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Young people have been hesitant to sign up for credit cards; a 2016 survey revealed only 33% of adults between the ages of 18 and 29 had a card. But the tide is turning for millennials, based on Experian's new Credit Outlook for Millennials and Generation Z report.
Millennials (defined as adults 22 to 35) accounted for 20% of all new credit card originations—excluding retail cards—in the fourth quarter of 2017. Millennials are also taking on more credit card debt: their credit card balances grew 28% since 2011.
When it comes to choosing a credit card, there is no one perfect credit card for any age group: millennials should pay attention to their specific needs and credit backgrounds. We have highlighted a few different credit cards to suit different user profiles. Find the best one for you. Note that all interest rates and details are current as of the publication date.
Wells Fargo Propel American Express® card
Best for: Millennials who travel and eat out a lot but don't want to pay an annual fee
This new card is ideal for younger users who spend a lot of money on dining, travel, and streaming services like Netflix and Spotify: You'll earn 3 points per $1 spent on all of those transactions. All other purchases earn 1 point per $1 spent, and points (worth one cent each) can be redeemed for cash back, travel, gift cards and more.
These rewards are generous considering there's no annual fee on the card. You'll also earn 20,000 bonus points after spending $1,000 in purchases on the card in the first 3 months.
Chase Sapphire Preferred® Card
Best for: Millennials who travel and eat out a lot and can afford an annual fee
If you are willing to pay an annual fee, the Chase Sapphire Preferred® Card is one to consider. Cardholders earn 2 points per $1 spent on travel and dining purchases and 1 point per $1 spent on everything else.
You also have the chance to earn a hefty 60,000 point bonus by spending $4,000 on purchases on the card in the first 3 months. Chase points are worth one cent each for cash back, but they are worth 25% more if you redeem them for travel through Chase's Ultimate Rewards portal.
For example, 60,000 points are worth $750 in travel. There's also no foreign transaction fee on the card, so it's the one you want in your wallet when traveling abroad.
Chase Sapphire Reserve®
Best for: Millennials who travel and dine out a lot and want an elite credit card
If you have excellent credit and want a luxury credit card in your wallet, Chase Sapphire Reserve® is a smart upgrade from its Chase Sapphire Preferred® Card. You'll earn 3 points per $1 spent on travel and dining, and 1 point per $1 spent on everything else. You also have the chance to earn a hefty 50,000 point bonus by spending $4,000 on purchases on the card in the first 3 months.
But this card also comes with a host of other benefits, including impressive trip cancellation and delay insurance, auto rental collision damage waiver, lost luggage reimbursement, Priority Pass complimentary airport lounge access, special car rental privileges, and more.
And if the fee seems steep, note that you get a $300 annual credit toward any travel purchases, and up to $100 toward a Global Entry or TSA PreCheck fee credit. Points are worth 50% more if you redeem them for travel through Chase's Ultimate Rewards portal. (So 50,000 points are worth $750 in travel.)
American Express Cash Magnet® Card
Best for: Millennials who want to earn cash back and use an innovative new way to pay
This new card features "Pay It Plan It," an innovative feature from AmEx that makes paying off your cards easier. The tool lets users pay off smaller purchases immediately and, for a fixed fee, break up larger purchases into installments you can pay off over time.
If you're likely to carry a balance, this process could save you money instead of paying interest. You'll also earn 1.5% cash back on all purchases, plus the chance to earn a $150 statement credit after spending $1,000 on the card within the first 3 months.
Amazon Rewards Visa Signature Cards
Best for: Millennials who spend a lot of money at Amazon and Whole Foods
Amazon has partnered with Chase to offer two credit cards that offer generous rewards if you spend a lot of money at Amazon and Whole Foods. If you are an Amazon Prime member, you'll get the Prime version of the card, which gives 5% back on Amazon and Whole Food purchases.
If you don't have Prime, you'll earn 3% back on Amazon and Whole Food purchases. Both cards offer 2% back at restaurants, gas stations and drugstores, and 1% back on everything else. You can redeem your rewards for Amazon purchases, or through Chase for cash back, gift cards or travel.
Discover it® Secured
Best for: Millennials who don't have a strong credit history and need help building it up
If you are trying to improve your credit scores and build up a strong credit history, a secured credit card might be the way to go. Such cards require you to pay a refundable deposit which serves as collateral and acts as the amount of your credit line.
With Discover's secured card, you also earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and unlimited 1% cash back on all other purchases. You will also earn a dollar-for-dollar match on all the cash back you earn at the end of your first year. After 8 months, Discover will review your account to determine if you can transition to an unsecured line of credit.
The information related to the Amazon Rewards Visa Signature credit cards has been collected by Experian and has not been reviewed or provided by the issuer of the card.