The Best First Credit Cards For Beginners

One of the most frustrating adventures for young people, particularly when coming out of school, is getting that first credit card. With no credit history, the deck is clearly stacked against you. But that doesn’t mean you’re without options. You can get a student credit card, or a secured credit card, even with no credit history.

And if those cards aren’t available for whatever reason, there are some strategies you can use to build sufficient credit and get your first credit card.

Overview of the best credit cards for beginners

Unsecured cards

Unsecured cards don’t have the same limitations that student and secured cards do. They don’t have deposit requirements and they’re not only for students. In other words, it’s just a normal credit card, but the perks won’t be as substantial as premium cards that require good to excellent credit.

But, there are some unsecured beginner credit cards that do offer low-tier rewards. That way you can start building credit fairly quickly, all the while pocketing some extra cash.

You can apply for the Capital One Platinum Credit Card with a fair credit score, so it’s an easier first card to qualify for. It has no annual fee, and a 26.99% (Variable) APR.

If you’re a traveler with less than stellar credit, this card may be a perfect fit for you since it has no foreign transaction fees. And while this card doesn’t come with any perks, Capital One will automatically review your credit line after six months.

The Capital One QuicksilverOne Cash Rewards Credit Card offers an unlimited 1.5% cash back on all of your purchases. It’s a simple rewards structure, but it’s still a good one, especially for a starter credit card.

This card does have an annual fee, but it’s only $39. As long as you earn enough rewards to outdo the annual fee, you’ll still be able to get great value from this card. Like the Capital One Platinum, you’ll have no foreign transaction fee.

Student credit cards

There are credit cards available specifically for students. They have lower credit limits, but relaxed credit guidelines. They recognize a student’s limited financial experience and capacity. Banks will offer these cards as a way of getting the jumpstart on the student’s business after graduation.

Some popular student credit cards include:

The Journey Student Rewards from Capital One comes with an APR of 26.99% (Variable), but $0 annual fee. You can also earn one percent cash back on all your purchases. If you pay on time for the month, you’ll get 1.25% cash back.

Expect to start with a low credit limit, but your line can be increased after making your first six monthly payments on time. The card gives you regular access to your credit report, as well as $0 fraud liability if your card is ever lost or stolen. It also provides collision damage waiver coverage when you rent a car.

With no annual fee and a $50 bonus on your first purchase, the Chase Freedom® Student credit card is a great card for those new to credit. To get your $50 bonus, you’ll just need to buy something using your card within your first three months as a cardholder.

But where the Chase Freedom® Student credit card stands out is in its cash back. You’ll earn 1% cash back on every dollar you spend, regardless of category. Just pay the minimum balance each month and enjoy your rewards.

Your APR will be 17.24% Variable, but there’s no annual fee. You can also check your credit score through Chase to monitor your progress in building your score.

Secured credit cards

You can get a credit card secured by a savings account. The credit line usually matches the amount in your savings account. You’re charged interest on your purchases, and you must make monthly payments. But your payment history will be reported to the credit bureaus, enabling you to build your credit. In the meantime, you’ll have access to a fully usable credit card.

Our favorite secured credit cards include:

The OpenSky® Secured Visa® Credit Card is a way for people just starting their credit journey to begin building a credit history. OpenSky reports to all three major credit bureaus (Experian, TransUnion, and Equifax), so your credit card activity will begin to pay off quickly. And for an added bonus: when you apply for the OpenSky® Secured Visa® Credit Card, they won’t pull your credit score at all and you can instantly see if you’re approved! 

OpenSky also lets you choose your own credit line. Pick an amount between $200 and $3,000 to be your security deposit; that amount will also be your credit limit. Plus, when you’re ready to close the account, you can get the entire amount refunded to you. Or, if you want to keep the card, you’ll have the chance to increase your limit after six months. 

To help you learn to use credit responsibly, OpenSky operates a Facebook community where you can find community, education, and support.

The Capital One Platinum Secured Credit Card comes with $0 annual fee, and a 26.99% (Variable) APR purchase rate. You’ll be required to make a security deposit of $49, $99 or $200, which may be refundable.

You’ll get an initial credit line of $200, which will be increased any time you deposit more money. You can automatically be considered for a higher credit line in as little as six months.

When looking for a secured credit card, don’t overlook local banks and credit unions.

For example, DCU Visa Platinum Secured Credit Card is offered with a reasonable APR and no annual fee. DCU also doesn’t charge fees or higher rates for cash advances and balance transfers. You’ll have the benefit of free auto rental collision damage waiver. The card works with Apple Pay, Android Pay and Samsung Pay.

Summary of the best first credit cards for beginners

Other strategies to build credit so you can get your first credit card

If you’re not a college student, or you don’t have savings available to make a collateral deposit to get a secured credit card, there are other ways you may be able to build your credit to the point where you will be eligible for your first credit card.

Co-signed loans

This usually involves a car loan or some other type of installment loan. If you don’t have a credit history, you can often get a loan approved if it is co-signed by someone with a high credit score. You’ll make the monthly payments, and the pay history will be reported to the credit bureaus. It might take a year or more of on-time payments before you have a credit score sufficient to get a credit card.

Become an authorized user on someone else’s credit card

This will usually be a parent. You’ll have to be added as a fully authorized user, which means they’ll ask for your Social Security number. As long as the monthly payments are made on time by you or the primary user, it will help to build your credit rating.

Credit Builder loans

These work like secured credit cards, but you don’t have to have money in a savings account or for a security deposit.

This is how it works: You take out a credit builder loan for $1,000. The money is immediately deposited into a savings account in your name, but acts as collateral for the loan. Monthly payments are deducted from the savings account. As the months passed, and payments are made, you begin to build a credit history and credit score, even though you never actually make a direct payment.

Summary

Having a credit card can help you build a credit history. But you do need some sort of history to even qualify for most cards. Here are the steps you can take to start building credits. Plus, some cards that don’t require a credit history.

Read more

• When To Upgrade From Your Starter Credit Card (And How To Do So)
• How To Build Credit The Right Way