Starting your career and wanting to build your credit? Credit cards designed for young professionals can help. Probably you just landed your first “real” job after college.
Getting ready to start your career and your financial independence. Finding yourself a credit card is a major milestone. But how do you choose with literally thousands of options out there?
Arm yourself with education before applying for your first card. Understanding the pros, cons and fine print sets you up for credit success.
The right card offers rewards, tools to manage your spending, and even helps establish your credit if you use it responsibly. This blog post compares the top credit card options for young professionals and provides tips to choose the best match for your lifestyle.
Why Do Young Professionals Need Credit Cards?
Credit cards serves many helpful functions beyond just payments for young professionals including:
- Build your credit score: Using a card responsibly and paying on time demonstrates creditworthiness.
- Earn rewards: Most cards offer cash back, points or miles that add up quickly.
- Fraud protections: Credit cards provide $0 liability guarantees against fraudulent charges. Debit cards lack the same level of protection.
- Rental coverage: Book travel like hotels or cars with stronger insurance coverage.
- Flexible payments: Have the option to carry a balance and pay overtime rather than full payment upfront. But make sure to avoid interest charges which accrue quickly!
Credit Cards Types for Young Professionals
Let’s review the main categories of cards.
- Regular Credit Cards
This broad term encompasses cards that handle general, everyday purchases. They may offer flat-rate cash back or bonus category rewards.
- Student Credit Cards
Student cards help beginners build credit. They tend to have lower credit limits and fewer perks. Discover and Bank of America offer student options.
- Secured Credit Cards
These cards require an upfront security deposit that becomes your credit limit. They help establish credit history for those just starting out or rebuilding credit. Secured Card is a top pick.
- Travel Rewards Cards
These cards earn points or miles on travel spending that transfer or redeem for hotel stays, flights and more.
- Business Credit Cards
Business cards offer rewards tailored to entrepreneurs. However, avoid business cards until you have personal credit history established.
- Retail Credit Cards
Store cards like Amazon, Target or gas stations provide discounts and financing on brand purchases. But their high APRs make them risky to carry balances on.
Now that you know the main types of cards, let’s explore top options for young professionals and how to select the best match.
Best Starter Card to Build Credit as a Young Professional
When you’re just beginning, a secured credit card can help establish your credit history.
Secured cards require an upfront security deposit that usually becomes your credit limit. They generally don’t charge an annual fee and some even earn rewards.
It tops rankings with no annual fee, cash back rewards, and tools to develop good credit.
Cardholders can activate monthly FICO credit score tracking and receive alerts for key changes. Managing your account responsibly for seven months also earns you an automatic security deposit refund.
If you’re focused on building credit, the Discover it Secured Card offers a clear path to creditworthiness.
How Secured Cards Work
Here’s how the process works:
- You apply and get approved for a secured card.
- The bank requires an upfront security deposit, say $200. This becomes your credit limit.
- You activate the card and begin using it for purchases under the $200 limit.
- You pay your monthly balances on time and demonstrate responsible usage.
- After about 7 months of on-time payments, Discover refunds your security deposit. You graduate to an unsecured line of credit.
The security deposit helps those with no existing credit or damaged credit qualify for an account. It allows you to demonstrate creditworthiness before “graduating” to unsecured credit.
Just make sure to not charge more than your limit and always pay on time. Doing so proves you can handle credit and builds your payment history.
Many providers refund your security deposit within as little as 7 months for responsible cardholders. This allows you to graduate up to unsecured cards with higher limits and better rewards.
So while handing over an upfront deposit stings, it paves the faster route to prime credit cards long-term.
Best Flat-Rate Cash Back Card
The Wells Fargo Active Cash® Card makes earning 2% cash rewards simple with no categories to track. Just use it for everyday, anywhere spending and the rewards automatically add up.
Enjoy these card features with no annual fee:
- 2% cash rewards on purchases
- $200 cash rewards bonus after spending $1,000 in the first 3 months
- 0% intro APR for 15 months from account opening on purchases and qualifying balance transfers
- Cell phone protection
For an effortless flat-rate cash back option, check out the Wells Fargo Active Cash Card.
Maximizing Cash Back
The Wells Fargo Active Cash Card makes earning rewards straightforward with an unlimited 2% back on all purchases. But you’ll want to implement strategies to maximize rewards:
Pay Your Balance Off Each Month
Avoid negating rewards with interest charges! Pledge to pay your statement balance in full and on time each month. Set payment reminders if needed.
Use for Everyday Reoccurring Expenses
Use your card versus debit or cash for essential expenses you already pay like gas, groceries, subscriptions or commuting costs. This way you earn 2% back on necessities you buy either way.
Shop Online Through Portals
Dollars stack up faster when you access bonus cash back shopping portals before clicking to major retailers like Amazon or Best Buy.
Save Rewards to Meet Money Milestones
Let your rewards add up over time and withdraw to hit goals like covering a vacation, student loan payment or rent check.
Pay Down High Interest Debt
If you have existing credit card balances charging over 2% interest, use your cash rewards to pay them down faster. Eliminating debt saves money on interest charges.
Decline offers to redeem your rewards as statement credits in favor of bigger goals. The key is spending mindfully on needs, paying on time, and maximizing bonus opportunities.
Best Card for Dining Rewards
Young professionals often spend considerably on dining out and happy hours with colleagues.
Maximize rewards for these expenses with the Capital One SavorOne Cash Rewards Credit Card. Cardholders earn an unlimited 3% cash back on dining, entertainment, popular streaming services, and at grocery stores. All other purchases earn 1% back.
Additional card details:
- Earn 8% cash back on tickets purchased through Vivid Seats
- $200 cash back bonus after spending $500 in the first 3 months
- 0% intro APR for 15 months from account opening
- No annual fee and no foreign transaction fees
The Capital One SavorOne Card dishes up strong rewards for nightlife expenditures that come with the young professional lifestyle.
Maximizing Dining Rewards
Dining out drives many spending decisions for young professionals. After all, networking over coffee, lunches and happy hours often leads to career connections and job opportunities.
Boost your budget for business meals and nights out with friends with the Capital One SavourOne Card’s unlimited 3% cash back.
Keep topping off your rewards by:
Using Mobile Payments
Tap to pay with your phone or enabled watch to earn the card’s highest rewards rate. Fritter away points on late night pizza orders after bar hopping!
Activating High-Value Promotions
Capital One runs quarterly bonus category promotions like 5% back on hotels. These temporary offers add up across expenses you already have.
Shopping Gift Cards at Wholesale
Doubling down on rewards rates makes gift card reselling sites like CardCash smart stops. Shop gift cards for your go-to gastropub at a discount first before paying with your card.
Driving Diner Loyalty Programs
Frequent your favorite local eateries more by joining loyalty programs. Earning a free appetizer or dessert on top of 3% cash back is total chef’s kiss material.
Dining out fuels networking, social connections and convenience for young career climbers. Let the SavorOne Card keep your restaurant budget and rewards balance well fed all year long!
Best Travel Card for Young Professionals
Early on in your career, you may not travel for work as frequently as more seasoned colleagues. But having a top-notch travel rewards credit card can still pay dividends.
The Chase Sapphire Preferred® Card is a premier travel card with outstanding rewards redemption. Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®.
Primary perks include:
- Earn 60,000 bonus points after spending $4,000 on purchases in the first 3 months
- 5x points on all travel purchased through Chase Ultimate Rewards
- 3x points on dining, select streaming services, and online groceries
- $50 annual hotel credit
- Primary car rental insurance coverage
- No foreign transaction fees
Even if you only take one big trip annually, the Sapphire Preferred Card accelerates rewards with categories young professionals frequently spend in.
Strategic Points Redemption
Travel cards offer fantastic flexibility redeeming points for upcoming adventures. But to extract maximum value takes a savvy approach.
Let’s compare the main ways to use earned points or miles:
Cash Back
Taking rewards as cash back or statement credits typically returns 1 cent or less per point. This should be seen as an absolute last resort if you have no upcoming travel.
Pay with Points for Travel
Booking flights, hotels, vacation rentals or cruises through your credit card travel portal allows you to “pay with points” at an increased redemption rate. Points stretch much further this route (think 1.25 cents each or more).
Transfer to Travel Partners
Transferring points to loyalty airline and hotel partners can unlock premium cabin upgrades and luxury hotel stays that may be impossible to afford otherwise. This offers outsized value but requires advanced planning and knowledge.
Check reward charts to crunch numbers. Transferring points to book a $3,000 business class flight to Europe for 90,000 miles beats paying cash outright. Casually redeeming points for Amazon gift cards in comparison leaves tremendous value unclaimed.
Travel hacking unlock exceptional experiences at uncanny value. But it demands understanding best uses for points and a little strategizing. Plan your next big trip and study transfer partner sweet spots rather than settling for mediocre generic cash back redemptions.
Tips for Choosing the Best Credit Card
Finding the right credit card involves more than just comparing rewards rates. Make sure to analyze annual fees, introductory APR offers, and tools for money management.
Here are key questions to ask when vetting credit cards as a young professional:
- Does the card offer a healthy sign-up bonus you can realistically earn?
- Will you frequently spend in the card’s bonus categories?
- Does the company offer free credit score monitoring?
- Can you pay your balance in full each month?
- Are there useful app features to track spending?
Call issuer customer service lines to ask questions too.
Conclusion on Credit Cards for Young Professionals
Finding the right credit card delivers benefits now and investments for the long-term during an exciting career launch. Prioritize cards that match your lifestyle spending. Compare bonus categories against frequent expenses like dining, commuting, and travel.
Building credit history also remains important early on. Opt for issuer tools that enable free credit score access and alerts whenever changes occur.
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