If you're a young professional, it's important for you to establish a solid credit history, especially if you want to own your dream home or a new car someday. The right credit card can help you do that. Not all cards are created equal though, so you don't want to sign up for the first card offer that hits your mailbox. If you're not careful, you could end up with a credit card that has unfavorable terms and no real benefits, leading you down the path towards credit card debt, which will be especially tough if you're still in student loan payback mode.
Whether you're totally new to credit cards or you're ready to move on from the starter card you had in college, there are products that are perfect for every situation and spending style. In fact, some cards will even reward you for your spending during your young adult years if you have a track record (even a short one) of using credit responsibly. That is, you could be leaving money on the table if you don't choose the right card. We did the research for you to find the best credit cards for young professionals like yourself who are ready to enter the credit big leagues.
When selecting these top choices, we considered a few key factors:
Reasonable qualifications. Most young adults should stick with credit cards that require "Fair" or "Good" credit, as opposed to "Excellent" credit, which takes time to build up to. But if you entered the credit world early and have a rockin' FICO score, don't sell yourself short.
Rewards potential. You don't have to be a superuser to get some kind of benefit out of your credit spending. If you use a card regularly and pay off your balance in full monthly, it's a shame to not get cashback or some kind of reward.
No or low fees. Finally, we felt it's best to avoid high annual fee cards at this point in your life since such cards are usually intended for more advanced credit card rewards hackers who can "game" the system to their advantage. But we didn't overlook all cards with fees because they could be worth your while under the right circumstances. Using these criteria, we found five card options that would make a great addition to any young professional's wallet. Take a look and choose the one that best fits your lifestyle!
1. The Blue Cash Everyday card
A great deal for supermarket shopping. Fund your food cravings without guilt.
For young people who are on their own for the first time, a solid cashback card that offers the most cashback at supermarkets, mid-rate cashback rewards at gas stations, and point for point on everything else can be a great fit. In a nutshell, that's the American Express Blue Cash Everyday card.
A generous start. The signup bonus is offered as a statement credit after you spend to a reasonably low purchase minimum on your new card within the first three months. Because you don't have to spend a ton to receive the benefit, it's one of the best among cash cards.
Score more at the supermarket. If you're constantly running to buy groceries (and gassing up your car to do it) leave your debit card home and start using this card for the extra rewards value you'll get at supermarkets and gas stations.
Redemption made easy. Reward Dollars can be redeemed for statement credits, gift cards, and/or merchandise in $25 increments.
Hand-holding customer service is heralded
Strong customer service. Customers report a high lever of customer service when they have interactions with American Express.
Great intro APR offer. A nice benefit of the Blue Everyday card is its welcome offer for balance transfers. If you're a young professional who wracked up a balance during grad school, it may be a good opportunity to pay it down. If you have a big purchase that you are considering, you could open this card, qualify for your signup bonus, and then have an interest free period to pay.
Lots and lots of AMEX Offers. Log into your account to peruse and link various discounts and offers to your card. You might get a $15 statement credit if you use your card at a particular restaurant, for instance.
Why we chose it
What sets the American Express Blue Cash Everyday cash back card apart is the opportunity to earn a bit extra at the supermarket and at the pump, whereas many other cashback cards give back a flat rate on all purchases. Plus, the welcome offers make it a winner in the short term.
Be aware of these limitations:
Not great for travel. This card has a foreign transaction fee, so try sticking with stateside purchases.
Not everyone accepts American Express. You may not be able to use this credit card with some merchants, so keep that in mind if it's going to be the only card in your wallet. To get the most out of the Blue Cash Everyday card, make it your go-to payment option at the supermarket and gas station, and qualify for the bonus. And don't forget to stay on top the offers—you have to activate them in order to use them, so check in periodically.
2. The Citi Double Cash card
This card is most rewarding when you get cashback rewards on bills you are paying anyway.
The Citi Double Cash card is a simple-to-use rewards card that lets you earn cashback twice&mmdash;cashback on all purchases and the points get doubled as you pay—hence, the name of the card. Some other card details to note include:
A bonus bummer. There isn't a bonus offer on this card, making it more of a long term, everyday choice rather than one that gives you a short term boost of points or dollars.
A built-in double rewards rate. When you combine the cash back you earn on every dollar you spend with the additional points for every dollar you pay on your bill, the savings add up. If you spend $500 a month (and pay it off on time) you'll have earned back $120 by the end of the year. Just use it as if it was a debit card and you're good to go.
Redeeming points is easy peasy. As soon as the cash rewards balance totals $25 or more, you can request a check, apply it as a statement credit, or redeem it for a gift card from the selection offered. It's worth noting that if you redeem cash for a statement credit, that won't count towards your 1% payment reward—therefore, you're better off requesting a check or gift card when you redeem.
Lovin' the lengthy balance transfer promo (but wait, there's more!)
A top-notch balance transfer card. The 0% for 18 months from date of first transfer when transfers are completed within 4 months from date of account opening. This can help ease some stress if you're simultaneously dealing with a student loan. There is a 3% fee as with most cards, and the transfer must be done within four months of the card's opening.
Working for you to find the best deals. Citi Price Rewind searches for a lower price on items purchased at hundreds of online merchants. If it's found at a lower price within 60 days of your purchase date, you'll receive the difference.
A second chance. It's also nice that you get a pass on your first late fee (just don't make a habit of it, since there is a penalty APR of up to 25.74%).
The Citi Double Cash cardmakes our list because of its simplicity (perfect for those new to credit who don't want to dig into too much fine print) and because it encourages responsible payment. There's nothing wrong with a little extra incentive to pay your bill, right?
Top-notch for those with great credit and great patience
A few potential cons to consider:
Your APR will depend on your credit. Purchase APR ranges from 15.74-25.74%, so if you tend to carry credit card debt or your credit history isn't great, you'll pay more if you carry a balance.
No up-front bonus. Because you don't get a rewards boost just for signing up, it will take longer to see the benefits and might make other cashback cards more attractive. If you plan to use the card for regular spending, this card is like getting an automatic discount on everything (assuming you pay on time and in full each month). For everyday use and to help reward responsible habits, the Citi Double Cash Card is a smart choice for newbie card users.
3. The Capital One QuicksilverOne Cash Rewards card
This card boasts a big-time bonus. With a low minimum spend threshold and high rewards, you'll love it for a short term boost!
Of all the cashback card choices on our list, the Capital One QuicksilverOne Cash Rewards card is the bonus boss.
A bonus bonanza. You'll get a sweet cash rewards bonus after you spend to minimum on purchases in the first months after account opening. The bonus is higher than most cards. Even better, every time you redeem, you'll get a cashback rewards redemption bonus to use for your next redemption.
No-brainer earnings. You'll earn unlimited cashback on all purchases—no categories to check or opt into.
Redeem anytime. The differentiator here is if you tend to forget to check your rewards balance, you can set up an automatic redemption either by calendar date or when you reach a set amount. And there's no minimum to redeem for a statement credit or check.
Terms that work to your (spending) advantage
Interest-free spending for more than a year. Like the Blue Everyday card, this one also has a good introductory APR on purchases and balance transfers that lasts longer than many cards of this type.
Graduate to more credit. Perfect for young professionals, the Capital One QuicksilverCash card will raise you to a higher credit line after you make your first several monthly payments on time—kind of like the bachelor degree of credit cards.
Even though there is a small annual fee on the card, the rewards program is not complex, and there's no cap on rewards. The signup bonus is enough to cover your fee for five years.
Jump on the signup bonus but don't get in too deep
Note the high APR. It's in your best interest to pay your bill in full each month.
The pesky fee. Even though we overlooked the annual fee in light of its other perks, it still stinks that there is one.
Not as good over the long term. Ultimately, the rewards rate is lower than the Citi Double Cash's, but the signup and redemption bonuses can make it more valuable in the early years. The best way to maximize this card is to take advantage of the signup bonus. Just don't get in over your head doing it! If you're not in a position to get a card, specifically for the sweet bonus, because you may have trouble paying it back, then skip this card.
4. Discover it Secured
This card is a great card for entry-level credit seekers, who want to make a smart choice on a credit card that could lead to an unsecured credit line later.
Although simplicity was a perk of some of the cards above, many young professionals want bigger and better rewards even if it takes a little more work. The Discover it Secured offers a number of great perks with category tiers. Earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter. Earn 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases.
The bonus comes later. There isn't one, but Discover will automatically match all the cashback you've earned at the end of your first year, which is a unique benefit.
Points power, no activation required! Unlike the Discover it Cash Back card for more seasoned consumers, the Discover it Secured has no rotating categories to track. The bonuses are a little smaller, but this is a great introductory card into the world of bonus cashback categories because it allows you to earn more for purchases you are already making, but doesn't require you to activate categories to receive the best rewards available for the card.
Redemption your way. Anytime you want, in any amount. Simple!
A hookup with Amazon. If you prefer, you can use your rewards during your Amazon.com checkout instead of as cash back.
No penalty APR. You'll get a one-time free pass for your first late payment, and at no time will paying late raise your APR, something that most other credit issuers do. (Still, pay that bill!)
Nothing beats simplicity, rewards, and an eye on risk
It combines the ease of use of other cards on the list along with the option to up your rewards game into rotating categories. Also cool for new users is Discover's Identity Alerts program, which will monitor your credit and identity for fraudulent activity—for free!
The matching makes up for being in the credit card minority
The bottom of the acceptance totem pole. Discover just isn't as widely accepted as others, meaning you'll most likely want to have a backup card. Even so, if you can maximize the rotating categories and do a decent amount of spending throughout the year, you'll especially enjoy the automatic matching that Discover it gives after the first year.
5. Chase Sapphire Preferred
Unlike the other cards on this list, this card caters to young travelers with a points program that is ideal for jet-setters who want to see the world before they retire.
Just because you're a youngish credit user doesn't mean you can't have amazing credit! If you've done everything right thus far such as paying your loans on time, earn a good income, and love to travel, you might consider venturing into a reward credit card program that showers you with travel benefits like the Chase Sapphire card.
Big spend equals big bonus. How does 60000 bonus points sound? You'll have to spend $4000 in the first 3 months, though, so only dive in if you can handle the payback.
Double up on travel and dining. You'll earn 2X points per $1 on dining at restaurants and 2X points per $1 on travel. You also get 1X point spent on all other purchases.
Lots of redemption options. There are so many options for redemption, from booking travel directly to transferring points to partners (which is great if you are also part of a loyalty program like Southwest or Hyatt). Bonus: If you go through the Chase Ultimate Rewards portal, you'll get 25% more value.
Great at home or abroad. If you do a lot of traveling outside of the US, this card is ideal because there are no foreign transaction fees.
Flexibility. Even though points systems can seem complex at first, the Chase Sapphire is one of the more flexible programs.
Think ahead to make it work—research pays (literally)
An annual fee starting in year two. OK, you will have to cough up $95 annually to use this card, but the good news is that it's waived for the first year. Strategic users can out-earn that fee many times over.
It takes some work. Unlike cashback cards, points values fluctuate depending on how and where you redeem them. Be prepared to do some research when you book travel to score the best deals. If you're a frequent traveler with strong credit, this is a great starter card into the world of travel points and miles. Stay disciplined and you'll be flying and staying free before you know it.
Pair your spending style with the biggest benefit bang
No two credit users are identical so you'll have to do some soul searching to choose from among our picks. Some questions to ask yourself include:
What's my credit like? The first three cards on our list are more open to less seasoned users, whereas the last two are for those who have proven their credit responsibility.
What types of purchases do I make? If you pull out your card for a variety of purchases, a general cashback card is ideal. However, if you want to get rewarded where you shop most or change things up depending on current offers, consider a rewards credit card with different earnings levels or rotating categories.
Do I like to travel? If you're always hopping on a plane for work or leisure, a travel card would be perfect to help you could rack up points quickly so you could use them to your advantage.
The common denominator with all of these cards is that they are not designed for carrying balances. All the APRs are on the high side, and paying interest will quickly erase what you'll earn on the rewards side. Choose wisely, and happy swiping! If you are a responsible young professional who uses credit wisely, at least one of the cards on this list should be a smart fit for you.