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Student credit cards and young credit

Best credit cards for Gen Z

Cards that reward dining and travel are among the best options for 18-24-year-olds

Summary

Gen-Zers can benefit from cards that offer rich travel and dining rewards. But there are also great options for those who are new to credit. Read on for experts’ opinions on the best cards for Gen Z.

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Just as companies are starting to grasp what millennials want, there’s a new generation in town – those born from 1995 to 2010 – called Generation Z. And that group is beginning to enter the workforce.

According to a 2015 VisionCritical study, Gen Z-ers differ from millennials in a number of ways, from their media consumption habits to the way they respond to ads to their desire to create and shape culture.

Millennials are now aging into their 30s and 40s, and many are rejecting the concept of using traditional credit. But Gen Z-ers represent the target group for credit card growth in the next decade. Keep reading for expert opinions on what cards are best for Gen Z borrowers.

Chase Sapphire Reserve

Stacy Caprio, credit card expert and personal finance blogger at Deals Scoop, feels the best credit card for the Gen Z generation is the Chase Sapphire Reserve.

“Gen Z-ers love travel and fine dining, and the Chase Sapphire Reserve card is ideal for them,” Caprio said.

A caveat: The Chase Sapphire Reserve is best for those with excellent credit and those who can afford to spend what it takes to get the sign-up bonus. So, if you’re new to credit or you don’t have the budget to cover the $4,000 minimum spend for the bonus or the card’s $450 annual fee, you may want to look elsewhere.

If you spend $4,000 in the first three months, you’ll get 50,000 points. Combined with the card’s generous $300 annual travel credit, the bonus points can make up for the annual fee in your first year  And you’ll get 3x rewards on your worldwide travel and restaurant buys.

Bonus: You won’t deal with any blackout dates or travel restrictions – if there’s a seat on the flight you want, you can book it through Chase Ultimate Rewards.

The Sapphire Reserve also features 24/7 direct access to a Chase service specialist, zero foreign transaction fees, auto rental collision damage waiver and more.

Uber Visa

Caprio also recommends Gen Z-ers consider the Uber Visa card.

“I personally love this card as it gives you an insane amount back on dining – 4 percent – as well as 3 percent back on hotels and airfare,” Caprio said.

In addition, the card offers 2 percent on online purchases and 1 percent on everything else you buy.

The Uber Visa does not come with an annual fee, and if you spend $500 in the first 90 days, you’ll earn $100.

Other cool bonuses include no foreign transaction fees and up to $600 of phone protection when you pay your phone bill with your Uber Visa card, up to a $50 credit for online subscription services when you spend $5,000 or more a per year and exclusive access to events in select stateside cities.

When you want to redeem your Uber Visa rewards on the go — for gift cards, Uber credits or cash back — it’s just a tap away in the Uber app.

See related: Why food is the hottest thing in credit card rewards

Capital One Savor Cash Rewards Credit Card

Tommy Valmeyer, CEO at the digital marketing company openkit, thinks the best credit card for Gen Z-ers is the Capital One Savor Cash Rewards Credit Card.

“Generation Z will care even more about ‘experiences’ than any other generation, and the Capital One Savor Card offers 4 percent cash back on dining and entertainment,” Valmeyer noted. “And that means unlimited, 4 percent cash back on movies, sushi, concerts and sporting events,” he added.

The Savor card does come with an annual fee of $95, but it’s waived for the first year. Cardholders who spend $3,000 within the first three months will also get a sweet, $500 welcome bonus.

This card’s other perks include zero foreign transaction fees, extended warranty protection on eligible items, complimentary concierge service, 24-hour travel assistance services and more.

A different kind of ‘credit card’

Ian Kane is COO and founder of Ternio, a company that provides the only scalable and decentralized blockchain framework capable of more than 1 million transactions per second, according to its website.

Kane said Gen Z-ers are rapidly adopting cryptocurrencies. And he feels many will benefit by using his company’s BlockCard.

“Ternio’s BlockCard – a physical debit card – enables cardholders to spend cryptocurrencies, like Bitcoin or Ethereum, wherever Visa is accepted,” Kane said.

You can sign up for a free BlockCard and start spending your Bitcoin, Ethereum, Stellar (XLM) and Ternio TERN almost anywhere, on everything from travel to entertainment to hotels to shopping.

See related: Chase Sapphire Reserve removes three program benefits

What to look for if you’re new to credit

Of course, not all members of Generation Z can qualify for the best rewards cards, particularly if your credit history is thin or non-existent and you’re starting your career with low or unsteady income.

Although Alex McElyea, senior product manager at OneAZ Credit Union, didn’t pinpoint any specific cards that would suit Generation Z consumers, he explained what this group should be looking for in a credit card.

“Gen Z-ers should typically be concerned with three factors in deciding which credit card is best for them: credit criteria, price and rewards,” McElyea said.

Depending on age, credit history and ability to pay, qualifying for a credit card can sometimes be challenging for those new to credit. Therefore, McElyea said, Gen Z consumers should look for cards with low minimum credit lines of around $2,500 or less in order to qualify.

In most cases, cards with complicated rewards programs come with annual fees, minimum spend requirements or increased interest rates to support the rewards cost, McElyea noted.

“New borrowers rarely see value in higher-end rewards programs like these, so they should choose a card with no fees, lower rates and a simple rewards program with many redemption options,” he said.

If you’re new to credit, you can also apply for a secured card – which requires you to put up a deposit that will determine your credit limit. Some secured cards, such as the Discover it Secured card, offer rewards and allow you to “graduate” to an unsecured card after several months of on-time payments.

However, there are some secured cards that charge fees for things like account origination and maintenance, so read the fine print before you apply.

See related: Young adults shouldn’t wait too long to get started with credit

Credit union cards can be an excellent fit for younger adults

Credit unions tend to offer benefits that are more favorable to young adults than big banks, such as lower APRs on loans, higher interest rates on savings accounts, lower minimum deposits, lower annual fees and more.

Their credit cards’ terms are often attractive to new borrowers as well. Take for example OneAZ Credit Union’s Visa Platinum and Visa Choice Rewards cards, which are available to eligible credit union members.

With a low minimum credit line of $2,500, the Visa Platinum card offers a 3.90 percent introductory APR on balance transfers for nine months and a 3.90 percent introductory APR on purchases and cash advances for six months.

The Visa Choice Rewards cards provides you with rewards for every dollar you spend, and you have choices regarding how you redeem those awards: cash back, travel, gift cards, merchandise or charity donations. And you’ll get double rewards points for any balance transfers you make within 90 days, plus 5,000 points after you complete your first card transaction.

This card also offers a $2,500 minimum credit line, a 3.90 percent introductory APR on balance transfers, purchases and cash advances for six months.

Both cards also feature extended purchase warranties, auto rental and travel accident insurance, ATM cash advances and roadside dispatch program inclusion.

Gen Z-ers are redefining culture

The VisionCritical study uncovered the fact that Gen Z-ers are culture creators – and, as such, are redefining marketing, consumption, entertainment and the workplace. They are empowered and connected, with the desire to make a difference.

With those personality traits in mind, all of the credit cards these experts suggested fit the bill.

Gen Z-ers: Make the most of what you love to do by ensuring you get the best rewards from the card you choose, while balancing that with its fees and interest rates. You’ll definitely come out a winner.

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Published: March 1, 2019

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Credit Card Rate Report Updated: May 19th, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

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