles you to a one-time cash bonus of $200. If you’re already spending that much on groceries and dining out anyway (the Gen Z and Millennial monthly average tend to run a little higher), then congrats on your $200.
Overall, spending around $5,000 on groceries a year translates to an estimated $150.
What Are the Best Credit Cards for Travel?
Aside from food, travel is another big-ticket item on most young Millennial and Gen Z budgets, and rightly so. Study after study tells us that travel has a pretty long list of benefits: It promotes heart health, relieves stress, boosts creativity, and contributes to better mental health.
With the right credit card, however, we can add a few financial rewards to this list.
Bank of America Travel Rewards
The Bank of America Travel Rewards credit card is as straightforward as it gets: You get 1.5 points for every dollar you spend on purchases, and these points can be redeemed in restaurant bills, travel expenses, or credits in your statement.
What makes this card unique is that its definition of travel is broader compared to its peers, and includes flights, hotel bookings, vacation packages, cruises, rental cars, and baggage fees, among others. There’s also no limit or expiration date to the points you make, so you can keep racking up points while you plan for a well-deserved vacation next month or next year.
On your actual trip, you can count on zero foreign transaction fees wherever you use your card. And because it’s a VISA card, you’ll find that it’s broadly accepted around the world.
Moreover, there’s a bonus of 25,000 points if you use your new Bank of America Travel Rewards credit card for $1,000 in purchases within the first 90 days of owning it. This translates to $250 in travel reward purchases.
As for interest, there’s a 0% introductory APR in the first 15 billing cycles.
Discover It Miles
If you’re planning to do a lot of traveling, then this card might be even better.
For every dollar spent on all purchases, the Discover It Miles travel credit card gives you an unlimited 1.5x miles for every dollar. These miles never expire, and can be used in several ways:
- As payment for a part of or the entirety of your credit card bill;
- As cash to be deposited to your bank account; and
- As credits for travel purchases, like airline tickets, hotel rooms, car rentals, commuter transportation, online travel sites, travel agents, restaurants, and gas stations.
There are no blackout dates to worry about when planning your travel expenses.
Also, remember that cashback match program we’ve mentioned in the other Discover cards on this list? This card has its own version for your miles: At the end of your first year, they’ll match whatever you earn mile-for-mile.
For instance, if you spend an average of $900 monthly on credit card purchases, this translates to 16,200 miles at the end of the year — or $162. The Discover Match program doubles that to $324 in travel, restaurant, and gas station rewards.
Chase Sapphire Preferred Card
This list was built for those of us who don’t like annual fees, but for the Chase Sapphire Preferred Card, I have to make just this one exception. Hear me out.
This credit card has a $95 annual fee. However, it’s a bit lower than other credit cards that charge as much as $695, and comes with an enticing set of rewards for travelers.
For instance, you get five points for every dollar spent on travel through the Chase Ultimate Rewards program, which allows you to use points you gained from other Chase credit cards you may own. You also get three points per dollar spent on dining (including takeout and eligible delivery services), as well as streaming services and online groceries (excluding Target and Walmart). You get two points per dollar on all other travel expenses, and one point per dollar for all other purchases.
These points are worth 25% more when redeemed for travel through Chase, and you’re also able to transfer them to any of the company’s three hotel partners and 11 airline partners.
Perhaps most crucial of all is the generous sign-up bonus. Of course, not everyone spends $4,000 in three months, but if you’re one of those people and can use your Chase Sapphire Preferred Card for that much worth of purchases in that amount of time, then you’re automatically entitled to 60,000 bonus points.
That’s pretty big. It translates to $600 dollars — enough to cover six years’ worth of annual fees, with change. But if you choose to spend these points on travel, the 25% bonus I mentioned above kicks in, which means you have $750 to be redeemed through Chase Ultimate Rewards.
There are also some other travel-related perks, like no foreign transaction fees, trip cancellation insurance, baggage delay insurance, trip delay reimbursement, and travel and emergency assistance services.
They’re currently partnered with DoorDash, Peloton, and Lyft for extra points and free delivery promotions.
All this means that though there is that $95 annual fee to think about, there’s plenty of value you can gain — especially if your lifestyle already aligns with the card’s rewards and benefits structure.
What Are the Best Credit Cards for College Students?
A credit card while in college may not be the best idea if you don’t have the discipline for it yet, but you can’t deny that the benefits to having — and responsibly using — one are pretty good.
Aside from the convenience it might bring you when buying books or paying for groceries, having a credit card as a college student means you get a head start on building credit, which can help you find an apartment, get a car loan, or land better insurance rates after you graduate.
Even better, there are certain cards whose terms and rewards programs are specifically tailored to students’ needs.
Discover It Student Chrome
For college students who are U.S. Citizens, at least 18 years old, and enrolled in a two- or four-year college, the Discover It Student Chrome is an exceptional starter card that has no annual fee and no required credit score to apply. More importantly, it lets you earn points and build credit while you’re still in school.
Student cardholders will enjoy a 2% cashback for every time you fill up your gas tank or dine out, and this reward is valid for up to $1,000 in gas station and restaurant purchases every quarter. There’s also a 1% unlimited cashback for all other purchases you make. And to help deal with the initial expenses of college, like school books and dorm room essentials, you get 0% APR for the first six months.
To help build healthy financial habits, the card provides students with a free FICO score and forgiveness on their first late payment. There’s also a chance to be a good influence: The refer-a-friend program means that you earn a statement credit if you refer a friend who gets approved for a card, too.
And as with the rest of the Discover cards on this list, you get a nice cashback match reward at the end of your first year. There’s no minimum spend or maximum reward: For every dollar you earned in your first 12 months as a Discovery cardholder, they’ll match it.
Deserve EDU Mastercard for Students
Like the Discover card above, the Deserve EDU Mastercard for Students is perfect for those who have no credit history — except this time, it’s designed for international students studying in the US.
This demographic tends to have a harder time applying for credit cards, as they don’t usually have one of the most common requirements: a social security number. Enter, Deserve.
Like Petal, Deserve uses its own underwriting process for evaluating applicants based on alternative criteria so you don’t have to worry about having an existing credit history. It also reports to the three major credit bureaus so you can get started on building your credit in the US.
What’s more, the Deserve EDU Mastercard for Students doesn’t charge any annual fees or international transaction fees. It doesn’t require a security deposit, nor any cosigners.
The rare offer for international students kind of balances out the relatively barebones rewards program. For cardholders, there’s an unlimited 1% cashback on all purchases and cell phone protection of up to $600.
If you spend $500 dollars in the first three billing cycles, you’re eligible for a free Amazon Prime Student subscription. This is valued at $59, as it lets you enjoy free shipping, discounts at Whole Foods, and access to Prime Video.
The Deserve EDU Mastercard for Students also has a refer-a-friend program. If you refer a fellow international student who gets approved for a card, you both get $30. It’s unlimited — so it’s time to befriend everyone in the international students’ dorm.
What Are the Best Credit Cards for People With Bad Credit?
Bad credit can feel like a curse. Aside from making it impossible for you to access a lot of credit cards and their very useful reward systems, bad credit can make you pay more for loans and insurance, while also making it harder to rent an apartment and get utilities. Aside from being a headache today, this can also have a huge impact in the long term.
If you’ve found yourself burdened by this type of curse, the reality is that the best way out of it is through it. You’ll need to push your credit score up, bit by bit. One of the best ways to do this is through secured credit cards.
Capital One Platinum Secured
Open for those with “poor” credit — or within the 300-629 range — the Capital One Platinum Secured credit card is a pretty good first step to take on your way out of a bad credit slump.
Because it’s a secured card, you’ll need to put down a deposit. Depending on your application, you might be able to get a $200 initial line of credit in exchange for a minimum refundable deposit of $49, $99, or $200.
You can deposit more if you’d like a higher credit limit, but the automatic reviews mean you may qualify for a higher credit limit with no need to make additional deposits after the six-month mark — provided that you’re using your card responsibly.
There are no annual, foreign transaction, authorized user, or any other hidden fees, and you get to choose the monthly due date that works best for you. Plus, when you make payments on time, you get to earn back your security deposit as a statement credit.
Moreover, the card lets you monitor your credit through CreditWise. It’s free and won’t hurt your credit score, so you can keep tabs on your progress whenever you like. From there, you can graduate to an unsecured credit card — preferably with a few more benefits.
Capital One Quicksilver Secured Rewards
Ideal for those with poor credit and a bit more cash on hand, the Quicksilver Secured Rewards credit card requires a minimum $200 security deposit. In return, you’ll get most of the benefits of the Capital One Platinum Secured, plus a few extra perks.
For no annual fees or any kind of hidden fees, the Quicksilver Secured Rewards card provides you with an initial $200 credit line, which can be increased with no additional deposit after an automatic review at the six-month mark. You can also earn your deposit back through responsible card use, and be able to upgrade to an unsecured Quicksilver card.
Moreover, you’ll get comprehensive credit reporting to all three major credit bureaus, and the ability to monitor your progress for free through CreditWise.
Where this card shines is the 1.5% cashback you earn on every purchase, which credit cards only tend to give to those with higher credit scores. There are no limits or rotating categories for you to worry about either, so you can focus on rebuilding your credit in the long run.
Of course, the $200 minimum security deposit might be expensive for some to provide upfront, in which case it might be worth trying for Capital One Platinum Secured instead. But if you can cover that amount, then the Quicksilver Secured Rewards program is well worth it on your journey towards better credit.
What About Prepaid Cards?
Though some people might call them “prepaid credit cards” or “prepaid debit cards,” prepaid cards comprise a whole other class of plastic. They let you use money you’ve loaded into an account to pay for goods and services, and unlike debit cards, you don’t need to link this type of card to your bank account. Plus, unlike credit cards, they don’t involve borrowing. This means there are no credit checks — and, unfortunately, no credit-building benefits to using them.
There are some cases where prepaid cards can be a good option. For starters, if you don’t trust yourself with a credit card just yet, a prepaid card can help you avoid the temptation — as well as the risk of racking up debt.
They’re also relatively easier to set up compared to debit and credit cards, though you can use them for most of the same things, like paying bills or setting up direct deposits. Even the $250,000 FDIC insurance is the same.
So if you’re currently struggling to stick to a budget, a prepaid card might be worth trying out first before you graduate to a debit card or, for all the benefits we’ve discussed here, a credit card of your own.
Bluebird by American Express
The Bluebird by American Express, created in partnership with Walmart, is a rare prepaid card in that it doesn’t charge any monthly or purchase transaction fees. It also goes the extra mile among its peers with services like low balance alerts and family subaccounts.
You can get the card for free online or for $5 in the store, and can load up to $100,000 into your balance. From here, there are a few ways to add money to your card for free, like direct deposits, transfers from a linked debit card, mobile deposits, or cash reloads at Walmart registers. The catch is that mobile check deposits involve a 10-day waiting period. In contrast, deposits at other retailers will cost you $3.95.
As for getting your money, you can withdraw for free at any of MoneyPass’s 300,000 ATMs. However, there’s a $2.50 fee at all other ATMs, plus any operator’s fees that may apply
What Is the Best Way to Pay off Credit Cards?
In your journey towards a healthy credit score and financial wellness, getting any of the credit cards covered above is just the first step. The real battle is in using them responsibly — and a big part of this is in paying your bills.
No matter the card you get, your credit card issuer will send you your monthly bill. This includes the total amount due, as well as the minimum payment you need to make and by when.
How Much Should I Pay?
Just paying that minimum amount on time helps you with your credit history and building a healthy credit score. Whatever you don’t pay out of that minimum rolls over to next month’s balance, and will start to get charged interest.
Now, many of the cards listed here have a 0% introductory APR, which means they won’t charge you interest on this balance just yet. However, the 0% APR doesn’t last forever. Whether it’s six or 18 months, the introductory period will end at some point, and then you’ll start having to pay an additional interest of anywhere between 12% to 24% of what you owe.
People with higher credit scores get to enjoy the lower end of that range, but for those who haven’t built up a good enough credit score, it’s likely that you’ll be paying as much as 24 cents for every dollar you owe on your credit card.
This is why although you can technically just pay for the minimum amount due and let the rest roll over to the next month, it’s still not a very good idea.
Letting your balance balloon over time can cause some pretty big problems down the road, especially if you’re carrying too large of a credit card debt in relation to your current credit limit — something that will definitely impact your credit score. This is called your credit utilization rate, and it forms up to 30% of your credit score.
A good ratio to maintain is 30% of your credit limit. So if you have a credit limit of $1,000, then it’s best to keep your debt at or below $300 at all times.
When Should I Pay My Balance?
As for when to pay, the two good options are on-time and early. This is because credit card payment history makes up some 35% of your credit score, so a late payment will definitely impact your journey towards healthy credit.
Moreover, late payments cost you in other ways: Your credit card issuer may charge you late payment fees, or they may hike up your APR to what’s known as the penalty level. Consequences like these can easily cancel out the benefits you may be getting from your credit card.
How Can I Pay My Credit Card Bill?
Depending on your credit card issuer, you may have several ways to pay. A good idea is to set up an auto payments system through your issuer and bank so you never miss a due date. But you can also pay your bill the manual way:
- Through online payments: Many credit card issuers today have their own apps that let you pay through your bank. If yours doesn’t, then most banks also have apps that let you pay your bills there.
- With cash: Though this option has become less popular among cardholders and issuers alike in recent years, some credit card issuers will still allow you to make cash payments — either deposited through a bank branch or at an ATM.
The Right Credit Card Is Out There for You
The grown-up world of credit cards may seem confusing, overwhelming, and needlessly complicated. But it can also be pretty rewarding, especially in terms of your credit score.
If you sit down and take a look at the credit card options for young Millennials and Gen Zers on this list, you’d find that there is likely a good fit for your needs and preferences out there, as well as a world of perks just waiting for you to jump in.
So do your research, and once you’ve gotten that all-important piece of plastic in your wallet, make sure to use it responsibly.
May the odds — and rewards, credit limits, and fees — be ever in your favor.