Credit cards have become a fundamental and handy financial management tool for most Americans.
According to the latest data by TransUnion, there were over 485 million credit card accounts and 196 million users in the fourth quarter of 2021. The widespread use stems from the flexibility and convenience credit cards offer.
Credit accounts provide a reliable means of building a credit score, spreading the cost of expensive items over time and earning rewards from purchases. The Credit CARD Act of 2009 also provides additional protection for purchases consumers make using their cards.
Quick Look: The Best Credit Cards for Beginners
- Best Overall: Chase Freedom Unlimited®
- Best for Foreign Students: Deserve® EDU Mastercard for Students
- Best for Budget-Conscious Students: Firstcard® Credit Builder Card with Cashback for College Students
- Best for Small Businesses: Capital One®️ Spark®️ Classic for Business
- Best for Long-Term Introductory APR: Wells Fargo Reflect℠ Card
- Best for Earning Travel Rewards: Capital One VentureOne Rewards Credit Card
Say you need a quick loan to cop the latest Yeezy sneakers or fill up your gas tank while on a road trip. You can quickly pay for these items with a credit card without worrying about your remaining balance. However, when used improperly, credit cards can leave you with huge debt, torpedo your credit score and jeopardize your chances of accessing key financial instruments.
If you’re older than 18 and planning to dip your toe into the credit card pool for the first time, you need to be strategic about your choice because it will largely influence the success of your application and your rewards or benefits.
Ideally, you’ll need a beginner-specific product because your credit score may disqualify you from those cream-of-the-crop cards offering rich rewards, juicy perks and big welcome bonuses. Fortunately, many products targeting beginners offer reasonable rewards. And with most of them, you can quickly get approved regardless of your credit score (good, fair, bad or no credit history).
To help you make a more informed choice, Benzinga put together a list of some of the best credit cards for beginners in various categories.
Best Overall: Chase Freedom Unlimited®
For a card that costs practically nothing, the Chase Freedom Unlimited® offers an excellent earn rate. A mix of lucrative welcome bonuses and cashback that cuts across various spending categories, including travel, restaurant, gas and drugstore purchases, establishes it as a top-tier card. As a beginner, the unlimited 1.5% cashback on all purchases gives you a good start.
Suppose you find cooking tedious. In that case, you can leverage the unlimited 3% cashback on dining at restaurants or with eligible delivery services to accumulate dollars whenever you dine out or have food delivered. You also earn 3% cash back on drugstore purchases. Although you need at least a good credit rating to qualify, approval is fast once you meet this requirement. You’ll enjoy a generous intro APR, as well.
Special Offer: Unlimited Match Cash. Use your card for all your purchases and Chase will match all your cashback for your first year with the card.
The Chase Freedom Unlimited® offers you an incredible cashback option as a beginner and allows you to establish a credit relationship. Over time you can leverage the relationship to get one of Chase’s more valuable cards. Its generous bonus categories, outstanding signup offers, flexible rewards and introductory 15-month APR make it the best overall card for beginners.
- Rewards tiers can help you decide where best to use this card
- Chase handles everything online, but you can get service in a branch if you need it
- While Chase has many options for credit cards, it can be difficult to know which one to choose
Best for Foreign Students: Deserve® EDU Mastercard for Students
The Deserve® EDU Mastercard is a great beginner’s card, especially for international students who lack a Social Security number, a U.S credit history or both.
While it may not offer you mouth-watering rewards or added benefits like other student cards, you can still enjoy some basic rewards and a few perks while building your credit history. For instance, the unlimited 1% cashback on every purchase you make with the card can add up over time, regardless of the spending category. Additionally, the card features a referral program that returns roughly $30 for every friend you refer with your referral code. The referral bonus is unlimited.
Other perks include cell phone protection (coverage of up to $600), automatic payments set up, express tracking, Mastercard ID Theft Prevention™ and Master Rental®.
- The perks provided by Mastercard are especially prescient for students and those who travel often
- The rewards program is so simple that you don’t need to plan your purchases around it
- Yes, the Deserve card can help international students, but not everyone may qualify
Best for Budget-Conscious Students: Firstcard® Credit Builder Card with Cashback for College Students
When you’re a college student on a tight budget, you need as much financial flexibility as you can get. There are several ways in which you could access the cash or spending power you need, but traditional bank loans are not really designed for students. Traditional credit cards might not help either, but you can turn to Firstcard to get a no fee option that doesn’t carry a minimum credit score or minimum balance requirement. Plus, you can earn cashback rewards every time you use the card (15% merchant, 10% random and 1% unlimited cashback).
The card can help you navigate college expenses and better manage your finances while obtaining your education, offering a high APY on any deposits made to the card. You even gain access to your virtual card when you get approved and have the option to manage the account online.
- The card allows you to build credit without needing to “get approved” in the traditional manner
- There is no minimum balance, meaning that you can use the card at your leisure
- Virtual card access makes shopping even easier, especially online or when you forget your wallet
- You may not shop with the merchant partners at Berkeley or Stanford
- You will need to make regular deposits if you plan to use the card for purchases
Best for Small Businesses: Capital One Spark Classic for Business
Business credit cards typically feature stricter credit requirements for qualifications. They are, therefore, hardly accessible by business operators with low credit scores. However, the Capital One Spark Classic for Businesses is an exception because it requires a minimal credit score. So it is an excellent starter card for small business owners without extensive credit history who are seeking entry-level business cards to help them build credit history while earning rewards.
As a business owner, you’ll enjoy the 1% unlimited cash back on every purchase when you use this card. Compared to the other best business cards, the cashback may seem insignificant. However, they’re robust enough for a card primarily geared toward average-credit borrowers trying to build a credit history — especially considering that most credit-building cards are stingy when it comes to rewards. Nevertheless, you can boost the cashback through your employee card because it is free. You’re also eligible for unlimited 5% cashback on car rentals and hotels booked through Capital One Travel.
Aside from the reward offered, the card affords users some flexibility. For instance, you can choose when to pay off your credit card. You can also opt for an itemized spending report to help facilitate your business finance budgeting and simplify taxation. Other perks include extended warranties on certain items, travel and emergency help services, supplementary rental car insurance and purchase protection against damage or theft.
- The requirements for the card are relatively easy to fulfill
- There are backside perks on this card that might be perfect for you or your business
- Not all business owners have the same rewards needs, so you should choose your card carefully
- Remember that many of the rewards you receive are contingent on using Capital One services
Best for Long-Term Introductory APR: Wells Fargo Reflect℠ Card
Suppose you want to pay down your existing debt or stretch payments on your new large purchase; the Wells Fargo Reflect℠ Card is the perfect beginner card. The card offers 0% introductory APR for 18 months on new purchases and eligible balance transfers once you are enrolled. The Wells Fargo Reflect℠ Card stands out by offering 0% introductory APR for 18 months on balance transfers and new purchases.
In addition, you get a three-month intro APR extension when you deliver your monthly minimum payment on time during the introductory and extension period. This adds up to 21 months of 0% introductory APR — possibly the longest in the market. The variable APR kicks in after.
If you meet the transfer eligibility requirements, you can use the card to score an interest-free loan on your new purchases strategically or, more traditionally, pay down your existing debt without racking up interest. You must, however, try to pay off your balance, maintain your credit score and ensure you pay the monthly minimum during the promotional period.
Aside from this beneficial introductory APR, the card offers little to nothing in terms of rewards and cashback compared to its competitors. There’s free cell phone insurance (subject to a $25 deductible) for about two claims worth $600 each annually. That’s provided you pay your phone bills with the card.
- Wells Fargo has a host of financial tools that you can get along with your credit card
- You can use your Wells Fargo account to monitor your credit so that you can see how much the card is helping
- Intro APR periods can change at any time, so you may want to get your card right away
- This card may not offer the sort of rewards that you are looking for
Best for Earning Travel Rewards: Capital One VentureOne Rewards Credit Card
Credit cards can help you offset travel expenses through bonus points and miles if you travel often, whether for business or fun. As a newbie in the credit card space, you can leverage the moderate reward offering by Capital One VentureOne Rewards Credit Card to streamline your expenses. The catch, though, is you need a minimum of a good credit score.
The card offers unlimited 5 miles per dollar for rental cars and hotels booked through Capital One Travel and unlimited 1.25 miles per dollar on other purchases. Although not as bountiful, its core appeal lies in its lack of annual fees, unlike other Capital One Venture cards. Furthermore, it allows you to transfer miles to about several qualifying airlines and hotels. The implication is that your reward, which generally goes for 1 cent per mile, could double depending on the partner’s redemption rate.
Other benefits include no foreign transaction fees, travel accident insurance and car rental damage coverage. These extra perks can create an additional incentive for both international and domestic travelers that outweighs the more robust reward of other zero-fee cards.
- You can get rewards on every purchase, even if you’re hardly using the card
- The additional benefits can back up your vacations and travel rather well, especially if you’ve never purchases insurance or damage coverage in the past due to the expense
- Unfortunately, there are those who may not want to book with Capital One just to earn or redeem points
Features to Look for in a Beginner Credit Card
Before applying for a credit card, consider certain features to make a more informed choice. Whether you’re looking at a student credit card, credit cards for young people (mainly teenaged children) or a starter credit card to build or rebuild credit, there’s a few things to check into first.
Annual fees are the charges you pay annually for enjoying the credit card benefits and perks. Usually, the higher the annual fee, the more benefits. While most cards don’t charge annual fees, others do. As a beginner, look for cards with little to no annual fees offering moderate benefits.
Foreign Transaction Fees (FTF)
The foreign transaction fees are charges for using the credit card to carry out a transaction outside the U.S. They could be purchases made abroad or online from an international merchant based overseas. Look for cards with moderate to zero FTF, especially if you travel often.
Balance Transfer Fee
Sometimes you may wish to transfer your debt from one card to another card by a different issuer to enjoy a lower interest rate. The balance transfer fee is the charge you pay to carry out such a transfer. It can be a flat rate or some percentage of the amount you wish to transfer. Always look out for cards with a low balance transfer.
Every card has a stipulated credit limit; once you go over it, you’re charged over-the-limit fees. As a first-time user, losing track of your expenses is easy. So ideally, you should look for cards with low over-the-limit fees so you won’t have to pay much should you breach your credit limit.
Annual Percentage Rate
The annual percentage rate (APR) is the interest you pay annually for borrowing money on your card. Generally, you can avoid paying APR if you pay off your monthly balances by the due date. However, as a newbie, you can sometimes miss the monthly repayments deadline. A low APR becomes indispensable in such situations.
The interest rate, though, only matters when you are spending quite a lot. So, if you will be running up your credit card bill because you want the rewards or you’re using a rewards card to save for a particular experience, you will want the lowest rate possible.
Most credit cards offer 0% introductory APR for some months, after which the regular APR kicks in. The longer the introductory APR, the better. Also, look out for cards that offer relatively low regular APR. You also need to ensure the balance transfer APR and purchase APR is not too high.
Rewards are incentives issuers offer for using their credit services. It can be cashback, spending bonus points or travel miles. Ideally, your credit card choice should match your spending habits so you can fully exploit the opportunities these cards afford. For instance, if you don’t travel much, you don’t want to get a card that rewards miles. On the flip side, choosing a card that offers cashback on grocery purchases makes more sense if you spend more money at the grocery store.
Cashback and bonus points can be redeemed as a statement credit, direct deposit (to a U.S. bank savings, checking or money market account) or checks — for instance, 10,000 points for a $100 check by mail, a $100 statement credit or a $100 deposit to your savings account. You also can redeem bonus points for other rewards like miles for travel, gift cards or Shop with Points at Amazon.
Sometimes, the rewards program may not fall in line with your needs, and that means you should look elsewhere. Don’t waste money on interest payments when the rewards don’t give you what you need, especially if you have a travel credit card.
Signup bonuses are incentives issuers use to woo you into getting their credit card. It could be cashback, bonus points or miles rewards. Generally, to earn your card’s stipulated reward, there’s a minimum spending requirement you’ll have to meet within the first few months of opening the account. Look for cards with the best signup bonuses. Also, ensure the minimum spending requirement is what you can realistically cover within the stipulated time to win the reward.
A credit card offer should be easy to understand, and the credit card company should be prepared to explain exactly how it works. If you get cash back rewards, make sure you can either get a check or use the rewards to pay off your balance. Anything less is not all that helpful.
Your credit score determines whether your application gets approved. As a newbie, you may not have a good credit history or scores to get your application approved, so look for cards that accept fair, bad or no credit history. Yes, a light amount of credit card debt might help with your credit profile, but you also want to make sure that you maintain a solid payment history and work with your card issuers if you have problems making those payments.
Safety and Security
When you use a credit card, you’re not spending your money, like you would with a debit card. Therefore, fraudulent transactions, errors or disputes are not cutting into your real funds held in a checking account. It’s much easier to deal with the credit bureaus than it is to scrape by when someone uses your money with your consent or when a dispute keeps money out of your account while the issue is resolved.
Credit Card Application Requirement for Beginners
Now that you know what to look for in a credit card, take a look at the requirements you need to fulfill to get your first credit card.
You must be at least 18 years old to legally own a credit card. Turning 18, however, doesn’t automatically qualify you for approval. You also need to have a regular source of income to get approved by your potential credit issuer. Otherwise, you might have to apply jointly with someone who fulfills the income requirements.
You don’t necessarily have to be a full-time worker to fulfill the income requirements. Your annual earnings from a part-time job or self-owned business can do the trick. Your application will be considered if your income is enough to cover your credit balance.
Good Credit History
Good credit history will marginally increase your chances. The better the credit score, the higher your approval chances. As a first-timer, it can be tricky to fulfill this requirement. An excellent way to circumvent this is to save a security deposit for a secured card or get someone with good credit to cosign with you. Most vitally, avoid debt as it reflects and tints your credit history. And pay your bills on time.
How to Apply for your First Credit Card
Applying for credit can be overwhelming, but if you approach it in increments, it can be easy. The key steps to follow are:
Justifying Why You Want a Credit Card
The first crucial step is to identify and justify the “why” you need the credit card and “how” you want to use it. For instance, if you want to build your credit score, you can consider choosing a credit-builder card. Essentially, you must decide the type of credit card you want before you start so you can breeze past this step in the process.
Ensure Your Eligibility
Once you’ve identified the need for the card, research your target choice and ensure you’re eligible — especially regarding credit score. The idea is to avoid application denial. A misfire or application denial can reflect poorly on you. Confirming your eligibility before applying is a crucial step you cannot skip.
Start Your Application
Once you’ve confirmed your eligibility, visit the application portal or page and create an account. Different credit card issuers have different application processes. Generally, most issuers allow applicants to apply online through their portals. Follow the instructions from your lender’s application portal accordingly.
Fill in Your Details
Fill in your details after creating an account. Depending on your lender’s requirements, you’ll most likely be asked for information such as proof of ID, salary and Social Security number (SSN). Once you’ve filled in the application form, you can submit your credit card application.
Getting Your Credit Card
Once your application is reviewed and approved, your card will be sent to you via mail or any other means you choose. And voila! You can now enjoy your first credit card.
Frequently Asked Questions
Can I get a credit card without credit?
Yes, you can qualify for certain cards without a credit history. However, such cards charge higher-than-average fees, high APRs, high minimum and increased balance transfer fees. In addition, they offer limited credit limits with little or no rewards.
Can a credit card help me build an excellent credit score?
Yes. Generally, credit cards are good tools for building your credit score when used responsibly. Paying your monthly balances on time, spending within your credit limit and paying off your pending credits are responsible financial behaviors that’ll help build or rebuild your credit.
Should my teenager have a credit card?
Teenagers could use credit cards to build their credit, but you may want to add them to the parents’ credit cards instead of giving them their own cards, at first.