Best 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

• Capital One Platinum: Best for those with fair credit
• Chase Freedom Flex℠: Best for cash back
• Capital One Quicksilver Student Cash Rewards: Best for students with limited credit
• Capital One SavorOne Student Cash Rewards: Best for students looking to earn rewards
• OpenSky® Secured Visa® Credit Card: Best for those with no credit history
• Capital One Platinum Secured Credit Card: Best for those looking for an easy-to-use card

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 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 29.99% (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 Chase Freedom Flex℠ comes in strong for those just starting out with travel rewards. You can earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening. Your APR will be 19.74% - 28.49% Variable, but there’s no annual fee.

Where the Chase Freedom Flex℠ credit card really stands out is in its cash back. You’ll earn 5% cash back on purchases in designated bonus categories (with a limit of $1,500 per quarter each time you activate), unlimited 3% cash back on dining and drug store purchases, and unlimited 1% cash back on every dollar spent in all other categories.

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 establishing a business relationship after graduation.

The Capital One QuickSilver Student Cash Rewards Credit Card offers an unlimited 1.5% cash back on all of your purchases. It’s a simple rewards structure, but still a good one, especially for a starter credit card, and you’ll be automatically considered for a higher credit line in six months.

This card has an APR of 19.74% - 29.74% (Variable) but no annual fee and a welcome bonus of $50 when you spend $100 on purchases within 3 months from account opening. You’ll also have no foreign transaction fees, Complimentary Concierge Service, and other travel benefits — making it ideal for students planning a study abroad or spring break trip.

The Capital One SavorOne Student Cash Rewards Credit Card is ideal for students who spend the most on dining and entertainment — as most students do.

Cardholders get unlimited 3% cash back on dining, entertainment, popular streaming services, and at grocery stores, plus 1% on all other purchases. Plus, get a whopping 8% cash back on Capital One Entertainment purchases. Not too shabby for a card with no annual fee.

The APR is 19.74% - 29.74% (Variable) but, like the Quicksilver, the SavorOne Student Cash Rewards also comes with no annual fee, a $50 bonus when you spend $100 on purchases within 3 months from account opening, and more.

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.

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 29.99% (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 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.

Cosigned 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 cosigned 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.

The bottom line

Getting started with a credit card is a catch-22. You need a card to build your credit history, but it can be hard to be approved for a card without having that history to show upfront. But it’s not all hopeless. Thankfully, there are quite a few secured cards, student cards, and beginner-friendly unsecured cards to help you out.

Read more

• When to upgrade from your starter credit card (and how to do so)
• How to build credit the right way