credit card is without a doubt a massive step forward in your adulting journey. Without a doubt, almost every adult needs a credit card–but how does a person discern exactly when they need to bring one into their lives? What are the markers and signs that a person is ready for such a responsibility, especially since racking up debt and falling behind on payments is so easy in today’s economy?
Well, allow me to shed some illumination on this matter.
First, Reasons to Get a Credit Card as a Young Professional
For one, there are some things you simply cannot purchase without the help of the credit card. For example, online purchases, like the ones you make through sites like Amazon. Also, travel ticket purchases (be it plane, train, or auto). Even bigger purchases like bills tend to be made through credit cards, as they are easier to immediately take care of and then pay off that way.
At the end of the day, a credit card is a net of safety for a young professional. Sure, it’s easy to rack up too much debt if you live beyond your means or have questionable spending habits, but a credit promises freedom: the freedom to make the purchases you need at the time you need them to be made, with the ability to pay them back later. Accrue good credit by not going over your limit and making payments on time, and you should be able to buy a decent apartment, house, or even car.
Here are a few purchases that you should arguably ALWAYS make through the use of a credit card. (Also Note: If you are looking into moving/studying abroad, a credit card can help you with that, as you will not have to go through the process of first exchanging currencies).
(Note: credit cards have measures in place so that, in the event they are stolen, there are ways to ensure that your money does not get taken along with them. Cash, on the other hand, has no real security to it: if your paper money is stolen, it’s stolen.)
What’s good in a Credit Card
When will I need a credit Card?
The vast majority of purchases will be “credit only.” While cash should always be on hand in case of emergencies, credit is also a good asset to have in your arsenal in case you ever find yourself in a situation in which you need to buy yourself a night in a hotel, pay for car damage, or for a hospital visit. You never know what’s coming your way until it’s already here, so it’s a good idea to be prepared to lose a bit of money on some unforeseen event in the future.
Do I need a specific kind of job to get a credit card?
All you need in order to get a credit card is “access to income.” You may be unemployed, or have any job that you like, and it shouldn’t impact your ability to acquire a card, as long as you are able to make payments. There is a section, when applying for a credit card, to list your current occupation, though you may also list yourself as being a student, unemployed person, or homemaker.
What are the perks of having a good credit score?
A good credit score will grant you low interest rates on big payments, as you have shown that you can be relied upon to make payments in a timely manner. Landlords, too, will be more likely to take you in if you have a good credit score. Finally, a decent credit score makes loan approval so much easier–so if you are looking to study abroad (and are filing as an independent)--having a good credit score will certainly work in your favor if you apply for private loans.
How can I responsibly manage a credit card?
Financial tracking apps can be used to manage your budgeting. Most banks have an online portion to them, where you can monitor your payments/transactions.
What to look out for in a Credit Card
In the worst case scenario, you may have your information stolen, leaving your finances vulnerable. This is called credit card fraud, and it is worth reading up on before getting yourself a card, just to be sure that you aren’t vulnerable to being taken advantage of. Furthermore, you should know how to cancel your card, should you ever happen to lose it.
Finally, it is never a good idea to go over your limit/overspend.
How to Build Your Credit Score
Here are some ways to build your credit card score once you do happen to acquire a card:
- Track your payment progress
- Make all of your payments on time
- Pay more than the minimum amount required
- Dispute any errors you notice
- Request higher limits (so that you aren’t at risk for going over your limit)
Our Choice of Credit Cards for Young Professionals:
Next, it’s on to the choices! Here are a few top choices of credit cards for young professionals that I have accrued–be it for their low interest rates, ease of access, or popularity throughout the young professional market. Feel free to take a look, you newborn adult you!
Choice 1- Wells Fargo Active Cash Card
Pros:
- 2% Rewards Rate
- No Yearly Fee
- Rewards do not expire
- Up to 600 dollars worth of protection for your cell phone
Notes: Not ideal if you plan on studying abroad, as there is a foreign currency transaction fee, and those can get quite pricey depending on how much you spend.
Choice 2- Capital One Quicksilver Secured Cash Rewards Credit Card
Pros:
- No annual fee
- No foreign currency/transaction fees (much better for studying or moving abroad!)
- Easy to utilize, secured
Notes: 30.74% (approx) APR
Choice 3- Chime Secured Credit Builder Visa Credit Card
Pros:
- Little to no additional fees
- No annual fee/interest to be paid
- Do not need to undergo a credit check in order to obtain
- Can set payments to “automate”
Notes: There is a standard minimum deposit that you should make note of.
Choice 4- Blue Cash Preferred Card from American Express
Pros:
- Rewards for supermarket and streaming service purchases (great for anyone who considers themself a big spender on the regular)
- Low foreign transaction fee
Note: Annual fee begins at zero dollars (but may increase).
Choice 5- Discover It Secured Credit Card
Pros:
- Don’t need a super high credit score to get one
- Zero dollar annual fee
- Cashback Match
Note: “Responsible use” of this card can lead to getting a card upgrade in the future.
Choice 6- Chase Sapphire Reserve
Pros:
- If you spend 4,000 dollars within the first few months, you receive up to 60,000 bonus points
- Can also earn points for spending money at hotels (depending on time of year, deal, etc.)
- Great for big spenders and those looking to accommodate country-wide travel
Note: Annual fee is 95 dollars.
In Conclusion, There are Certain things Every Young Professional should be Seeking Out in a Credit Card
The first thing would be: a low interest rate, with a high cash limit. The second is little to no additional fees (if you are in the process of paying for college or paying back student loans, this will come in handy). The third is rewards. You are going to (hopefully) become a responsible credit card owner in the future. As such, you deserve to be rewarded for all of your hard work.
Your eventual final choice of card will depend entirely on what it is you value most–be it travel, low payments, convenience, or points.
