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The best first credit card for young adults and students

To the point Here's how to choose a first credit card for a young person just starting out and help them build their credit score.

Young adults and students often need their first credit card to start building their credit and to help them manage their finances. There are many options offered by financial institutions, but some cards are better than others; they may offer benefits and rewards, low annual fees and interest rates, and additional protections.

Why apply for a credit card as a student?

When you start building your credit file or managing your finances, a good tool is to apply for a credit card.

This is a great way to:

Understanding credit card fees

Before choosing a credit card, it’s crucial to understand the associated fees. Most credit cards have interest charges that apply when the balance is not paid in full each month. As a student, opting for a card with a low interest rate can help you save money in the long run. What’s more, some cards charge an annual fee, while others may charge fees for foreign transactions or cash advances.

How do I get my first credit card as a student?

Obtaining a credit card as a student in Canada is a relatively straightforward process, although requirements may vary depending on the financial institution you choose.

In Canada and France, the legal age for obtaining a credit card without a co-signer is 18. However, in some Canadian provinces, such as British Columbia, New Brunswick and Nova Scotia, the legal age is 19. Some credit card issuers may also require students to have a co-signer if they can’t provide proof of income.

Before applying for a card, assess your financial needs and capabilities. Think about how you plan to use the card and your repayment capacity. You’ll usually need to provide proof of enrolment at a post-secondary institution to apply. This can be a copy of your student card or a letter of admission.

You can apply for a credit card online, for example, by clicking on the card link directly to the financial institution’s website or in person at a branch of your chosen bank.

Once you’ve obtained your first card, you can build up your credit history and adopt good spending and financial management habits.

The importance of responsible credit card management

Owning a credit card is a big responsibility. By using your card wisely, you’ll establish a good credit history, which will benefit you when you want to take out a loan or mortgage. Avoid spending more than you can repay, and always try to pay off your balance in full to avoid interest charges.

Fraud protection and security

Security must be a priority when choosing a credit card. Ensure your card issuer offers fraud protection, suspicious use alerts and secure online services to check your transactions and balance.

How to choose your first credit card?

Analyze your expenses

As a student or young adult, it’s essential to consider your spending habits, the benefits the card can provide and your goal in using it.

Looking at the expenses in your bank account, which are the most frequent and essential?

  • Payment of monthly cell phone or internet bills
  • Grocery stores, restaurants, bars, food delivery like Uber or Skip the Dishes
  • Gas or public transportation

Analysis of your objectives

Then, what do we want to do with the rewards? The most popular answers are:

  • Cash back to reduce your account balance
  • Take the opportunity to travel

According to their needs and objectives, here are four of Canada’s best credit cards for young people (students or not).

Analysis of promotional offers

Many credit cards offer promotions to attract new customers, including reduced interest rates, cash rebates or bonus points for new cardholders. However, reading the small print on these offers is essential, as they may have conditions or expire after a certain period.

Credit cards for young people and students

Mastercard Credit Card

The NBC mycredit Mastercard is excellent for building a credit history for a card that’s easy to manage. You must be 18 years old in Quebec or have reached the age of majority in your province of residence to obtain this card.

Plus, the cash back is automatically applied to the card’s account balance every month! One less thing to do…

This NBC mycredit Mastercard also has valuable mobile device insurance. So if the cell phone or tablet purchased with this card is broken, lost or stolen, the warranty offers up to $1,000 replacement or repair!

Visa Credit Card

The CIBC AventuraMD Visa* Card for Students is the best first Visa credit card for students with travel points. You must be ofage of majority in your province to subscribe to it.

The best way to use Aventura points for travel. So, with Aventura Points, go on an adventure for cheap!

It gives 1 Aventura point:

  • for every $1 spent at gas stations, grocery stores and drug stores
  • for every $1 spent on travel purchases on their CIBC Rewards Centre site
  • for every $2 on other purchases

Also, CIBC is giving away a free membership to SPC+, which gives discounts on a ton of fashion, dining, entertainment and travel stores.

The CIBC DividendMD Visa* Card for Students is the best first Visa credit card for students, for people who want cash back.

Very easy to use and understand, it offers :

  • 2% cash back on grocery purchases
  • 1% on purchases of gasoline, electric vehicle recharging, transportation, restaurants and recurring payments (monthly Internet costs, gym membership, etc.)
  • 0.5% on all other purchases

CIBC also offers free membership of SPC+.

American Express Credit Card

The American Express® Green Card is very flexible. Contrary to popular belief, it is accepted in many more businesses than one would think. It is an unknown card that has great power.

The American Express Green Card is also easy: it gives you 1 Membership Rewards point for every $1 spent on everything.

In Quebec, you have to be at least 18 years old to obtain it and the card is made of 99% recycled plastic.

Then, the points can be used to:

  • Decrease your credit card balance (1,000 points for $10 less in your account) on any expense
  • Transfer to Aeroplan or Marriott Bonvoy for cheaper travel

What’s more, this credit card has no annual fee!

Thanks to American Express Experiences and Preview, people with this card have access to pre-sales of the most popular shows before anyone else.

KOHO Prepaid Card

The KOHO Prepaid Mastercard is a hybrid debit and credit card offered by Canadian fintech KOHO. It is available to people who have reached the age of majority in their province. Therefore, from the age of 18 in Quebec, it allows :

  • To serve as a debit card, where you only spend what is in the account
  • To serve as a credit card by offering cash back rewards

We’ve even named the Extra version, the KOHO Extra Mastercard Prepaid Card, as the Best Prepaid Card in Canada in 2023!

The KOHO Prepaid Mastercard provides the following benefits:

  • Cash back for specific purchases
  • No interest charges
  • Perfect for bill payment and online shopping
  • Available on Apple Pay, Google Pay and Samsung Pay

Please note that this card type does not affect your credit report and will not help improve your credit score, as it is a prepaid card.

The KOHO Prepaid Mastercard can be an excellent way to manage your budget for someone who is just starting or unsure at first. Then, when everything is under control, the next step is to move to a credit card.

Reviews and experiences of other students

Sometimes, word-of-mouth is the best indicator. Talk to other students or young adults to determine which cards they use and why. Their experiences can offer valuable insights.

Join the Milesopedia community on our private Facebook group to share your questions and learn more about credit cards and rewards programs. The more you read up on the subject, the more comfortable you’ll feel about it, and the more likely you’ll make the right choices according to your consumption profile.

Bottom Line

For a first credit card, we recommend choosing one with no annual fee; you take it intending never to cancel it to build your credit history. As a young adult or student, no matter what you choose, it is essential to pay your credit card balances on time, every month and the total amount.

Frequently asked questions

Why is it essential for a student or young adult to have a credit card?

Having a credit card allows you to start building a credit history, which will benefit future loans, such as car or home loans.

What criteria should I consider when choosing my first credit card?

Consider annual fees, interest rates, benefits (such as reward programs), and credit requirements before signing up for a card. With over 200 credit cards in Canada, it’s essential to compare them to find the one that’s right for you.

Do I need a stable income to get my first credit card?

This depends on the card issuer’s criteria. Most cards for students or young adults do not require a stable income, while others might.

Is switching to a card with more benefits easy once I've established a good credit history?

Once you’ve demonstrated responsible credit management, many financial institutions will offer you cards with higher limits or additional benefits.

What are the risks involved in getting my first credit card?

If poorly managed, a credit card can lead to large debts, high-interest rates on outstanding balances and a deteriorating credit rating.

Come to discuss that topic in our Facebook Group!
I'm Caroline, a loyalty program specialist! I use my points to travel more often and at a lower price with my spouse and our two children. I'm passionate about writing about the latest rewards news and how to put more points in your pocket.

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