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The Best Credit Cards for College and High School Graduates in 2013

Odysseas Papadimitriou

Many college and high school graduates will soon open their first credit card account. When used responsibly, a credit card can help a consumer build healthy credit, as most lenders report information to the three major credit bureaus (TransUnion, Experian and Equifax) on a monthly basis. Therefore, young adults who open credit card accounts and pay their bills on time each month position themselves to build the type of excellent credit that can lead to savings on mortgages and insurance premiums.

A number of Americans assume credit cards are off limits to people younger than 21. That's a common misconception of the Credit Card Accountability Responsibility and Disclosure Act of 2009 - legislation enacted during the Great Recession to make credit card offers more transparent. However, the barriers to credit are the same regardless of your age: You need to have the income and assets necessary to at least make minimum monthly payments.

Consumers younger than 21 can also use a co-signer to get a credit card.

Even so, many high school and college graduates don't know where to start when it comes to picking their first credit card. After all, there are more than 1,000 credit cards on the market, and their nuances can be maddening to discern.

Consider these recommendations to choose the best credit card for your needs:

Best credit cards for college graduates in 2013. While you may be eager to shed the "student" moniker, using a still-active school email address enables you to take advantage of the better terms banks offer college students, in light of their above-average earning potential.

Card: Journey Student Rewards from Capital One

Category: Rewards

Key terms: One percent cash back on all purchases; 0.25 percent cash back for on-time payments.

Fees: No annual fee.

What makes it unique: The combined 1.25 percent cash back that this card offers is better than the base earning rate provided by the average credit card for excellent credit. The timely payment bonus also promotes the development of responsible credit habits.

Card: BankAmericard Cash Rewards for Students

Category: Rewards

Key terms: Three percent cash back on gas and 2 percent at restaurants for the $1,500 in combined spending in these categories each month; 1 percent cash back on everything else; $100 initial rewards bonus for spending at least $500 during the first 90 days; 10 percent rewards bonus when redeeming cash back into a Bank of America account.

Fees: No annual fee.

What makes it unique: This card offers attractive earning rates in spending categories that are popular among young consumers and promotes saving with rewards redemption incentives.

Card: Discover Open Road Card for Students

Category: Rewards

Key terms: Two percent cash back on up to $250 spent on gas and dining each month; 1 percent cash back on purchases of more than $3,000.

Fees: No annual fee.

What makes it unique: This card boasts a lucrative rewards earning rate for popular expense categories, with no fixed costs.

Card: BankAmericard for Students

Category: Low rates

Key terms: Zero annual percentage rate on purchases and balance transfers for the first 15 months; 10.99 to 20.99 percent regular APR.

Fees: No annual fee; 3 percent balance transfer fee.

What makes it unique: This card's interest-free period is only three months shorter than the longest zero percent intro term offered to consumers with excellent credit. When used in combination with a credit card calculator, it can provide significant savings on big-ticket purchases (e.g., furniture for a new apartment).

Best credit cards for high school graduates in 2013. High school grads who already possess a college e-mail address may be able to qualify for one of the student credit cards listed above. If not, options are likely limited to secured credit cards and credit cards for newcomers.

Card: Harley-Davidson Secured Credit Card

Category: Secured

Key terms: Requires a minimum deposit of $300.

Fees: No annual fee.

What makes it unique: While its branding may throw you off, the Harley Card is the only secured card issued by a major bank that doesn't charge an annual fee. Secured cards are useful for young adults because they prevent spending more than you can afford to pay back. The security deposit you're required to place in opening one doubles as the account's spending limit.

Card: Capital One Cash Rewards for Newcomers

Category: Rewards

Key terms: Two percent cash back on travel expenses; 1 percent cash back on everything else.

Fees: No annual fee.

What makes it unique: This card offers respectable rewards to unproven consumers - without charging high fees to offset the risk involved.

How to select and use your first credit card. Follow these tips to not only find the best card for your individual needs, but also to maximize its value.

1. Only consider cards with no annual fee.

2. Focus on rewards if you expect to always pay off your balance in full each month.

3. Focus on offers with zero APR introductory rates if you have existing debt or an upcoming big-ticket purchase, but try as best you can to stay out of debt at this stage.

4. Make at least the minimum payment each month.

5. Pay your bill in full whenever possible.

If you follow these guidelines, you should see tangible credit score gains within about a year.

Odysseas Papadimitriou is the CEO of CardHub.com, a credit card comparison website that recently announced its selections for the Best Credit Cards for Graduates in 2013.

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