Credit Card Options for Young Adults

March 31, 2012 by  Filed under: Credit 

When a person is in his or her early twenties, it can be tough to get approved for a loan if he or she has not had much of a chance to build up the credit score. Credit cards can help young adults to begin developing a credit history and if the person makes payments to the account on time every month, he or she will be well on his or her way to establishing a solid history. This can help the individual in the future when it comes time to take out a loan for a house, car, vacation, or to pay for college.

Credit cards that are offered to people with no credit history are generally offered at a higher interest rate. The interest rate can be as high as twenty-three percent, and higher in some areas where the law does not govern a limit on credit card interest rates. While this may seem unreasonable, if the young adult uses the card responsibly and only makes purchases that are necessary, he or she can reasonably pay off the balances in time and this can help the person out in the future.

Sometimes, it can seem like there is no easy or affordable way to build a good credit rating. This often means sacrificing the purchase of items that are not absolutely necessary and remaining on a strict budget for the time being. While this sacrifice is not often fun, it will go a long ways to ensuring a solid financial future for the individual. Credit card companies, banks, and other lending institutions will review a person’s credit rating before making an approval decision to extend a loan or a line of credit. If the person has no credit history or a bad credit history, it can be very difficult to get approved for a low interest loan or even for a loan at all.

Many young adults must make a decision to use a charge card responsibly and build their credit score, or be excessive with a credit card and not pay bills on time. Whichever direction a person chooses to go will determine how he or she will be able to establish a good credit standing. Many times, consulting with a consumer credit counselor is a great way for a young adult to decide what type of credit card will be best for his or her specific situation. The credit counselor can also help to provide insight in how to manage a credit card balance and how to ensure that the bill gets paid every month in a timely manner.

There are numerous credit card offers available for young adults with no credit history. These offers can lead to the person having a chance to learn to be financially accountable and this can have a long term, positive impact on the person’s financial future. Speaking with parents and mentors will help the young adult to be prepared in dealing with major financial situations now and for the future.

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