If your 18-year-old is ready for their first credit card, it’s a prime opportunity to introduce them to financial responsibility. Opening a starter credit card and discussing good habits can set them up for long-term success with credit management. Here, we’ll look at the best starter credit cards and discuss why adding your child as an authorized user may be beneficial. This guide is crafted to help you and your teen make an informed decision when selecting that first credit card.
Why Start Early with Credit Cards?
Starting with a credit card at 18 can offer long-term benefits, especially when it comes to building a solid credit history. Here are a few reasons why early exposure to credit can be advantageous: building credit history, developing financial skills, and future financial access. For many parents, adding a teen as an authorized user or helping them open a student or secured credit card is a good first step.
Best Credit Cards for an 18-Year-Old
There are several credit cards well-suited for young adults, each offering a unique set of benefits to meet specific needs. Below are some top options for 18-year-olds:
Capital One Savor Student Cash Rewards Credit Card – Best for Common Bonus Categories
This card has a $0 annual fee and offers 8% cash back on Capital One Entertainment purchases, 5% on hotels and car rentals through Capital One Travel, 3% cash back on groceries, dining, entertainment, and select streaming services, and 1% on other purchases. It’s designed for students and transitions to the Capital One Savor Cash Rewards card after graduation.
Capital One Savor Cash Rewards Credit Card – Best for Budding Foodies
This card also has a $0 annual fee with rewards similar to the student version, but with a higher welcome bonus. It’s ideal for young adults passionate about dining and entertainment and can be a continuation option for students outgrowing the student card.
Chase Freedom Unlimited® – Best for Flat-Rate Cash Back
This card offers a $0 annual fee and 5% cash back on travel booked through Chase Travel, 3% on dining and drugstores, and 1.5% on all other purchases. Rewards can later be converted to Chase Ultimate Rewards points, providing more flexible redemption options.
Discover it® Cash Back – Best for Rotating Cash-Back Categories
This $0 annual fee card offers 5% on rotating categories up to $1,500 per quarter and 1% on other purchases. Discover matches all cash back earned in the first year, doubling rewards and providing significant savings for new cardholders.
OpenSky® Secured Visa® Credit Card – Best for Credit Building
The OpenSky card has a $35 annual fee and earns up to 10% cash back at participating retailers. No credit check is required, making it ideal for those with no credit or limited history. It’s designed to build credit with a refundable security deposit.
Adding Your Teen as an Authorized User
Adding your child as an authorized user on your credit card account can provide immediate credit history benefits. This option helps them build credit, offers credit experience under parental guidance, and any rewards earned by your child’s purchases go directly to your account as the primary cardholder. Set guidelines for card use to avoid overspending. Some issuers allow authorized users as young as 13, making this option available even before your child turns 18.
Factors to Consider When Choosing a First Card
Not all starter credit cards are equal. Consider annual fees and look for no-fee cards that your teen can keep long-term. Choose cards that report to major credit bureaus to help establish a good credit record. Look for rewards that align with your teen’s spending habits, such as dining or entertainment for students.
Understanding the Credit CARD Act of 2009
The Credit CARD Act of 2009 introduced safeguards to protect young adults from taking on debt they cannot afford. Those under 21 need proof of independent income or a co-signer to qualify for a card. Colleges can no longer offer sign-up incentives without explaining credit terms. These changes make it essential for 18-year-olds to consider student or secured cards, which typically have fewer restrictions for applicants.
Tips for Responsible Card Use
Using a credit card wisely is the key to building good credit and avoiding debt. Encourage your teen to pay on time, as late payments can hurt credit scores. Consider setting up autopay for at least the minimum payment. Aim to use no more than 30% of the card’s credit limit to maintain a good credit utilization ratio, and regularly check statements to identify any unauthorized charges or overspending.
Final Thoughts
Starting with a credit card at 18 is an important step toward financial independence and responsibility. Whether you add your child as an authorized user or help them open their own account, the journey of building good credit habits begins with choosing the right card. For young adults, selecting a no-fee card and understanding how to manage it responsibly sets them on a path to financial security. As they grow into more advanced credit options, their established credit history will make qualifying for top-tier cards and loans easier in the future.
