Getting your first credit card as a teenager can be a major step towards financial independence. With guidance from parents, the right teen credit card can help build responsible habits and establish credit history. But not all credit cards are suitable for young users.
In this article, we’ll explore the benefits of credit cards, provide 10 top card recommendations, and share tips for teens to use credit responsibly.
# Why Good Credit Cards for Teens Are Beneficial
Here are some of the key advantages of having the right credit card in your teens:
- Builds credit history – Using a card responsibly helps demonstrate creditworthiness to future lenders. This will enable teens to qualify for loans with better terms later in life.
- Learn financial responsibility – Managing monthly card payments helps reinforce important habits like budgeting, avoiding debt, meeting financial goals, and delaying gratification.
- Emergency preparedness – Having an available line of credit provides a safety net for unexpected expenses. This can give teens peace of mind and financial flexibility.
- Promotes financial independence – A credit card can give teens some autonomy in making purchases without carrying cash or needing permission. This allows them to practice real-world money management.
- Earns rewards – Many teen cards offer attractive rewards programs like cash back and travel points. This incentivizes teens to use their card responsibly.
# Factors to Consider When Choosing a Teen Credit Card
The best credit cards for teenagers should have certain key features:
- Low credit limit – Issuers typically grant $500 or less for first time teen users. This prevents overspending.
- No annual fee – It’s best to avoid cards with annual fees, as rewards don’t offset costs for low teen spending.
- Parental controls – The ability for parents to set spending limits and track transactions is key.
- Rewards programs – Cashback and travel rewards help motivate responsible usage without overspending.
- Credit bureau reporting – The card should report on-time payments to help build your teen’s credit file.
- Understandable terms – Look for simple, transparent card terms and conditions. Avoid complex cards teens may struggle to use properly.
- Useful mobile apps – Mobile tools help teens monitor balances, track spending, earn rewards and pay bills on the go.
# The Top 10 Credit Cards Recommended for Teens
Based on the criteria above, here are my top picks for teen credit cards:
Capital One Platinum Credit Card – No annual fee, cashback rewards program, and parental monitoring. Great starter card.
- Get a higher limit after making first 6 monthly payments on time
- Use Capital One’s CreditWise app to monitor credit score
- Fraud Coverage
- Tap to Pay – Check out faster and securely with your contactless card.
Bank of America Cash Rewards for Students – Low $300 limit to start, 1% cash rewards, $0 fraud liability.
- $0 liability protection for unauthorized charges
- 3% cash back category on one choice like gas, dining, or online shopping
- Redeem cash rewards into eligible Bank of America or Merrill accounts
- Qualify for credit limit increases after 12 months of on-time payments
Discover It Student Card – 5% cashback bonus categories each quarter help maximize rewards.
- 5% cashback bonus category rotates each quarter like Amazon, gas stations, restaurants
- Get a $20 statement credit each school year for good grades
- Redeem cash back any amount, any time
- Freeze account if card is lost or stolen via mobile app
Wells Fargo Propel American Express Card – No annual fee, flexible points rewards, spending tracker tool.
- Earn unlimited 3x points on dining, gas, transit, streaming services
- $0 annual fee and cell phone protection
- Points can be redeemed for cash back, travel, gift cards, donations
- Set up customized account alerts to monitor activity
Deserve Edu Credit Card – Special card for students that helps build credit history. No fees.
- Designed specifically for students aged 18-24
- Earn 1% cash back on all purchases
- No annual fee or foreign transaction fees
- Must be enrolled in a 2-year or 4-year college to qualify
- Free year-end summary to help build responsible credit habits
Petal 1 Credit Card – Manages credit line based on your income to prevent overspending.
- Credit limit adjusted based on income rather than credit score
- Manage card use via mobile app including freezing card if lost
- Earn 1-1.5% cashback on eligible purchases
- No annual, international or over-limit fees
- Option to choose fixed APR between 12.99% – 24.99% based on qualifications
Citi Secured Credit Card – Lets parents add teen as authorized user and control spending.
- Must make refundable security deposit to get credit line, min $200
- Access virtual card number to safely shop online
- Qualify for an unsecured card and get security deposit back after 18 months
- Low variable APR compared to other secured cards
- Online access to free FICO credit score
Chase Freedom Flex – Rotating bonus categories to earn cash back rewards.
- Earn 5% cashback on quarterly bonus categories up to $1,500 spend
- Get 1% cash back on all other purchases
- $0 annual fee
- Can convert cashback to points for travel rewards with other Chase cards
- Fraud coverage including unauthorized charges
TD Bank Cash Credit Card – Earns up to 2% cash back on purchases. Mobile app with alerts.
- Earn 2% cash back at grocery stores and 1% on other purchases
- Get $20 annual statement credit just for having a TD Bank account
- Contactless tap to pay feature on physical card for quick transactions
- Make minimum payments via auto-pay to build credit history
- Receive email and text notifications for suspicious activity
# Using a Credit Card Responsibly
To build healthy habits with their first credit card, teens should:
- Use sparingly and pay off monthly to avoid interest fees
- Carefully track spending and watch for unauthorized charges
- Review statements and ensure accurate reporting
- Set a budget and never charge more than they can pay back
- Pay at least the minimum (ideally full balance) on time each month
- Start slow and focus on building credit through on-time payments
- Only use what they can realistically afford based on income
# Avoid Giving a Credit Card Without Parental Involvement
Teens under 18 should not get a credit card without guidance from parents or guardians. Additionally, avoid providing cards if your teen struggles with budgeting or lacks financial maturity. Start by having them earn rewards through an allowance, debit card or secured card with low limits instead. Slowly give more independence as they prove responsible.
# Start Building Healthy Credit Habits Early
Choosing the right teen credit card together with your child can set them on the path towards financial independence. Select an entry-level card with parental controls, educate them on credit practices, monitor their spending, and let them prove they can use credit wisely. With guidance, a credit card for teens can provide valuable real-world money lessons.
Follow my top 10 list and responsible usage tips to empower your teen financially!
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He’s been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What’s Your Story, and more. He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom.