Best Credit Cards for Millennials

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Last updated: 01/27/2023
Best Credit Cards for Millennials

How to Get a Credit Card with No Credit

As we’ve already mentioned, millennials are in their 20’s and 30’s. That means they’re still young but are entering or establishing themselves in the work force. They’re starting to earn money with a new career. That means many millennials don’t have much or any established credit when applying for their first credit card. The question then becomes, how can a millennial get a credit card if they have little work experience and credit?

For starters, many millennials went to college (just over 40%). That means many will be paying off student loans. If they make their loan payments on time each month, they’re building their credit score. Many people don’t realize that their student loans are improving their ability to get a credit card because they’re establishing credit. 

However, not everyone goes to college and some college students have scholarship and family helping them pay for their education. How do these millennials apply for a credit card with no credit? There are several credit card options they can start with to establish credit. Retail stores such as Best Buy, Walmart and Target offer credit cards which are easier to be accepted. Having a retail credit card is a great way to control where you use a credit card while still building your credit.

There are also credit cards that have high approval odds even for people with poor and no credit. This is another option for millennials looking for their first credit card. These credit cards tend to have a higher interest rate, however, if you pay off your loan quickly, this shouldn’t be a concern. Paying off your loan quickly will help grow your credit score.

Millennials Should Consider Credit Cards with Rewards

Many credit cards offer rewards that benefit the user. This is something that millennials should consider when choosing a credit card. Some credit cards even offer benefits with airlines based on the card’s usage.

That being said, these rewards tempt people to use their credit card more often. This causes the user to develop larger debt. As mentioned above, millennials are young and in the beginning stages of their career. Accruing debt now could be detrimental to growth.

While we encourage millennials to find credit cards with rewards, that doesn’t mean they should try to obtain those benefits quickly. It’s just an added perk to using your credit card responsibly. 

Beware When Using a Credit Card

It sounds like there’s no risk when getting a credit card as a millennial. However, there are many ways a credit card can hurt your credit score and your life. Below, we’ll go over a few different things you need to watch for as a millennial with a credit card.

Don’t Accrue Too Much Debt

The most obvious problem is that you can accrue a lot of debt when using a credit card. Getting something now and paying for it later can be intoxicating and cause you to forget how much you’ve spent. This can be a huge problem. 

Many millennials will consider credit cards with high interest rates because that’s their only option with little to no credit. If high debt is accrued and it can’t all be paid, it’ll accrue heavy interest next month. This problem can compound itself over time and cause you to pay more money than what the original purchase is worth. 

Don’t Open Up Too Many Credit Cards

Another problem many people have with credit cards is opening too many. When you constantly hit your credit limit, that doesn’t mean you need to open another one. You should spend less because you don’t want to have too many loans out – it hurts your ability to take out major loans like a mortgage or car loan.

Also, part of determining your credit score is your credit limit. When you have many lines of credit where you’re have debt, your credit score starts to decrease.

Consider Interest Rates and Annual Fees

While you don’t have much control over your interest rates when you have little to no credit, you should still shop around to find the best option. When you have a high interest, you’ll start compounding debt if you can’t pay all your credit cards bills in one month.

Also, some credit cards have an annual fee attached to them. This is especially true for cards given to people with poor or no credit. You can shop around to try and find a credit card that doesn’t have an annual fee.

What Credit Cards Are Best for Millennials

Now’s the time to determine what’s the best credit card for millennials. While there are many options available, we found a few that you can consider. They’re specifically made for first time/newer credit card holders. 

Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card is an interesting credit card to start out with. To start out, there’s a $95 annual fee. However, if you’re willing to pay an annual fee, there are many benefits to choosing the Chase Sapphire Preferred card.

For instance, earn 1 chase point for every dollar spent and 2 points for every dollar spent on travel.  Points are worth 1 cent each while they’re worth 25% more when used towards travel. If traveling is something you like to do, then this is the credit card for you.

American Express Cash Magnet

Having an annual fee might scare you away from the Chase Sapphire Preferred card. That’s where the American Express Cash Magnet comes in. The American Express Cash Magnet card has no annual fee, so you don’t have to pay to just have the credit card.

The benefit of the AMEX Cash Magnet card is that you can break up purchases to make it easier to pay your bills. While small purchases can be paid for immediately, large purchase can be broken up into smaller installments. This is called the “Pay It, Plan It” plan.

Capital One QuicksilverOne Cash Rewards Credit Card

Capital One QuicksilverOne Cash Rewards Credit Card also has an annual fee but it’s much smaller than the Chase Sapphire Preferred card at $39. However, a rewards credit card as good as the Capital One QuicksilverOne is usually reserved for people with great credit.

The big benefit of the QuicksilverOne is that you receive 1.5% unlimited cash on every single purchase where you use your credit card. In fact, all you need to spend is $2,600 over the year to break even with the annual fee. Everything else is extra money given back.

Wells Fargo Propel AMEX

The Wells Fargo Propel AMEX is the perfect card for those who like to go out around town or travel. Much like the American Express Cash Magnet, you won’t have an annual fee either. 

What separates Wells Fargo Propel compared to the Chase Sapphire Preferred card?  The Wells Fargo Propel gives you 3 points for every $1 spent on dining, travel and streaming services. Other purchases still give you 1 point for every $1 spent. This card is also is a great option for millennials who like to travel.

Discover it Secured

Several of these credit cards might be difficult for young, 25-year-old millennials to obtain with their credit situation.  As great as these rewards may seem, if you don’t qualify for the credit card, you won’t benefit from it. Discover it Secured is a credit card made for millennials who want to build their credit score.

For starters, there’s no annual fee that you need to worry about with the Discover it Secured. However, you’ll have to pay a refundable deposit as collateral (secured credit cards are made to protect the bank in case you aren’t able to make your payments).

There’s also a small rewards program that helps users earn a little bit of cash back. You can earn up to 2% cash back on purchases up to $1,000. While it’s not as crazy as Capital One’s unlimited cash back, it’s still a little something you can earn while building up your credit score.

It's Beneficial for Millennials to Get a Credit Card

While there’s a lot to consider when getting a credit card as a millennial, there are many benefits to get one. Not only will it allow you to live your life normally without having to worry about paying for everything on the spot, but you can also improve your credit score. All you need to do is make sure you make your payments on time and pay your debts quickly.

How do you find the best credit card for millennials? Finance Guru wants to help you answer that question. Our credit card comparison tool will help you check out your options and find the best credit card for you. 
Finance Guru

Finance Guru