Best Credit Cards for Young Adults

Take a look at some of the best credit cards for young adults that are available on the market.

Updated: September 6, 2023

Regardless of whether you're a young adult or not, there's no denying the utility of owning a credit card — they've become so intertwined with so many of our daily lives, they're practically an essential financial tool at this point.

For young adults specifically, though, there are a huge amount of benefits to owning one of these cards — the convenience they provide, security, and the general opportunity to start building credit history, just to name a few examples.

Still, choosing the right credit card isn't a decision you want to rush as a young adult, as the card you ultimately decide on can make significant differences when it comes to proper finance management and setting yourself up for financial stability further down the line.

There's a decent amount to unpack here, so in this article, we'll be taking a look at some of the best credit cards for young adults that are available on the market.

1. Capital One Classic Credit Card★★★★★Click Here
2. Aqua Advance Card★★★★★Click Here
3. HSBC Student Credit Card★★★★Click Here
4. TSB Student Credit Card★★★★Click Here

As this may be the introduction to many students'/young adults' journey into the world of credit cards, we'll also be providing some additional context to help break down the importance of these cards and how they actually work.

Let's start things off with a brief explanation of what credit cards are.

What Is a Credit Card?

Though the majority of people, young and old, most likely have a basic understanding of what credit cards are already, it's definitely worth providing a more concrete explanation of them before we go any further.

In essence, a credit card is simply a financial tool that lets you make purchases on credit, meaning you have flexibility and convenience when it comes to managing your finances.

Now, whenever you're applying for one of these cards, a financial institution, normally a bank, is going to evaluate your creditworthiness based on a few different factors — your credit history, income, and something known as a debt-to-income ratio, for instance.

Once the bank has approved your application, they'll then assign you a credit limit, ultimately representing the total amount that you're able to borrow using the credit card.

From here, using a credit card is a pretty straightforward process, not dissimilar from a debit card if you've ever used one of those. Basically, whenever you buy something with your credit card, whether it's in a shop or online, the bank pays the merchant whatever you owe them on your behalf (rather than simply using the balance you've deposited into your debit card).

After this, you'll receive a statement each month that shows all the transactions that you made using the card during that particular billing cycle. We'll come onto this in more detail later, but the statement generally includes information like the date and location of each transaction, how much you spent, and the remaining amount of credit that you have.

Lastly, it's worth mentioning that a lot of these credit cards offer something called a grace/interest-free period, which is essentially a period of time — usually lasting between 21 and 25 days — where you're able to settle your credit card bill without incurring any kind of interest charges.

So, if you pay the full balance that you've spent that month before the grace period expires, it means you don't have to pay any interest, which is obviously important for students or young adults looking to avoid extra costs.

However, if you end up carrying a balance from one billing cycle to the next one, the bank's going to charge you interest on whatever the outstanding amount is, and this is known as the Annual Percentage Rate (or representative APR).

Regular Credit Cards VS. Credit Cards for Young Adults

So, why do we bother specifying credit cards for young adults rather than simply providing you with any other kind of credit card?

Well, there are actually a few different variables that go into this. Put simply, though, most young adults simply won't be able to qualify for the majority of cards that people with a more established credit report/history can.

Let's take a closer look at some of these reasons:

1. Eligibility Criteria

Generally speaking, standard credit cards typically come with far more stringent eligibility requirements, conditions like having a high credit score or a consistent income, for instance — something very uncommon among young adults.

As such, anyone who's just starting to build their credit now is incredibly unlikely to qualify for these cards since they'll have a pretty limited credit history.

On the other hand, a student credit card, for example, usually has far more lenient criteria when it comes to eligibility since the credit card issuers recognise that this demographic is obviously not going to have the same kind of credit rating.

Furthermore, many of the cards that are tailored for young professionals tend to take into account factors beyond their credit file, like their current educational status, student loan, or potential future income. As a result, it's a lot easier for these people to actually obtain their first credit card and start building their credit rating up.

2. Credit Limits

As you've probably noticed if you've shopped around for credit cards, they usually offer a credit limit that's in line with your creditworthiness. Just for a bit of context, anyone with a more established credit history and an overall clean record when it comes to using their credit responsibly is naturally going to receive a higher credit limit than those who don't.

Now, while this obviously means they're going to have greater spending power, it also means they're at a lot higher risk of overspending and accumulating a level of debt that becomes unmanageable without balance transfers or using a money transfer credit card.

To combat this, the cards that are targeted at young adults come with lower credit limits instead. The reasoning behind this is entirely understandable, given that this is many people's first credit card, so this is more of just a precautionary measure to help younger users avoid racking up a significant amount of debt before they've even finished university, for example.

Of course, this limits extravagant spending to a degree, but it's absolutely imperative in terms of the safety net it provides.

3. Rewards and Benefits

You may have seen credit cards, aside from advertising their interest rate, promote the fact that their cards come with a bunch of different rewards and benefits to encourage you to start banking with them — things such as cashback, travel rewards, or even purchase protections are some of the more common ones.

Still, these rewards typically target a much broader audience than honing in on one particular demographic, and the offerings they provide may not be of much use to certain people.

The flip side of this is when a credit card issuer provides rewards for using their card that are specifically tailored to a certain kind of person in order to match their lifestyle and preferences.

Young adults and students, for instance, are probably less concerned with receiving a discount for a family holiday than they are with rewards for, say, dining out or for popular subscription/streaming services.

Furthermore, some of these cards might even offer various kinds of incentives that encourage responsible credit behaviour — bonus rewards for paying your bills on time or generally just staying within the credit limit, for instance.

This way, the rewards are way more tailored to a younger audience's spending habits, which is something you wouldn't find with a regular credit card.

4. Educational Resources

Lastly, let's take a look at some of the common differences you might expect between these credit cards in terms of educational resources. For the regular kind of credit card, you'll typically find that they only offer some of the more basic financial education resources; they're never really a primary focus.

Presuming you've only obtained one of these cards due to your high credit rating, it's generally assumed by the card issuer that you've already got a good enough idea of how to manage your credit and don't need a litany of information in order to responsibly use the card.

On the other hand, young adults are rarely going to have that same level of insight, as it typically comes along with experience and general maturity. Because of this, you'd typically find a range of built-in financial education resources or tools as part of a student bank account, for instance.

This kind of thing might include budgeting apps that you can use, trackers to monitor your spending, and general educational materials on how to avoid paying interest and managing debt.

Naturally, the aim here is to empower any of the younger cardholders out there to start a credit journey that's backed by some rudimental financial knowledge.

How Do Credit Cards Work?

Now that we've covered some of the main features of a young adult/student credit card, let's break down how these cards actually work when you put them into practice.

Balance Due

From the minute you receive your credit card and make your first payment, the credit card company that issued your card keeps a record of your transactions and compiles them all into a statement that is then issued to you towards the end of the billing cycle — usually on a monthly basis.

This is fairly intuitive to understand, but the balance due essentially represents the total amount of all these transactions, serving as the final amount you have to repay to them.

It's not strictly the initial cost of your purchases, though, as it also includes things like the interest charged on any unpaid balances you might've carried over from the last month — applicable fees, like an annual fee or late payment fees, are also included on this list.

Since we're trying to avoid unexpected surprises or interest fees here, it's absolutely crucial to pay fairly close attention to what the balance due is whenever you're looking at your credit card statement.

Credit Utilisation

Aside from these fairly obvious reasons, though, paying off the full balance every month before it's actually due is generally a very effective way of keeping a healthy credit utilisation ratio, which is essentially the percentage of your credit limit that you are using at any given point.

Credit utilisation, along with a few other key factors, is one of the main variables that the banks take a look at when working out your credit score, so it's typically vital further down the line when you're trying to build and maintain a relatively positive credit score.

Generally speaking, when a financial intuition checks out your credit report and notices that you have quite high credit utilisation, it tends to signal that you're probably relying too much on credit and aren't particularly financially stable — which, in the eyes of the lender, is a huge concern.

Best Credit Cards for Young Adults — Reviews

So, now that we have an understanding of how these cards work let's explore some of the best credit cards that are currently available for young adults:

1. Capital One Classic Credit Card

Capital One Classic Credit Card

Capital One Classic Credit Card
Credit Limit
Minimum £200
Representative % APR (variable)
34.9% APR
  • For people with bad credit or building credit.
  • Credit limit £200 to £1,500.
  • Interest-free period up to 56 days on purchases each billing period for cleared balances.

Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Kicking things off, let's take a look at the Capital One Classic credit card, which is perfect for anyone who's already built up a bit of credit history.

While most of the cards we'll be looking at in these reviews don't typically require any credit history (which is ideal for students), this card is geared towards anyone who has prior experience with direct debits or an overdraft — think of people who have just finished university and don't have a full-time job yet, for instance.

The 34.9% representative APR is particularly high, but they offer a credit limit of up to £1,500, which is generally quite hard to come by amongst credit builder cards.

Still, unlike some of the other options on this list, there aren't any rewards available with the Capital One Classic credit card, so you might be better off with something else if you're looking for additional benefits.

2. Aqua Advance Card

Aqua Advance Card

Aqua Advance Card
Credit Limit
Minimum £250
Representative % APR (variable)
34.9% APR
  • No interest-free period, however, if you stay within your credit limit, you can reduce your interest rate by 5% annually for three years.
  • Credit limit £250 to subject to status.
  • No extra fees on what you spend abroad.

Representative Example – If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Again, this isn't specifically a student credit card, but for anyone who does choose to study overseas, this card would be a solid choice given its lack of foreign transaction fees and credit-building features.

Unlike the previous option, you don't need to have an established credit history to be eligible for the Aqua Advance Card, meaning you can actually start your credit journey here and move on to something with a lower representative APR in the future.

Speaking of which, they do, unfortunately, have an interest rate of 34.9% and an even higher rate of 44.9% on any cash withdrawals, so this does slightly offset the other benefits.

Even then, though, this card offers a fairly unique initiative that lets you reduce your interest rate annually for the next three years — so long as you stay within your credit limit and make payments on time, of course.

As far as credit limits go, you can receive up to £1,200 with this card, which is relatively decent, but there are still more generous offers out there.

3. HSBC Student Credit Card

HSBC Student Credit Card

HSBC Student Credit Card
Credit Limit
Up to £500
Representative % APR (variable)
18.9% APR
  • Interest-free period up to 56 days each billing period for cleared balances.
  • Credit limit up to £500 (subject to status).
  • No annual fee.

Representative Example – If you spend £500 at a purchase interest rate of 18.9% p.a. (variable) your representative APR will be 18.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

As the other two options were more for young professionals/graduates, let's take a look at a card that's suited to students: the HSBC Student Credit Card.

While the credit limit is fairly modest on this card, offering only £500, this is not uncommon among student credit cards as a whole — especially when you consider that you don't need an established credit history to be eligible.

Understandably so, any card that requires a specific credit rating, like the Capital One Classic credit card, is going to offer a higher credit limit since you can theoretically be trusted with larger amounts of money.

Aside from this, though, what really sets the HSBC Student credit card apart is the 18.9% representative APR they charge, which is significantly lower than the two previous options we've reviewed so far.

In addition, they also provide a range of rewards and cashback offers that are geared towards students — not to mention everything being accessible in a convenient mobile banking app.

4. TSB Student Credit Card

TSB Student Credit Card

TSB Student Credit Card
Credit Limit
Minimum £500
Representative % APR (variable)
21.9% APR
  • Interest-free period up to 56 days on purchases each billing period for cleared balances.
  • Credit limit £500 to £1,000 (subject to status).
  • No annual account fees.

Representative Example – If you spend £1,000 at a purchase interest rate of 21.95% p.a. (variable) your representative APR will be 21.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.

Lastly, let's finish with the TSB Student Credit Card, which, like the previous option, targets students specifically. Similarly to the HSBC Student Credit Card, this card has much lower representative APR rates, at 21.9%, given that it's a credit builder card and can be obtained with poor or even no credit history at all.

Still, although the interest rates are slightly higher than the previous card, it combats this by offering a minimum credit limit of £500, extending to £1,000, which is fairly significant given that you don't need an exceptional credit rating to use the card.

Like a few of the other cards on this list, though, you will need to have a current account with TSB in order to qualify for this card, but that shouldn't be particularly difficult to obtain. And once you have it, you'll be able to add the card to your digital wallet of choice so you can make payments without even needing to carry the card around with you.

You don't receive any rewards with the TSB Student Credit Card, so if this is a dealbreaker for you, you're probably better off with the HSBC Student Credit Card we covered earlier.

How to Choose Credit Cards for Young Adults

Check Your Credit Score

Unless you're choosing a card that explicitly mentions there are no requirements, your credit score is going to play a crucial role in determining the type of credit card you can actually qualify for.

While most credit cards for young adults have fairly lenient eligibility criteria, having a higher credit score generally opens the door to more options with higher credit limits.

Remember, you can access a free credit report annually through the Consumer Credit Act if you're unsure what your rating is.

Read the Fine Print

As a general rule of thumb, never skip the fine print when you apply for a credit card. Whether it's the grace period, late fees, or any penalty APRs, having a firm understanding of some of these details generally helps you use your card more responsibly.

Final Thoughts

To wrap things up, whether you're trying to get started on your credit journey as a student or you're simply looking to improve your credit rating as a young professional, there's a litany of benefits to owning a credit card.

Still, and this is especially true for students aged 18-21, with credit comes the potential for debt, and this is something you seriously want to avoid at such a young age.

While it's unlikely that you'll go over your credit limit with these cards, remember that your overdraft is a limit, not a target. If you feel like the responsibility of debt is too much stress to handle, you may be better off with a debit card instead.

Related Guides:

Best Credit Cards for Young Adults: FAQs

Are There Any Age Restrictions for Young Adults Applying for Credit Cards?

What Should I Do If I Can't Make a Credit Card Payment as a Young Adult?

What Is APR?

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About HSBC Bank HSBC is a British banking and financial services company. It is the largest bank in Europe and the seventh largest bank in the world. The bank originated in Hong Kong...
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