Best First Credit Cards June 2023: Top 10 Picks & Reviews
Reviewed by Randolph Vialva, MBA
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A first credit card should have two things: a low credit card limit so you learn how to use it and reporting to the credit bureaus so you begin to build credit. A higher credit line may make it easier to buy more things, but keep in mind that credit card interest rates are typically high making it harder to pay the money back. Keeping the credit card limit low will encourage you to think about everyday purchases before buying and will make it easier to pay back the balance. Here’s what to look for in your first credit card.
Top 10 Best First Credit Cards June 2023
- Petal® 2 “Cash Back, No Fees” Visa® Credit Card: Best Overall
- Discover it® Student Cash Back: Most Affordable
- Chase Freedom® Student credit card: Lowest Fees
- Capital One Platinum Credit Card: Best for Bad Credit
- Discover it® Student chrome: Best Cash Back Match
- Citi® Secured Mastercard®: Best for Credit Reporting
- Deserve® EDU Mastercard for Students: Best No Fee Program
- Capital One SavorOne Student Cash Rewards Credit Card: Best Credit Builder
- BankAmericard® Secured Credit Card: Most Versatile
- Capital One Quicksilverone Secured Cash Rewards Credit Card: Best Cash Back
What Is A Credit Card?
No one has all the cash they need. A starter credit card is a payment method that allows you to buy items, take them home, and pay the bill later. A credit card has an annual percentage rate for interest that is charged for all purchases and will have a credit card limit. Your credit score will determine your ability to buy big-ticket items like cars and homes. You cannot spend more than your credit card limit; if you try to the credit card issuers will deny the purchase.
Why Should You Have A Credit Card?
A starter credit card shouldn’t take the place of a regular bank account, where you should keep all the cash. Credit cards are a good solution for those who need help to simplify money management, offer versatility in payments, and should be affordable for college student and their family members. A student credit card should help the young adult begin to create financial independence by developing money management skills, making regular purchases at grocery stores, creating automatic payments, etc. Other nice options include accounts that don’t charge high annual fees, offer balance transfers, and give annual rewards in the form of statement credits. Student credit cards should also provide options for online and traditional banking and ATM locations.
How Does A Credit Card Work?
With a credit card, you make a purchase, finalize the transaction, take the item home, and pay for the full amount over a certain amount of time. You can do this on item purchases or through cash advances, but most companies charge a cash advance fee. Many people try to pay off credit cards monthly, but some larger purchases will have a 12 or 18-month free period for purchases.
Read more: Top 10 Best Credit Card
Top 10 Best First Credit Cards June 2023
Petal® 2 “Cash Back, No Fees” Visa® Credit Card
Like Discover It Secured Credit, The Petal One program has some of the highest annual percentage rates, starting at 22.99% and ranging to 32.49%, making it one of the most expensive cards. The card also has one of the best bonus structures as long as you note which merchants participate in the program (2%-10% cashback), and it has no annual fees and no foreign transaction fees, making it economical to use when traveling. Petal also includes a cash score, based on your linked bank account.
- No Hidden Fees
- No Security Deposit
- Rewards Only at Certain Merchants
- Higher APRs
This card will help new users quickly build good credit, and has a higher credit line base, starting at $300 to $5,000. The credit limit can be raised quickly, and because it begins small, can help new users learn how best to use credit. However, cash-back bonuses can be confusing and are only allowed at certain merchants, so the cardholder needs to know where to shop to get the best bonuses. Rewards typically come as a statement credit.
Discover it® Student Cash Back
Discover has a good reputation as a first credit card issuer, however, their bonus structure and rewards programs have some of the lower bases. This isn’t a dollar-for-dollar match, but instead a percentage. If you’re looking to begin building good credit, the Discover It Secured Credit program is a good option, however, but understand how to activate the rewards categories to make the most of the cash-back options. These are unsecured credit cards, you don’t have to make a deposit.
- 5% Cash Back
- First-Year Cash Back Match
- No Hidden Fees
- 5% bonus limited to $1,500 per quarter
- The base reward rate is 1%
Discover will automatically match the cash-back bonus for this program in the first year, which could result in large savings for regular card users. However, despite the no annual fee and 0% APR during the first six months, the base rewards offered on this card are some of the lowest around. Rewards typically come as a statement credit.
Chase Freedom® Student credit card
For a first card, the Chase Freedom Student has a few good selling points. The card includes a $50 bonus after the first purchase and includes a $20 Good Standing Rewards after each anniversary date. For those looking to build credit, the card has a lower credit line which means the card payoff amount should remain reachable. It also has no annual fee.
- No Annual Fee
- Rewards Base
- New Cardholder Bonus Structure
- No bonus categories
- High APR
Despite the good portions of the Chase program, there isn’t a bonus structure which will make it harder to earn rewards for new users. Also, when using outside the US the card accrues 3% international transaction fees, which will add up quickly over time.
Capital One Platinum Secured Credit Card
When building good credit, the Capital One program is a good option, however, there are drawbacks. The plan requires a refundable security deposit; the plus to this is that the credit limit may be raised with a higher security deposit. For those using credit cards to pay for tuition or books, this may be a big help. However, the card also has a higher-than-average APR, which means balances can quickly grow to be out of control.
- No Annual or Hidden Fees
- Bad Credit Score Eligible
- No foreign fee
- Requires Refundable Deposit
- High APR
- No Rewards Program
The secured deposit is linked to the initial credit line. Capital One does offer some bonuses, although not in the form of a rewards program. Instead, they include fraud protection with the account and report to the three major credit bureaus so paying on time and maintaining a low balance will reflect well on your credit cards over time.
Discover it® Student chrome
The DiscoverIt Chrome account is a good place to start building good credit, however. The card has a lower APR on eligible purchases and in the first year, the cash-back match is automatic. However, the rewards with this card are lower than with other programs, and they cap the rewards at $1,000 per quarter.
- No Annual Fee for Account Opening
- Builds Credit
- Cash Back Match in Year 1
- $1,000 Cap on Rewards
- Rewards Are Lower
The Discover program doesn’t require a good credit card rating to get started, which makes this a good option for those building good credit. However, the 2% rewards earnings are capped at $1,000 per quarter which means a lower return on what you buy with the card. Rewards typically come as a statement credit.
Citi® Secured Mastercard®
Secured credit cards mean the user first pays a security deposit; this is sometimes a refundable security deposit and will reflect on the credit limit amount of the card. For those with average credit card history, no credit score required, or bad previous credit, this can be a good way to build good credit and strengthen their financial base. They report to the major credit bureaus. It does include Mastercard platinum benefits. However, the high APR of this card and the added foreign transaction fees may make it a bad choice for first-time credit builders.
- No Annual or Hidden Fees from Account Opening
- Up to $2,500 Credit Limit
- Reports to Three Credit Bureaus
- Foreign Fee
- High APR, Penalty APR
- Security Deposit
The main drawback of this card is that there isn’t a built-in rewards base for use. Instead, it’s only about building credit. Users who pay a security deposit will also incur high and penalty APR rates, and foreign fees. If you plan to use the card sparingly and only to begin building better credit, the card does have some benefits, but you’ll find better options with other programs.
Deserve® EDU Mastercard for Students
For international students with no or average credit history, there are pluses to the Deserve program including no annual fees, no foreign transaction fees, and a cash-back bonus structure. However, the cashback is limited to 1%, and other bonuses aren’t money based. Instead, they include refer-a-friend bonuses, cell phone protection, grocery stores, and free Amazon Prime Student deals.
- No Annual Fee
- Cash Back Bonus
- No Foreign Transaction Fee
- 1% Cash Back Bonus Maximum
- Bonuses Atypical
This card does have benefits, especially for international students because there are no foreign transaction fees; you do get a personal referral code to make referrals for the program. However, the limited bonuses and high APR mean you’ll find better starter credit cards in other programs.
Capital One SavorOne Student Cash Rewards Credit Card
For those with no or limited credit history the Capital One SavorOne Student card is a good option for students looking to build credit. The card doesn’t have annual fees or foreign transaction fees, so it can be the main credit card for the student. The program also includes lucrative cash-back bonuses, however, students have to be actively enrolled in a university to apply and qualify.
- No Annual Fee
- No Foreign Transaction Fee
- Cash Back Bonuses
- High APR
- Limited Bonus Categories
The SavorOne card does have its drawbacks, including a higher-than-average APR and no introductory rate. Also, the bonuses are limited to specific categories, so cardholders need to read the fine print so they know how to make the most of the bonus categories and merchants.
BankAmericard® Secured Credit Card
Like Capital One Quicksilverone Cash Rewards Credit, for those wanting to rebuild credit or begin building credit, this secured card is a good option. It requires a $200 minimum deposit to open the account; the credit card limit is based on the security deposit. They report to the three major credit bureaus. However, the card does include a 3% foreign transaction fee and a very high annual percentage rate, so balances can quickly become higher than the users expected.
- No Annual Fee
- Free FICO Score
- Upgrade Secured Credit Cards to Unsecured Cards
- Minimum Security Deposit
- 3% Foreign Transaction Fee
- High APR
One of the benefits of this card is that after building credit, you can easily upgrade from a secured card to an unsecured credit card without penalty. The card also has a no-penalty APR, so you don’t have unexpected fees from missed payments or higher balances.
Capital One Quicksilver Secured Cash Rewards Credit
For those with no or limited credit history or credit scores the Capital One Quicksilverone cash rewards credit program has benefits for those looking to build good credit through a secured card. These include unlimited cash-back rewards of 1.5% on eligible purchases and no foreign transaction fees. However, because these are secured cards, they do require a deposit, and the credit card limit is based upon the initial deposit.
- Unlimited Cash Back Rewards from Account Opening
- No Foreign Transaction Fees
- High APR
- Secured Deposit
The base reward is 1.5%, however, some rewards for hotel stays and rental cars can earn up to 5% cash back, which can be a big benefit for users. The card requires a $200 security deposit, which will result in a $2,000 credit line, but there are no annual fees and no hidden fees, making it a good option for those building credits.
How to Pick The Most Suitable First Credit Card?
The most suitable first credit card will have a balance that allows you to make eligible purchases easily, an APR that doesn’t add too much to the balance, and that you can handle. Secured card accounts can come in handy when building a credit score if you use them wisely, but can quickly become a money pit because of high-interest rates, monthly payments, and continued credit utilization. A card’s Annual Percentage Rate, or APR, is the annualized percentage that is charged to your account on combined purchases made. The charge will appear as a separate line on your credit card statement and is added monthly until the purchase amount is paid off. The APR can add quite a bit of extra money to any purchase so it is better to pay off combined purchases quickly rather than allowing the APR to continue to accumulate.
How to Apply for The First Credit Card?
To apply for your starter credit card, look up the cards you are interested in and compare the applications, annual percentage rates, minimum balances, know your credit score, and other account features. Then, fill out the online application.
Information
Most applications will want your annual income, any other outstanding debts, and any non-job income sources. The application will also require your permanent address, and some will require a co-applicant. Also, note if you want an authorized user.
Age
You have to be at least 18 years old to apply for your own credit card. Under that age, you will need a joint account holder like a parent, guardian, or spouse to complete the application. The joint account holder may become an authorized user.
Financial details
Most applications will ask for your annual income and any other income – like spousal support or child support – which might be used to repay the debts. Sometimes it is helpful to break the annual income into monthly income amounts so that you have an estimate of how much you could afford to pay back with each statement. Some applications will also want to know that you have a bank checking or savings account, although this will not typically be directly linked to the credit card account.
How to Take The Most Advantage of Your First Credit Card?
For most people, building good credit is linked with using credit cards, but that usage can quickly lead to credit card debt, a high APR, a bad credit score, and credit card accounts with minimum payments that cannot be met. This causes higher interest balances to creep even higher which impacts your credit report negatively and may result in an inability to buy the things you need – from a new car to a home and even education. If you are looking to pay off credit card debt, we have several ways that will help you pay down credit card balances quickly so that you can get out of debt. Knowing your credit limit will help you decide what purchases to make.
Final Thoughts
Do you know your credit score? There are times we all need more money, and during those times credit card usage is not always bad. When used with caution, existing credit cards can be a good way to make combined purchases that you don’t have the cash for right now. For those with no payment history, the prudent use of a starter card will help establish credit history through credit reports that can be used for big-ticket purchases like homes and cars. However, when used without caution you can quickly reach your credit card limit and have no reasonable way to pay back the debt. If you have only a few cards – fewer than four – balance transfers to a card with less interest can be a way to pay down debt. The balance transfer method should only be used if you will then cancel the accounts with high APRs. This will harm your good credit score and might make it hard to pay for your basic needs.
Frequently Asked Questions (FAQs)
High-interest debts, sometimes called revolving debts, are debt that accrue interest at a rate that makes it nearly impossible to repay. Any account that has an APR over 10% is considered high interest.
Some low or no-interest credit cards offer a promotional period in which the APR is low enough that the user can pay down an entire balance. This period may be six months or up to one year but rarely lasts longer than 12 months.
The best way to change a spending habit is to take small steps forward. If your expenses are significantly higher than your income it will be hard to make a complete turnaround all at once. Consider decreasing your entertainment spending by $5 each week at first. When used to that decrease, add another reduction in spending, and so on until your living expenses are in line with your monthly income. This is a good way to avoid overspending.
No. Most repayment plans do not require this, and instead set up a payment program through which you make the same payment over a set period of time, up to five years, to pay down debt.
There is not a single answer for this because it depends on how high the APR is, how much is owed, and what other balances also need to be paid. However, in general terms, it can be harder to pay off high-interest balances first because the balance, itself, doesn’t show a swift improvement. This can make the payor feel as if their plan isn’t working. For this reason, the snowball method may be a better fit than the avalanche method.
This will depend on your monthly income, the total of all your debts, what your highest interest rate is, and how you have prepared for unexpected expenses like care maintenance. Over the past few months, inflation has gone up making finances more uncomfortable for many families and putting credit history in jeopardy. Having extra cash available for groceries and other expenses is important, but using credit means that you aren’t only paying for the item. You are also paying the company an additional fee. Before using cards, it is better to create an emergency savings plan, and a budget, and to try to spend within the budget as often as possible.
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