While few can agree on what exactly constitutes a “millennial”, the generally accepted wisdom is that a millennial is someone born between 1982 and 2004. To be honest, its not super important that we nail down the years for the sake of this article. If you’re someone who opts for say Uber over rental cards, AirBnB over hotels, and dining out over cooking at home then you’ve got a little millennial in you, and this article may be for you. In thinking about the judging criteria for this article, we had to come up with some things that we think millennials would value in a credit card. Of course, these are assumptions and generalizations so if they don’t fit what you’re looking for exactly, no worries, we’ve got plenty of other articles and recommendations that may better suit you.
So what are we assuming as we put together this top 5 list?
- Annual fees are a no-go.
- Things like lounge access and rental car insurance (secondary perks) aren’t as important as earning potential
- Earnings should be geared towards things millennials spend money on
- Travel – Uber/AirBnb
- Food & Drinks
- Online Shopping
- Cash back is generally more desirable than points or miles
- Card should have mobile app for management
With the aforementioned criteria in mind, lets take a look at the contenders for best millennial credit card.
- Uber Visa Card
- Capital One Savor Rewards Credit Card
- Discover It Card
- Amazon Prime Rewards Visa Signature
- Chase Freedom
Uber Visa Card
Launched in 2017, the uber visa card was designed specifically for millennial card holders. As with all the cards in this article, it carries a $0 annual fee and comes with a signup bonus of $100 after spending $500 in the first 90 days. That signup bonus is good, though its nothing to really write home about. Where this card really shines however is in its earning structure.
- 4% back on dining – This includes restaurants, takeout, and bars, and it includes UberEATS
- 3% back on hotel and airfare – includes vacation home rentals (think AirBnB)
- 2% back for online purchases – Includes Uber, online shopping, video and music streaming services
- 1% cash back on all other purchases
Not too shabby, eh? If you’re someone who spends the majority of their money on those bonus categories, then this could be a great card for you. Whats more, the Uber Visa card offers additional rewards beyond just what you’ll get as a result of putting spend on the card. Lets look at those a bit more closely.
- Stream with a $50 subscription credit – Once you spend $5,000 on your card in a year, you’ll be given a $50 credit to use towards online subscription services (think Netflix, Amazon Prime, etc.)
- Mobile Phone Protection – Get up to $600 in mobile phone protection against damage and theft when you pay your monthly bill with the Uber Visa.
- Simple reward redemptions – Redeem points for Uber credits, gift cards, or cash back all through the Uber app.
The Uber card is a serious contender as best card for millennials, especially those who spend regularly on things like dining and travel.
Capital One Savor Rewards Credit Card
Capital One always seems to come to the table with high quality cash back products, and the Savor card is no different. It has no annual fee and the signup bonus is $150 after spending $500 in the first 90 days. For those of you keeping score, this is $50 better than the signup bonus offer from Uber. Lets see how its earning structure stacks up.
- 3% cash back on dining
- 2% cash back on groceries
- 1% cash back on all other purchases
The 3% cash back on dining makes this card interesting, though its not exactly the 4% that you’re going to get back with Uber. Though as we mentioned, the signup bonus will put an extra $50 in your pocket right off the bat, so thats something worth considering. What about additional benefits?
- No foreign transaction fees – This is a good perk for a card with no annual fee
- Points never expire – Points expiration dates are the worst
- World Elite Mastercard Benefits
Discover It Card
Discover has done a great job in recent years of releasing products that are easy to understand, come with great benefits, and are free to use (no annual fee). The Discover It card is their flagship product, and its definitely deserving of a spot on this list. I myself carry this card after having signed up a few years ago to take advantage of a great sign-up offer. I was originally planning on canceling the card last year but was given a great retention offer when I called their customer support line (which is awesome by the way). You can learn more about that on the podcast.
As for the card itself, the current sign-up bonus is what Discover is calling “cash back match”. This means that you’ll automatically earn 2x on all your points over the first year. Heres the fine print from their website explaining it:
Cashback MatchTM : Only from Discover, as of November 2017. No purchase minimums. After the first 12 consecutive billing periods that your new account is open, we will match all of the cash back rewards you’ve earned and apply them to your account in the following one or two billing periods. If your account is closed or no longer in the cash back reward program at the time we calculate your potential award, your cash back will not be matched. You’ve earned cash back rewards when they have posted to your account by the end of the 12th consecutive billing period. This promotional offer may not be offered in the future. This exclusive offer is available only to new cardmembers.
Pretty cool right? With that in mind lets see what the earning structure looks like:
- 1% back on all purchases – effectively this is 2% in the first year
- 5% back on purchases within specific categories – effectively this is 10% in the first year
- The Discover It uses a rotating category system wherein they define a new category every quarter. All purchases within that category and quarter are eligible for 5% cash back. For 2018 the categories are; gas stations & wholesale clubs, grocery stores, restaurants, and Amazon.com & wholesale clubs.
Other benefits of this card include; free FICO credit score, 100% us-based customer service, and FreezeIt which allows you to turn your card on/off from the Discover mobile app. Oh, and the card gives you 0% APR for the first 14 months on all purchases and balance transfers. Note that there is a 3% fee for each individual balance transfer.
Amazon Prime Rewards Visa Signature Card
Amazon has made themselves a player in just about every market, so it should come as no surprise that they’ve got a credit card offering worth writing about. As you might expect, the card is specifically geared towards those who shop on Amazon.com often (and lets be honest, most of us do), and it pays especially well if you’re also an Amazon Prime member. A yearly Prime membership will run you $99 if you don’t already have one, and remember that with the Uber Visa you could actually get it for $49 after spending $5,000 in a year. All that being said, lets see what this card has to offer in terms of earning potential.
- 5% back on Amazon.com purchases
- Note: You’ll only earn 3% if you’re not an Amazon Prime member
- 2% back on restaurants, gas stations, and drugstores
- 1% back on all other purchases
The card is a Visa Signature product which means that it comes with certain protections such as; auto rental collision damage waiver, purchase protection, roadside dispatch, and more. Like most of the other products we’ve mentioned it does not carry a foreign transaction fee, and it also comes with additional travel protections such as; emergency assistance, lost luggage reimbursement and more.
The downside to this product is the fact that its signup bonus is only a $70 Amazon gift card. While thats “good” in the sense that its something for nothing (no annual fee), its “bad” insofar as its not on par with the rest of this articles offerings.
Chase Freedom & Freedom Unlimited
To close out our list we’re going to talk about two Chase products; the Freedom and the Freedom Unlimited. The Freedom can be thought of as the Chase version of the Discover It. The card earns 1% on all purchases and offers 5% back on purchases within certain categories. The current signup bonus is $150 after spending $500 in the first 90 days, which seems to be the upper end for these types of cards.
The Freedom Unlimited on the other hand does not ask you to remember or think about any categories. Rather, the card awards you 1.5% cash back on all purchases. It has the same signup bonus of $150 after $500 spent in the first 90 days.
Whats especially interesting about these products is that they’re part of what I call the Chase Trifecta. That is, if you someday signup for either the Chase Sapphire Preferred or the Sapphire Reserve, you’ll be able to transfer points earned from your Freedom and/or Freedom Unlimited to those accounts. This will then allow you to redeem them for a bonus through the Chase travel portal (25% bonus with the Preferred and 50% with the Reserve), or you can then transfer points to travel partners such as Hyatt, British Airways, and United.
Before You Sign-Up
Before you pick a card from this list and decide to sign up, its important that you know your credit score. All of the products mentioned in this article are going to be looking for a score of no less than 700. If you’re not yet at that level, don’t worry, the cards aren’t going anywhere. In that case Id recommend starting with a lesser card, perhaps a secured credit card, building up your credit, and then applying for a rewards card. Once you hit apply you’re going to receive a hard inquiry on your credit report. There is nothing worse than using up a hard inquiry for a card that you’re going to get denied for.
So what is the best credit card for millennials? Its tough to say really, each card mentioned has its own set of pros and cons. Lets take a closer look
Best Signup Bonus – Discover It
If you can put at least $7,500 on the card in year one you’ll earn no less than $150 in rewards, everything after that is gravy.
Best Earning Structure (Overall) – Uber Visa
4% on dining and 3% on travel is pretty significant, especially for a card without an annual fee
Best Earning Structure (Single Category) – Amazon Prime Rewards Visa Signature
Its hard to beat 5% back on anything, much less 5% at Amazon.com. If you’re spending a good chunk of change at Amazon, this card makes sense.
Best Potential – Chase Freedom / Freedom Unlimited
If you have plans of getting a luxury travel card in the future, and that card is either the Sapphire Preferred or the Sapphire Reserve then it makes sense to start earning Ultimate Rewards points now. Both the Freedom and the Freedom Unlimited are great places to start.
Best Secondary Perks – Uber Visa
This came down to the Discover It and the Uber Visa. Discover has 0% APR for 14 months, great customer service, and free FICO scores. Uber on the other hand gives you that $50 credit after $5,000 in spend, and free mobile phone protection when you pay the bill using your card. Ill give a slight not to the Uber Visa on this one.
The card you sign-up for should really come down to where you think you can maximize your value. If you never shop on Amazon, then the Amazon visa probably doesn’t make sense. If you never use Uber or dine out, then the Uber Visa probably doesn’t make sense. Understand where it is that you’re spending your money, then sign up for the card where you can maximize the rewards from those expenditures.