According to a recent study, the majority of Americans obtained their first credit card when they were still teenagers. About 55 percent of people got them sometime between the ages of 18 and 20.
If you’re a teen looking for your first credit card at the moment, there are plenty of credit cards for teens out there that you can apply for. But it might not always be easy for you to get one since you probably don’t have a credit score yet.
You also need to be very careful about which credit card you choose. Credit card debt is not something that you want to have to deal with as you prepare to either go away to college or get your first job after high school.
Here are five of the best credit cards for teens today.
1. Secured Credit Cards
As we mentioned earlier, it can be difficult for those who are applying for a credit card for the first time to qualify for one. Those without credit cards often have no credit score, which can make it tough for lenders to determine the risk associated with extending credit to them.
Teens, in particular, are always seen as risky options to lenders. Many teens don’t have any experience when it comes to using credit, and as a result, they’re known to rack up more debt than they’re able to pay back.
If you find that most lenders aren’t willing to take a chance on you, the best credit card for you might be one of the many secured credit cards that are available. It’s much easier for teens to qualify for these types of credit cards.
Secured credit cards require those who apply for them to put down a security deposit before they can begin using them. But once they do, they’ll be able to use their secured credit card like any other credit card.
Secured credit cards for teens are excellent for people who want to build up their credit score over time. It’ll put them in a better position to qualify for things like auto loans and the best personal loans later.
2. Unsecured Credit Cards
Secured credit cards have become the go-to credit cards for teens in recent years. But when you’re first applying for a credit card, it’s not the worst idea in the world to try to get your hands on an unsecured card.
With an unsecured credit card, you won’t have to put down a security deposit before you start using it. This will be great for those who can’t afford to throw down $500 on a whim.
You also won’t have to worry about dealing with a low credit limit. Many unsecured credit cards come with higher limits that come make them more worth your while.
Just be careful about how you use an unsecured credit card if you’re lucky enough to obtain one. If you aren’t responsible with it, it could ruin your credit score from the start and force you to fight an uphill battle when trying to improve it in the future.
3. Cash Back Credit Cards
Most teens don’t make a ton of money. They’re either enrolled in college classes and spending most of their time doing homework—or trying to figure out what they want to do with their lives as far as their professional ambitions are concerned.
In this regard, cash back credit cards might be a great option for teens looking for credit cards. They allow them to make money when they use their credit card in a responsible way every month.
Most cash back credit cards offer 1 percent cash back on most purchases. But there are some cards that offer anywhere from 2 to 5 percent on things like gas and groceries. You can also bump your cash back percentage up when you buy things through certain online shopping sites or through your credit card company’s shopping portal.
You shouldn’t fall into the trap of using your cash back credit card to pay for everything just to get cash back. But this type of card can help you cut the costs associated with things like gas and groceries when you use it right.
4. Rewards Credit Cards
In addition to offering cash back credit cards, many credit card companies also offer rewards credit cards. These credit cards for teens work in much the same way that cash back ones do.
Every time you make a purchase with a rewards credit card, you’ll earn a certain number of points. Those points can be redeemed later for flights, hotel stays, and more.
Again, you shouldn’t use a rewards credit card all the time just to accumulate points. But if you have regular expenses like gas, groceries, utilities, and more that you can pay for with your card, you should consider doing it. It’ll help you reap rewards without racking up too much credit card debt.
5. Student Rewards Credit Cards
There are about 20 million Americans who attend college every year. If you’re going to be one of them, student rewards credit cards for teens might be right for you.
These credit cards are similar to regular cash back or rewards credit cards. But they offer an extra bump when awarding cash back or rewards points to students.
They’re ideal for those who are going to be using credit cards to buy school supplies, books, and other college essentials.
Which of These Credit Cards for Teens Would Be Right for You?
The average American is walking around with almost $6,000 worth of credit card debt. You should avoid accumulating that kind of debt with your first credit card if you’re a teenager.
You should also look for the right credit cards for teens for your specific circumstances. Find out which ones you’ll qualify for and pick the one that extends the best interest rate and the best perks to go along with it.
Want to learn more about credit cards and how to use them responsibly? Go read some of the articles on our blog about them now.