Whether you are just beginning your credit adventure or already have some credit history, as well as characteristics like your willingness to pay an annual fee and your work position, will determine which first credit card is appropriate for you. Your objective should be to discover the greatest first credit card for your particular demands and financial situation, regardless of who you are or how much money you earn. You want a card that will encourage and reward you as you develop healthy credit card habits.
Whether you’re brand-new to credit or have already built credit via other methods, Forbes Advisor has put up a list of cards with the finest attributes to fit virtually everyone looking for their first credit card.
Methodology
In order to assist you in deciding which credit card would be the best match for your requirements, Forbes Advisor examined hundreds of cards targeted towards both credit novices and people just getting their first credit card. We concentrated mostly on credit cards that provide chances to enhance credit by reporting to the main credit agencies. While some cards are suited for those with fair to average credit, others are designed with people with terrible credit or no credit history in mind. Credit cards without an annual charge and credit cards that reward spending were given extra points.
The Best First Credit Cards
Tomo Credit Card
For people without a conventional credit history, the Tomo Credit Card* is an intriguing choice since Tomo will take banking and other financial data into account when deciding whether to approve an application.
Rewards
1% cash back on all qualifying purchases, without limits
Welcome offer
No welcome bonus is available with this card.
Annual Cost
0
Capital One Quicksilver Secured Cash Rewards Credit Card
For a secured card, the Capital One Quicksilver Secured Cash Rewards Credit Card provides a respectable flat-rate cash-back % on every transaction. This card is not a suitable option for someone who may ever envision themselves holding a debt, however, due to the high standard APR (and really, no credit card is).
Rewards
5% cash back on hotels and rental cars booked via Capital One Travel, and 1.5% cash back on all other purchases.
Welcome offer
No welcome bonus is available with this card.
Annual Cost
0
Discover it Student chrome
For the majority of students, the Discover it® Student Cash Back card will be a better option, but individuals with a different spending pattern could find the Discover it® Student Chrome card advantageous. Calculating which card will earn more rewards based on your specific spending habits always makes sense.
Rewards
1% cash back on all other purchases and 2% cash back at restaurants and petrol stations on up to $1,000 in total purchases per quarter.
Welcome Offer
Unlimited Cashback Match – At the conclusion of the first year, Discover will automatically match all cash back earned. There is no minimum or maximum prize amount.
Annual Cost
0
Deserve EDU MasterCard for Students
Students who have the Deserve EDU Mastercard for Students may begin to build credit. Since an SSN is not necessary to apply, it’s a wonderful choice for foreign students.
Rewards
All purchases get 1% cash back.
Welcome Offer
After spending $500 over the first three billing cycles, get one year of Amazon Prime Student on Deserve.
Annual Cost
0
Should I Get A Credit Card?
Your way of living and financial habits will play a big role in determining whether or not credit cards will be effective tools for you. For those who frequently use them for purchases and settle the debt in full each month, credit cards may be quite helpful. This establishes a solid credit history, which is crucial for obtaining better credit cards as well as for other significant life costs like renting an apartment or obtaining a vehicle loan. Additionally, some fraud protection is offered by credit cards, so cardholders are often not responsible for fraudulent payments made to their accounts.
Is it OK to not own a credit card?
While having a credit card is not required, entirely giving up on them may result in the loss of many prospects for monetary advancement and gain. Credit cards make it extremely simple to establish credit history, which is necessary in order to borrow money to pay for expensive products (houses, cars, etc.).
Consumers who choose not to use credit cards may also lose out on rewards programmes, fraud protection, and any service that requires you to have a credit card on file, such as vehicle rentals and certain hotel reservations. (Some of these activities may be performed using debit cards, but doing so has additional drawbacks, such as locking up money in your bank account.) You may absolutely utilize a combination of cash, checks, and debit cards to avoid the problems credit cards may provide if you’re devoted to live without them.
Credit Card Requirements
To apply for a credit card, you’ll need to provide some important information. A credit check will almost always need your Social Security number, which will almost always result in a hard query being made on at least one of your credit reports. You must also provide your contact details, which should include your complete name, address, and phone number. Additionally, certain issuers could ask for details about your work or salary as well as your date of birth.
The decision to provide you a credit card may heavily depend on your credit record. Consumer credit reporting firms, often known as credit bureaus, produce the credit report record, which includes all of the borrowing history connected to your Social Security number. It’s crucial to remember that getting a credit card doesn’t always depend on having a decent credit score. Additionally, credit card companies will consider your income and present debt levels.
What to Look For In a Credit Card
What characteristics distinguish an excellent credit card? Make sure the credit card has a low interest rate first. You’ll want to have the lowest rate possible if you ever need to carry a debt (we never advise doing so), and credit cards are known for having high rates. Be sure you are aware of the financial repercussions if you can’t pay in full, on time, every time, even if you may wish to exchange a low rate in certain circumstances for rewards possibilities or other perks.
There is probably a credit card out there that will suit your demands if you’re seeking for incentives, whether they be cash back, points, or miles. A card with advantages like rental vehicle insurance or trip cancellation coverage might be useful in an emergency and, in certain situations, could save you far more money than you would ever earn in points. However, don’t forget about perks.
Most essential, be sure the credit card you pick will serve your requirements. Applying for a high-end credit card with a generous rewards programme is probably not a good idea if you need to improve your credit. It’s probably best to stay with credit cards like secured and student cards that are made with credit score repair in mind. If you travel often, you may value travel advantages more than monetary incentives or interest rates. Check out our list of the best credit cards for 2022, or any of our other top lists, to start your search for the ideal credit card for you:
- The Best Credit Cards
- The Best Student Cards
- The Best First Credit Cards to Build Credit
- The Best Secured Cards
- The Best Travel Rewards Cards
- The Best Cash Back Cards
- The Best 0% Intro APR Cards
- The Best Balance Transfer Cards
- The Best Airline Cards
- The Best Hotel Cards
- The Best Business Cards
How to Get a Credit Card with No Credit
Adding yourself as an authorised user on someone else’s credit card is a quick and easy method to get a credit card despite having bad credit. Finding a trustworthy friend or family member to add you as an authorised user on their credit card account is the first step in becoming an approved user. Many of the same advantages as the principal cardholder are often made available to you as a result, including your own card with your own name on it. Many banks notify the three main credit bureaus of permitted customer activity.
Finding a co-signer to sign your own credit card application is an additional choice. This individual is a promise to the bank that they will pay your credit card bills if you are unable to. If you’re searching for a co-signer, be careful to choose someone who can assist enhance your chances of getting accepted for a credit card and has a decent credit score and consistent income.
Why is building credit important?
Having good credit shows businesses, banks, and suppliers that you are a reliable, low-risk lessee or borrower who can settle your debts on time. A crucial component of your financial identity and source of numerous benefits is having excellent credit. These benefits include being approved for significant purchases or loans, obtaining reduced interest or insurance rates, and gaining extra incentives for shopping and vacation.
How to Build Credit When You Have None
It might take a while to build outstanding credit, particularly if you’re just getting started. Fortunately, there are a number of methods to begin establishing your credit history. Being an authorised user is a common approach, particularly for kids looking to establish their financial history at a young age. Additionally, you might apply for a secured credit card or a loan to develop credit. Both of these later strategies are designed to be simple, low-risk alternatives for a person to develop or restore credit history.
Become a Licensed User
By adding yourself as an authorised user to someone else’s card, you may improve your credit. Your personal credit card will be issued and tied to the main account after it has been approved. The next step is easy: just use the credit card and make your payments on time to start developing your credit history. You may easily raise your credit score if you do this regularly and stay away from other financial hazards like utilising your credit excessively.
APR: What Is It?
The interest rate charged on a credit card’s carried balance is expressed as an annual percentage rate (APR). The bank, the kind of credit card, and your credit score at the time of application will all affect your specific APR. The U.S. prime rate, which is a benchmark rate used by banks to determine a base APR, will also be a factor. Despite the fact that APR is sometimes described as an annual rate, any interest that is charged is really determined monthly depending on your current amount.
Bottom Line
Credit cards provide significant benefits in terms of incentives, fraud protection, spending power, and convenience when used properly and wisely. As long as you are qualified for application and approval, you can virtually always find a credit card to suit your particular demands due to the large range of credit cards and credit card issuers. Credit cards may assist in funding a comfortable and practical living provided payments are made on time, caution is taken to avoid the dangers of overspending, and cards with low APRs are sought for.
Frequently Asked Questions
How do credit cards function?
The usage of a credit card enables the user to pay for products and services now and then. A financial institution issues a credit card, which enables the cardholder to borrow money from the issuing financial institution via a processing network to do business with a merchant. The bank provides a credit card statement reflecting the charges made to the card typically every 30 days—occasionally 60 days—and the cardholder then settles this debt. Credit cards exist in different varieties and may be used for a variety of objectives.
What qualifications are required for a starting credit card?
If you are under 21, you must have work or financial documentation. Although it is not strictly necessary to have a job if you are 21 or older, it will be more difficult to receive a credit card without one. We provide a checklist of what you must have when applying for a credit card to assist you in gathering all the required documentation.
The impact of a credit card on my credit is what?
Depending on how you use a credit card, it might raise or lower your credit score. Your credit score will increase and improve as your history is reported to the three major credit bureaus if you make on-time credit card payments and maintain a low credit usage rate. If you don’t pay your bills on time, the credit bureaus will report this to them, which will lower your credit score.
