12 Best First Credit Cards (And All the Credit Questions You Were Afraid to Ask)

Susan Shain

Susan Shain | Blog

Aug 15, 2018 | Updated Sep 10, 2018

Thinking about applying for your first credit card?

Wondering how it all works — whether you qualify, whether it’s a good idea?

Then you’re in the right place. Here’s everything you need to know, including the best first credit cards to choose from.

Why Should You Get Your First Credit Card?

If you grew up in a household that avoided credit cards like the plague — or used them too much — you may be wary of getting your first credit card.

But credit cards offer features you can’t find elsewhere — like extended warranties, 0% liability, travel perks, and cash back rewards — and, when used responsibly, are a great way to build your credit.

Why Does Your Credit Matter?

When people talk about your credit, they’re generally referring to your credit history and credit scores. (You may have heard of FICO scores; they’re simply the most popular type.)

Your credit affects your chances of getting approved for jobs or apartments, and also affects your interest rate when you apply for other loans.

When you have poor credit, you might have a tough time qualifying for a nice apartment or mortgage — but with excellent credit, the world’s your oyster.

Do you have great credit, but have never used a credit card? Instead of starting with a mediocre card, you could probably get approved for a valuable cash back card or travel card, or one of the other best credit cards on the market.

How Credit Cards Help You Build Credit

Without credit reports and scores, lenders will be wary of giving you money. After all, they have no idea whether you’ll be a reliable borrower.

To build credit, you need to show you can use credit responsibly, which can seem like a catch-22. But credit cards are an easy way to get started.

Credit card issuers report your monthly payments to the credit bureaus. Your credit reports, and thus your credit scores, are based on that info.

By making on-time payments each month, you’ll show lenders you’re worthy of their trust — and will eventually qualify for higher credit lines, cash back rewards, and travel rewards.

Then when it comes to other types of loans, like mortgages or auto loans, you’ll also qualify for better interest rates. That could save you a lot in the long run: On a $300,000 mortgage, for example, just one additional percentage point of interest could cost you more than $60,000 over the course of 30 years.

How to Get a Credit Card Without a Credit History

If you’re reading this article, you probably haven’t established any credit yet.

With that in mind, here are seven ways to find your first credit card.

Check for Pre-Qualified Offers

Much to your surprise, you may already qualify for some credit cards. Take a moment to see if you’re pre-approved for any cards, which would allow an easy entrance into the credit card game.

Just because you’re pre-qualified for a card, however, doesn’t mean it’ll be a good fit for your lifestyle — so make sure to read reviews before applying.

Become an Authorized User

Want to get a credit card without any credit check? Then consider asking a reliable family member to add you as authorized user.

After becoming an authorized user, mutual trust is important: If the primary account holder makes a late payment, it could damage your credit. And if you, as an authorized user, incur any debt, the card issuer will ultimately hold the primary account holder responsible for paying it back.

As long as you trust your primary cardholder and they trust you, becoming an authorized user can be a smart way to get your first card and start building credit history — without requiring a hard inquiry on your credit reports.

If you’re under the age of 21 when you apply for a credit card, you must have a cosigner, according to the CARD Act of 2009. Issuers, however, may make exceptions if you have proof of income — even if it’s not very much.

Consider a Student Credit Card

Student credit cards are designed for people with limited or no credit history, making them relatively easy to get.

While most student card offers don’t come with much in the way of cash back rewards or benefits, the Discover it® for Students (Review) offers 5% cash back in categories that rotate every three months. That’s one of the better reward programs you’ll find as a student with limited credit.

Even if you’re not a student, you’re actually still eligible for one “student” card: the Capital One® Journey® Student Credit Card (Review).

Here are our top picks for the best first credit cards for students:

Earning Rewards

Buying Gas and Going Out to Eat

Long 0% Intro Period

International Students, No Credit History

Read more about why we picked these cards in The Best Student Credit Cards.

Apply for a No-Credit Credit Card

Not a student? Don’t worry; there are cards for you, too. Here are the best first credit card picks for people without credit history:

No Annual Fee

Easy Acceptance

Immigrants and Relocating Professionals

Read more about why we picked these cards in The Best Unsecured Credit Cards for No Credit.

Try a Secured Credit Card

Another option is a secured credit card.

Unlike “unsecured” credit cards, which extend you a line of credit based on your credit scores, secured credit cards require you to make a refundable cash deposit first.

If you make a deposit of $500, for example, you’ll have a credit limit of $500. You can spend up to that amount before your card is maxed out.

Since you’re fronting your own money, secured cards are easier to qualify for than unsecured cards (but approval is still not guaranteed).

Your payments are reported to the credit bureaus, helping you build credit — and eventually helping you qualify for an unsecured card.

Here are our picks for best first credit cards (secured):

Earning Rewards, No Annual Fee

Low Security Deposit

High Credit Limit

No Bank Account Required

Military Members and Families

Read more about why we picked these cards in The Best Credit Cards for No Credit and The Best Secured Credit Cards.

Apply at Your Bank

You could also try applying for a credit card from your bank or credit union. If you have an established relationship with a financial institution, it may be more willing to take a chance on you.

Consider a Store Credit Card

At store checkout counters, eager sales associates have likely pressured you to get a store credit card. We don’t normally recommend these types of cards for the following reasons:

  • They tend to have lower credit limits and worse customer service than major bank cards.
  • Some are limited to use at certain stores, instead of anywhere major credit cards are accepted.

Watch this video to learn more about the disadvantages of store cards.

So why are we even mentioning them? Because one perk of store cards is they usually have lower approval requirements than mainstream cash back and travel cards.

While you should consider other options first, a store card may make sense if you shop with a specific brand frequently enough to make its rewards worthwhile.

Figure out where the store card fits in with your overall credit-building strategy: It probably won’t be a good card to use for all purchases, for example, but it could help you qualify for better cards in the future.

Just make sure you fully understand the terms — and read ample reviews — before you apply. See our best retail store card picks here.

6 Things to Understand About Your First Credit Card

Although credit cards are valuable financial tools, they can be dangerous if you don’t understand how they work.

Before getting your first credit card, here are six things to know.

1. Credit Card Interest Is Very High

The average interest rate on a mortgage is less than 5%.

Compare that to the interest rate on a credit card (also known as the annual percentage rate, or APR), which can be 18–22% or higher.

That’s why we advise paying off your credit card bill in full each month. If you do that, you’ll completely avoid paying interest — while still enjoying the convenience and credit-building that plastic provides.

2. Minimum Payments Are Dangerous

When you receive your first credit card bill, you’ll see an amount labeled “minimum payment.”

While it can be tempting to pay this — and nothing else — it’s a terrible idea. As noted above, the interest on credit cards is very high. When you make just the minimum payment, you’ll start accruing interest on any remaining balance, and your total debt can quickly spiral out of control.

3. It’s Not a Debit Card

Though they may look the same, credit cards are very different from debit cards.

Instead of withdrawing money from your checking account with each transaction, you’re taking out a loan from your credit card issuer. That’s why it’s important to carefully monitor your purchases — and only spend what you can afford.

You also shouldn’t take out cash with a credit card, as doing so comes with exorbitant fees.

4. Intro APRs Don’t Last Forever

If you see a card that advertises an “intro APR” of 0%, it means you won’t pay interest on purchases for a period of time (often 12–18 months).

While, technically, that’s an interest-free loan, be careful. If you don’t pay off your balance by the end of the promotional period, you’ll be on the hook for the remaining debt at extremely high interest rates.

5. Mistakes Can Haunt You

If you get a credit card, be diligent about making your payments on time, every time. Late payments can stay on your credit reports for seven years, and may trigger penalty APRs that are even higher than normal.

Even without a penalty APR, regular interest rates can cause your credit card debt to quickly balloon until it’s extraordinarily difficult to pay back.

6. Using Your Card Is a Good Thing

All that said, don’t be afraid to use your credit card.

If you never use a card, your issuer won’t have any payment activity to report to the credit bureaus. Which means you won’t build credit as quickly as you could.

The solution? Charge what you can afford, and pay off the bill in full once you get the statement.

Here are a few more articles to read before getting your first credit card:

3 Qualities Shared By the Best First Credit Cards

The best starter credit cards all share similar qualities.

In addition to being open to applicants with limited credit profiles, they also offer:

1. No Annual Fee

When it comes to your credit scores, the average length of your credit history matters. So you should probably plan to keep your first credit card open for a long time.

When you choose a starter card with no annual fee, you’ll be able to keep it open forever — at no cost. Even if you move on to other cards later, you can keep that first credit card open to maintain a lengthy credit history.

2. Rewards

Though it might be surprising, even people with limited credit can qualify for rewards credit cards.

The Bank of America Cash Rewards™ Credit Card for Students (Review), for example, offers 3% cash back at gas stations, 2% at grocery stores, and 1% everywhere else. You can use this cash back as a statement credit, or redeem it for gift cards or other rewards.

The Discover it® for Students (Review) offers 5% cash back on rotating categories; this year, one of the categories is Amazon.com. Other student rewards cards from Discover even offer cash for good grades.

3. Extra Features

Before getting your first credit card, you should read the fine print to learn about other features that might matter to you.

These could include extended warranties on purchases, no foreign transaction fees (if you plan to travel or study abroad), and free credit monitoring services.

While you’ll also see interest rates advertised, we don’t think they’re vital when choosing your first credit card. Because if you follow our advice, and pay off your credit card in full each month, you’ll never pay a dime in interest.

Wrapping Up

When used responsibly, credit cards are a great way to establish a credit history and build up your scores.

You just need to find the credit card that works for your scores and income. If you’re new to the world of credit, that may mean choosing a student or secured card; if you’ve already established some credit, then you may already qualify for a decent rewards card.

Whatever card you end up choosing, make sure you fully understand the terms — especially the interest rates and fees.

Pay your card on time, every time, and eventually you’ll be able to qualify for some of the best credit cards available.

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