A credit card can serve as a crucial tool for consumers to function effectively, whether it is carried in physical form as plastic or added to a digital wallet on a mobile device. However, if you are a first-time credit card applicant, what are the essential considerations to bear in mind, and what is the process for securing the most favorable first-time credit card with no annual fee? Read on to learn about the best first-time credit cards to build credit for students and young adults. So, keep reading!
Overview
In a world where credit plays a pivotal role in significant milestones like acquiring a car, owning a home, and sometimes even landing a job, it becomes imperative to lay the foundation of a strong credit history from a young age. Embarking on a credit card journey and utilizing it with prudence is a splendid avenue for credit novices to establish their credit portfolio.
In addition, choosing the perfect inaugural credit card is a personalized experience, contingent upon the unique factors of your credit score and credit history. However, fret not, for there are a plethora of introductory credit cards tailored to those with limited or less-than-stellar credit. When it comes to selecting a suitable credit card for beginners, certain essential attributes should be taken into account. Discovering a card that boasts a modest or nonexistent annual fee, a reduced interest rate, and monthly credit bureau reporting to cultivate credit is key.
Also, if you’re lucky, you may even stumble upon a card that rewards you with cashback. Steer clear of credit cards that come with exorbitant fees, harsh penalties, and sky-high interest rates. As a collegiate individual with a sparse credit history, opting for a student credit card can prove to be a savvy selection. However, for those seeking to rebuild their credit score, a secured credit card is a wise choice, as it offers a secure and reliable option.
What Is Considered a Good Credit Limit?
If you hold one of these cards, a low credit limit (say, $5,000) could be considered bad, while a high limit (say, $10,000) could be considered good. In general, a credit limit in the five-digit range is considered to be quite large. Secured credit cards are the biggest deviation from the norm regarding credit limits.
Best First Time Credit Card to Build Credit
The best first time credit card to build credit include the following:
#1. The Petal 2 “Cash Back, No Fees” Visa Credit Card
This first-time credit card to build credit represents a departure from standard practice in the credit card industry. Petal may ask you to connect your bank accounts to determine your creditworthiness instead of only looking at your credit report. Then, WebBank looks at your bank records and other information, such as bill payments and income, to decide if you qualify.
Candidates without a credit history may benefit the most from this. However, credit history is taken into account when making a lending choice.
#2. Limited Freedom Chase
The Chase Freedom Unlimited®, which charges no annual fee, is the simplest Chase credit card to use as a new customer. All purchases get 1.5% cash back with this card. In addition, you can earn three percent at drugstores, three percent at restaurants (including qualified meal delivery services), and five percent on airfare booked through Ultimate Rewards.
Every day features such as purchase security and extended insurance on purchases made with the card are also included. For 120 days after making a purchase, you are protected against loss or damage thanks to purchase protection.
#3. Cash+® Visa® Secured Card from U.S. Bank
If you’re wanting to improve your credit score and can afford to make a security deposit, this first-time credit card to build credit could be a good choice.
#4. Chase Freedom Flex℠
The Chase Freedom Flex℠, akin to the Chase Freedom Unlimited, is a credit card that does not entail an annual fee. However, it is noteworthy that the earning potential of the former diverges considerably from the latter. The offer entails a potential 5% cash back on every quarter’s rotating categories, with a maximum expenditure of $1,500 per quarter. It is necessary to activate this bonus within a specified date range every quarter. However, the activation process should only require an additional 30 seconds of your time.
#5. Capital One Quicksilver Secured Cash Rewards Credit Card
This first credit card provides a competitive flat-rate cash-back percentage on all purchases, making it a favorable option for a secured card. Nonetheless, the prevailing annual percentage rate (APR) on this particular card is relatively high.
Consequently, it may not be a prudent option for individuals who anticipate carrying a balance on their credit card accounts. It is worth noting that no credit card is an ideal choice for carrying a balance.
Also, read: BEST FIRST CREDIT CARD FOR BEGINNERS IN 2023
Best First Time Credit Card for Students
The best first time credit card for students includes the following:
#1. Discover It® Student Cash Back
This first-time credit card for students boasts an unparalleled blend of impressive earning interest rates and a welcome bonus that’s a rare find in the realm of student cards. It’s no wonder we’ve crowned it the king of cash-back cards for students, and the sovereign of welcome bonuses for students as well.
Hence, with the right strategy, credit card users can rake in some impressive cash rewards.
#2. Discover It® Student Chrome
This first-time credit card is a top pick for students embarking on their credit card journey, thanks to its elegant simplicity. Indulge in your favorite culinary delights and fuel up your ride with ease, as you earn extra cashback without any activation hassle or category juggling.
#3. Capital One SavorOne Student Cash Rewards Credit Card
When it comes to credit cards tailored for students, the Capital One SavorOne Student Cash Rewards Credit Card reigns supreme with its zero annual fees. The Capital One Entertainment Card is a true gem for students, offering an impressive 8% cash back on all entertainment purchases. But that’s not all – you’ll also get a generous 3% back on a range of popular spending categories, from dining to suitable streaming services and even grocery store purchases. This unbeatable offer is hard to come by, especially without the burden of annual fees or a pristine credit score.
#4. Student Rewards Credit Card from Bank of America®
This first time credit card is a great option for students because it does not have an annual fee. It also has rewards that are simple to earn and a generous introductory bonus.
#5. Capital One’s Journey® Student Rewards
Capital One’s Journey Student Rewards program offers credit-first consumers meaningful incentives to establish good behavior. Every purchase you make earns you cash back, but on-time monthly bill payments increase your cash-back rate.
Best First Time Credit Card for Young Adults
The best first time credit card for young adults include the following:
#1. The Discover it® Secured Credit Card.
Similar to other secured credit cards designed for individuals seeking to establish or improve their credit, this first time credit card for young adults necessitates a monetary security deposit. In contrast to the majority of alternatives, this product provides incentives. However, the feature that sets it apart from its competitors is its potential for upgrades. The card issuer has implemented an automated procedure for reviewing accounts with the potential to transition to an unsecured card.
#2. Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card is a leading travel rewards credit card that provides a superior rewards program. It offers a remarkable 5x points on travel purchases made through Chase Ultimate Rewards®, 3x points on consuming food, and 2x points on all other travel purchases. Redeeming travel through Chase Ultimate Rewards® results in a 25% increase in point value.
#3. Petal® 2 Visa® Credit Card
The initial credit card is an optimal choice for young adults as it offers a blend of minimal expenses, an elevated likelihood of approval, and substantial incentives. In addition, this first-time credit card for young adults offers a cashback reward of 1 – 1.5% on suitable purchases, in addition to a fee-free structure. The more time you are in fulfilling your monthly financial obligations, the greater the incentives you will receive. The cardholder is entitled to receive a cashback of 1% on all qualifying purchases initially. The cashback percentage increases to 1.25% after six consecutive months of timely payments and further elevates to 1.5% after maintaining on-time payments for 12 months.
Furthermore, a key feature of the Petal® 2 Visa® Credit Card is its ability to provide a favorable chance of approval to individuals without a credit history.
#4. Venmo Credit Card
The Venmo Credit Card has bonus reward categories that you may take advantage of without having to remember which purchases fall into which categories. Get a rebate of 3% in the category (out of a possible 8) where you spend the most money, 2% in the next highest category, and 1% in all other categories. Food, gas, lodging, and transportation are all examples of major categories that qualify.
#5. Blue Cash Preferred® Card from American Express
This first-time credit card is ideal for young adults who spend a lot on everyday necessities like food, gasoline, public transportation, and streaming services. It offers some of the best rewards on groceries bought in the United States and on select streaming services.
New cardholders are greeted with a generous bonus and an introductory 0% APR period. However, there is a catch to these lavish perks: This card has an annual fee, which is unusual for cash-back cards.
Best First Time Credit Card With No Annual Fee
The best first time credit card with no annual fee include the following:
#1. Chase Freedom Flex℠
This first-time credit card with no annual fee offers cash-back incentives without an annual fee. For clever spenders, it offers up to 5% cash back on qualified purchases. Get an attractive introductory APR and a generous welcome bonus. From account opening, enjoy 0% intro APR on purchases and balance transfers for 15 months. After then, a variable APR of 19.74%–28.49% applies. The first 60 days of transferring your balance require an introductory fee of $5 or 3% of the transfer amount, whichever is greater. After that, whichever is greater, a $5 or 5% transfer fee will be charged.
#2. Discover’s Cash Back Rewards
You can maximize your first-year cash back by using this credit card. Discover will match your cash back during this time, giving you a significant return.
#3. The Wells Fargo Active Cash® Card
The card offers an unlimited 2% reward on all purchases. This card also offers a generous welcome gift and 0% introductory APR on purchases and debt transfers.
#4. Bank of America® Travel Rewards Credit Card
Bank of America® broadens the definition of “travel,” giving you more flexibility in using your rewards.
#5. Wells Fargo Autograph℠ Card
This credit card is a jewel with several amazing advantages. Best part? Annual fee-free! It’s unbelievable. So, start with a great bonus offer and access advantages in many everyday spending areas like dining, petrol stations, public transit, vacations, video streaming, and more.
Will 2 Credit Cards Build Credit Faster Than 1?
It is a commonly accepted notion that responsibly utilizing two credit cards can expedite the process of building one credit score. This is because an additional credit card generates a greater amount of positive information to be reported to credit bureaus monthly.
What Is the Lowest Credit Score to Open a Credit Card?
A credit card does not require a minimum credit score for approval.
How Many Credit Cards Should a Beginner Have?
It is advisable to maintain two or three current credit card accounts, along with other forms of credit such as student loans, auto financing, or mortgages. It is also important to bear in mind that how you utilize your credit cards holds greater significance than the number of credit cards you possess.
References
- standard.co.uk
- lendingtree.com
- forbes.com
- cnbc.com
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