*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated May 01, 2018, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
Credit cards for beginners can be a tricky thing to find, and if you have no credit score, you may not know which beginner credit cards for to apply for. But when it comes to building credit, you can never start early enough, and the easiest way to start building credit fast is simply to open your first credit card account. Getting started with credit cards can be a bit overwhelming, but as long as you use your card responsibly, you’ll have an excellent credit score before you know it.
The part most people find the toughest is deciding which starter credit card is the best fit for them. The best beginner credit cards will be different for everyone depending on the amount and quality of your credit history, so the first step towards getting a credit card is to check your credit score. Once you have an idea of where your credit score lands, read on to find the best beginner credit card for you!
No Credit? No Problem.
Don’t be alarmed if you go to check your credit score and nothing comes up. If free credit reporting services cannot locate your information it simply means that there is not enough credit data about you to generate an accurate credit score. If you’re applying for your first credit card and you’ve never had a loan in your name (like a student loan or auto loan) or been added as an authorized user on someone else’s credit card account, then it’s basically like you “don’t exist” in the world of credit.
But don’t worry; this is not as bad as it sounds. In fact, it’s actually better to have no credit than to have bad credit. When you start building credit for the first time, you’ll begin with an average credit score, generally somewhere in the low to mid 600s. It will be easier for you to build up to an excellent credit score than someone who has had credit for a long time but made bad decisions and now has a score in the 500s or below.
Best Credit Cards for No Credit
If you have no credit history, you will probably have to start with a secured credit card as your first account. A secured card works just like a standard credit card, but you have to put down a refundable security deposit to be approved. Since there is zero credit information on you, the banks have no idea if you will be a responsible borrower, so having you put down a security deposit is how they hedge against the risk of you going on a shopping spree and never paying your bill.
The Discover it® Secured Card - No Annual Fee is our top pick for secured credit cards since there’s a $0 annual fee and you can build credit while earning rewards — 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases. Another great feature is the automatic account reviews Discover does starting at eight months to see if you can receive your deposit back. This takes the guesswork out of wondering when you’ll be upgraded from the secured card to an unsecured card. There is also a free credit tracking service with Discover Credit Scorecard.
With a secured card, you’re basically borrowing against your own deposit. Using the card responsibly will help you build a solid foundation for your credit history, and after six month to a year of responsible use, you will be able to get approved for a standard unsecured credit card. And as long as you’re up to date on your payments, you’ll get your full deposit back if you choose to close your secured card. The Capital One® Secured Mastercard® is a great option for a secured credit card. It comes with no annual fee and a free credit tracking service built in with cardmembership.
Are You a Student?
If you’re looking for your first credit card and you’re an enrolled student, you may actually be able to skip the step of getting a secured card and open a student credit card instead. There’s not really any major differences between a student credit card and a normal credit card, but student cards may come with a few helpful perks and benefits specially geared towards students. Also, the application for a student credit card will probably ask questions like where you’re in school, when you expect to graduate, what your major is, and what your GPA is.
These data points get factored into the algorithms the banks run to decide if you should be approved. It’s possible to get approved for a student credit card even if you have no credit history, so it’s worth a shot to apply for one before you cough up the money for a security deposit on a secured credit card.
Best Credit Cards for Students
Journey® Student Rewards from Capital One®: This basic cash back credit card from Capital One® has a few perks that make it ideal for a student’s first credit card. Cardholders will earn an unlimited 1% cash back on all purchases; 0.25% cash back bonus on the cash back you earn each month you pay on time. This brings your potential cash back rate up to 1.25% which is very good for a starter credit card. You can also choose your monthly due date and you’ll have access to the free CreditWise® service so you can track your credit score on a monthly basis.
Discover it® for Students: This credit card offers perhaps the most generous rewards program for any student credit card. Cardholders will earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate. 1% unlimited cash back automatically on all other purchases. As a special incentive for students, you can also receive a $20 statement credit each school year that your GPA is 3.0 or higher. There is also no annual fee, no foreign transaction fees, and no late fee on your first late payment.
If You Already Have a Credit History
Maybe you’re looking for a beginner credit card, but you already have information on file at the credit bureaus because you’ve borrowed money in some other fashion. A credit card is usually the first step consumers take in building credit, but if you have student loans, an auto loan, or have been added as an authorized user on someone else’s credit card account, you may already have a decent credit score without knowing it.
This is why it’s important to check your credit score before applying for your first credit card; there’s no need to open a secured card account if you already have fair credit. If your score is already in the mid 600s, then your options will be a little more open in terms of which credit card you can get approved for. Student credit cards will still be an option as long as you’re still in school, but you may be able to get approved for a better card.
Best Credit Cards for Fair Credit
Capital One® QuicksilverOne® Cash Rewards Credit Card: Just like you’ve seen in the commercials with Samuel L. Jackson, this card comes with unlimited 1.5% Cash Back on every purchase, every day. There’s also no balance transfer fee and you won’t pay any foreign transaction fees. The ongoing APR is 24.99% (Variable), so do whatever you can to avoid carrying a balance. The annual fee is $39, but once you’ve built your credit score up into the Good/Excellent range, you should be able to upgrade your card to the no annual fee version, the Capital One® Quicksilver® Cash Rewards Credit Card!
The Bottom Line
In order to build credit, you need to use credit. These credit cards for beginners are meant to be a springboard to propel you on your journey towards excellent credit. Remember, the most important factor for building credit is to make sure that you always pay your bill on time. The sooner you open your first credit card, the sooner you’ll be able to reach an excellent credit score and start saving money!
*Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.