But before we get into the topic, it is recommended to first read about the Top 19 Credit Cards to build credit in 2023 in detail by Bright Money!
With hundreds of options available, how do you know which credit card best fits you? This guide will help you navigate the credit card landscape and discover which cards are preferred for beginners.
Which Credit Cards are Preferred for Beginners?
Credit cards preferred for beginners typically include secured cards, student cards, and those with no annual fees.
1. Credit Building
- Citi® Secured Mastercard®
- OpenSky® Secured Visa® Credit Card
- Discover it® Secured Credit Card
- Secured Mastercard® from Capital One
- Capital One Platinum Credit Card
2. Students
- Journey® Student Rewards from Capital One®
- Discover it® Student Cash Back
- Deserve® EDU Mastercard for Students
3. Fresher
- Petal® 2 "Cash Back, No Fees" Visa® Credit Card
4. Rewards
- Blue Cash Everyday® Card from American Express
- Discover it® Miles
- Citi® Double Cash Card
- Chase Freedom Unlimited®
- Bank of America® Travel Rewards Credit Card
- Wells Fargo Cash Wise Visa® Card
Criteria for Selecting the Best Credit Cards for Beginners
When choosing a credit card for beginners, it's important to consider several key factors:
- Credit Score Requirements: Since beginners typically have limited or no credit history, they need cards accessible to those with fair or no credit scores
- Annual Fees: For beginners, a credit card with no annual fee is usually the best choice. This minimizes the cost of ownership while you're building credit
- Rewards and Perks: Although rewards may not be the primary concern for beginners, it's still a nice benefit. Cards with cashback rewards or introductory bonuses are often preferred
- Interest Rates: Low APRs are important for beginners because they are more likely to carry a balance. Avoiding high-interest charges is crucial
- Credit-Building Tools: Some credit cards offer tools and resources to help beginners understand and improve their credit
Now, let's delve into the specific credit card options that meet these criteria.
Best Credit Cards for Beginners
For Credit Building
1. Citi® Secured Mastercard®
Credit Score Requirement: No minimum credit score requirement.
Annual Fee: $0
Rewards: This secured card does not offer cashback or rewards but can help you build or rebuild your credit.
Interest Rate: Variable APR, generally lower than many other secured cards.
Credit-Building Features: The Citi Secured Mastercard is an excellent option for beginners looking to establish or repair their credit with a secured card.
This card is specifically designed for those new to credit or needing to rebuild their credit.
2. OpenSky® Secured Visa® Credit Card
Credit Score Requirement: No credit check is required, making it accessible to those with poor or no credit
Annual Fee: $35
Rewards: This secured card does not offer cashback or rewards but can help you establish or rebuild your credit
Interest Rate: Fixed APR
Credit-Building Features: The OpenSky Secured Visa Credit Card is an ideal option for beginners with poor or no credit who want to improve their credit history.
This card is designed for individuals who may not qualify for unsecured cards due to limited or poor credit history
3. Discover it® Secured Credit Card
Credit Score Requirement: No minimum credit score requirement
Annual Fee: $0
Rewards: This secured card offers cashback rewards, with 2% cashback at restaurants and at gas stations (up to $1,000 in combined expenses each quarter), and 1% cashback on all other purchases. Discover matches your cashback rewards at the end of your first year
Interest Rate: Variable APR, but a lower APR than other secured cards
Credit-Building Features: Discover provides free access to your FICO credit score, an invaluable tool for tracking your credit improvement
The Discover it® Secured Credit Card is an excellent choice for beginners with no or poor credit. It allows you to build credit while enjoying cashback rewards.
4. Secured Mastercard® from Capital One
Credit Score Requirement: Limited, fair, or no credit history
Annual Fee: $0
Rewards: This card does not offer rewards, making it an affordable option for credit building
Interest Rate: Variable APR, typically lower than unsecured cards
Credit-Building Features: Capital One reports your payment history to all 3 major credit bureaus, thus helping you build credit over time. You can also access a higher credit line after making your first five monthly payments on time
The Secured Mastercard from Capital One is an accessible choice for beginners who want to establish a credit history while avoiding an annual fee.
5. Capital One Platinum Credit Card
Credit Score Requirement: Limited, fair, or no credit history
Annual Fee: $0
Rewards: This card does not offer cash back or rewards, making it suitable for those solely focused on building credit
Interest Rate: Variable APR, with the possibility of a higher APR for those with limited credit history
Credit-Building Features: Capital One offers access to CreditWise, a credit monitoring tool that can help you track your credit progress
The Capital One Platinum Credit Card is a straightforward option for beginners looking to establish a credit history without the distraction of rewards.
For Students
1. Journey® Student Rewards from Capital One®
Credit Score Requirement: Designed for students with limited or no credit history
Annual Fee: $0
Rewards: Earn 1% cash back on all purchases, and if you pay on time, you can get an additional 0.25% cash back, making it 1.25% cash back in total
Interest Rate: Variable APR
Credit-Building Features: The Journey Student Rewards card is designed specifically for students looking to establish their credit while earning cash back rewards
This card is tailored for students and is an excellent option for building credit and enjoying cash back rewards.
2. Discover it® Student Cash Back
Credit Score Requirement: Designed for students with limited or no credit history
Annual Fee: $0
Rewards: This student card offers cashback rewards, with a cashback of 15% on rotating categories (up to $1,500 in expenses each quarter) and 1% cashback on all other purchases. Discover matches your cashback rewards at the end of your first year
Interest Rate: Variable APR
Credit-Building Features: Discover provides free access to your FICO credit score, which can be valuable for students looking to build credit
The Discover it Student Cash Back card is an excellent choice for students who want to build their credit while earning cash back rewards.
3. Deserve® EDU Mastercard for Students
Credit Score Requirement: Designed for students with limited or no credit history
Annual Fee: $0
Rewards: Earn 1% cash back on all purchases, plus access to Amazon Prime Student with an eligible university email address
Interest Rate: Variable APR
Credit-Building Features: The Deserve EDU Mastercard is explicitly designed for students with limited credit history, making it an excellent option for those new to credit
This card is tailored for students and is a good choice for building credit and enjoying cash back rewards.
For Freshers
1. Petal® 2 "Cash Back, No Fees" Visa® Credit Card
Credit Score Requirement: Limited or no credit history
Annual Fee: $0
Rewards: Earn 1% cash back on eligible purchases immediately and 1.25% cash back after you make six on-time payments, for a total of 1.25% cash back
Interest Rate: Variable APR, which can be lower than that of many other beginner credit cards
Credit-Building Features: The Petal 2 card is designed for people with limited credit history and offers a path to increasing your credit limit over time
The Petal 2 Visa Credit Card is an excellent choice for beginners who want to start building credit and earn cashback rewards without an annual fee.
For Rewards
1. Blue Cash Everyday® Card from American Express
Credit Score Requirement: Good to excellent credit, but those with fair credit may be considered
Annual Fee: $0
Rewards: Earn 3% cash back at U.S. supermarkets (up to $6,000 in yearly purchases), 2% cash back at U.S. gas stations and select U.S. department stores, and 1% cash back on all other purchases
Interest Rate: Variable APR
Credit-Building Features: While it may be more suitable for those with better credit, responsible use of the Blue Cash Everyday Card can help you build your credit
This card is ideal for beginners who want to earn cash back on everyday expenses without an annual fee.
2. Discover it® Miles
Credit Score Requirement: Good to excellent credit, but may consider those with fair credit
Annual Fee: $0
Rewards: Earn an unlimited 1.5 miles for every dollar spent, and Discover matches your miles at the end of your first year
Interest Rate: Variable APR
Credit-Building Features: While not specifically designed for beginners, responsible use of the Discover it Miles card can contribute to building a good credit history
This card is an excellent option for beginners who want to earn miles for travel and build credit simultaneously.
3. Chase Freedom Unlimited®
Credit Score Requirement: Good to excellent credit, but beginners with fair credit may be considered
Annual Fee: $0
Rewards: Earn unlimited 1.5% cash back on all purchases. Plus, for the first year, Chase will match your cash back rewards
Interest Rate: Variable APR
Credit-Building Features: While not specifically designed for beginners, responsible use of Chase Freedom Unlimited can contribute to building a good credit history
The Chase Freedom Unlimited is a versatile card that offers cash back rewards and can be a good option for those with a slightly better credit history.
4. Bank of America® Travel Rewards Credit Card
Credit Score Requirement: Good to excellent credit
Annual Fee: $0
Rewards: Earn unlimited 1.5 points on every $1 spent on all purchases. These points can be redeemed for travel-related expenses
Interest Rate: Variable APR
Credit-Building Features: This card may not be suitable for absolute beginners, but responsible use can contribute to building credit. Bank of America provides access to the FICO credit score
The Bank of America Travel Rewards Credit Card is an excellent choice for beginners interested in earning travel rewards without an annual fee.
5. Wells Fargo Cash Wise Visa® Card
Credit Score Requirement: Good to excellent credit, but beginners with fair credit may be considered.
Annual Fee: $0
Rewards: Earn 1.5% cash back on all purchases and 1.8% cash back on qualified digital wallet purchases (e.g., Apple Pay or Google Pay) during the first 12 months
Interest Rate: Variable APR
Credit-Building Features: While it may be more suitable for those with better credit, the Wells Fargo Cash Wise Visa Card can still help you build credit with responsible use
This card is a solid choice for beginners who appreciate cashback rewards and the added benefit of digital wallet purchases.
Final Thoughts
According to a report, 31 per cent of payments are made with credit cards. Choosing the appropriate credit card is one of the most essential steps in building a strong financial foundation for beginners. It is crucial to select a credit card that fits your objectives—whether they involve raising your credit score, accumulating cashback, or both—and your present financial status.
Recommended Reads
How to check your credit score?
5 mistakes to avoid while building credit
FAQs
1. What should beginners look for in a credit card?
Beginners should prioritize credit cards with no annual fees, as this minimizes the cost of ownership. Look for cards with lower interest rates (APR), credit-building features, and potentially cashback rewards.
2. Can beginners with no credit history get a credit card?
Yes, there are credit cards designed for individuals with limited or no credit history, such as secured credit cards and student credit cards. These are excellent options for beginners.
3. What is a secured credit card, and why is it recommended for beginners?
A secured credit card needs a security deposit, which becomes the credit limit. It's recommended for beginners because it helps establish or rebuild credit, and approval is often easier than with unsecured cards.
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