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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.
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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.
1. Capital One® QuicksilverOne® Cash Rewards Credit Card
Best for: Millennials who want cash rewards but don't have the best credit
APR: 24.99% variable APR
Annual Fee: $39
Rewards credit cards are often reserved for those with excellent credit. If you're still improving your credit scores but want to start earning some cash back on your purchases, this card is a good option, thanks to its relatively low annual fee.
You'll earn 1.5% unlimited cash back on every single purchase, and as long as you're paying off your card every month, you can help your credit scores and not worry about racking up interest charges. Note: This card only makes sense if you plan on spending at least $2,600 a year, or about $217 a month, in order to break even with the annual fee.
2. Citi® Double Cash Card
Best for: Millennials who want cash rewards and have good credit
APR: 25.74% variable (Updated on 12/21/18.)
Annual Fee: None
This offer has expired.
The Double Cash Card is one of the best flat-rate cash back cards around. You earn 1% cash back on every single purchase when you make it, and another 1% back after you pay it off. That's a great incentive to pay your card off every month, and you never have to worry about rotating categories or figuring out which card to use when.
See the best credit cards for you now in Experian CreditMatch™.
3. 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
APR: 14.24% to 26.74% variable
Annual Fee: None
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 30,000 bonus points after spending $3,000 in purchases on the card in the first three months.
4. Chase Sapphire Preferred® Card
Best for: Millennials who travel and eat out a lot and can afford an annual fee
APR: 17.74% to 24.74% variable
Annual Fee: $95, waived the first year
If you are willing to pay an annual fee (waived the first year you have the card), 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 50,000 point bonus by spending $4,000 on purchases on the card in the first three 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, 50,000 points are worth $625 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.
See the best credit cards for you now in Experian CreditMatch™.
5. Chase Sapphire Reserve Card
Best for: Millennials who travel and dine out a lot and want an elite credit card
APR: 17.74% to 24.74% variable
Annual Fee: $450
If you have excellent credit and want a luxury credit card in your wallet, Chase's Sapphire Reserve is a smart upgrade from its 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 three 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.)
6. American Express Cash MagnetTM Card
Best for: Millennials who want to earn cash back and use an innovative new way to pay
APR: 14.74% to 25.74% variable
Annual Fee: None
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 small 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 three months, and another $100 statement credit after spending $6,500 in total purchases during your first year.
See the best credit cards for you now in Experian CreditMatch™.
7. Amazon Rewards Visa Signature Cards
Best for: Millennials who spend a lot of money at Amazon and Whole Foods
APR: 15.99% to 23.99% variable, depending on your creditworthiness
Annual Fee: None
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.
8. Discover it® Secured
Best for: Millennials who don't have a strong credit history and need help building it up
APR: 25.24% variable
Annual Fee: None
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 Chase Sapphire Reserve® credit card has been collected by Experian and has not been reviewed or provided by the issuer of the card.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on August 6, 2018, and has been updated.