There is no denying the convenience offered by credit cards.
Unfortunately, it’s not always easy to get your very first credit card especially if you have bad or no credit history.
And that’s the dilemma for a lot of people, including myself when I was trying to get my first credit card. If you can’t get a credit card because you have no credit history, then how are you going to build that history?
Sure, you can go get a loan to…
Wait a minute… You can’t even get a loan if you have bad or no credit history.
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I struggled with that issue myself. I came to this country as a refugee when I was 20 years old. So, I had no credit history, nor did I have anyone to co-sign on a car or a loan for me to build that history.
Thankfully, some credit card providers have started to offer secured and non-secured cards for first timers.
I actually used a secured credit card from then Orchard Bank (It is now Capital One) to slowly build my history and score.
Here is my list of some of the top most beneficial and user friendly cards for those looking to get their first credit card:
What will I learn?
Best First Credit Cards for Bad (OK, Fair..) or No Credit
1. Secured MasterCard From Capital One
If you have no credit and are looking for a card to help you build it, this is the one.
This card was my first card (when it was under Orchard Bank) and I still use it till this day, although now it has moved from secured to unsecured.
They usually start people from $200 or so, but the best thing is that after 12 months of paying bills on time, they will give you an unsecured card with $300 limit. Pay your bills on time for another 6-7 months and your credit limit goes up to $500. Every 6 months or so your credit line goes up if you pay on time.
- It has a 22.9% variable purchase APR.
- The annual fee is $29.
2. Chase Slate®
You get $0 introductory balance transfer fee for transfers made during the first 60 days. After the first 60 days, the fee for balance transfers is 3% of the amount transferred with a minimum of $5.
You get a card with 0% Introductory APR for 15 months on purchases and balance transfers. Once the introductory period ends, a variable APR of 12.99%, 17.99%, or 22.99% applies.
There is no annual fee.
3. Chase Freedom Credit Card
This card remains friendly to consumers with modest or no credit. You get five percent cash back on buying gas, groceries and money spent in restaurants.
The APR for purchases made during the initial fifteen months is zero. The same is true for balance transfers.
Best First Credit Cards for College Students
4. Discover Student Card
To me, this is the best first credit card for students. First time users will find it attractive to get this card as it charges no APR (the annual rate of interest charged by the company) for the initial nine months.
However, getting this card could be difficult for those with no exposure to credit.
The rewards you can expect from this company include:
- 5% cash back on things like gas, groceries and restaurants, which most students love.
- For rest of your purchases you get 1% cash back.
- There’s no annual fee to be paid.
5. Capital One Journey Student Rewards Card
Those with some degree of credit history can qualify for this card that charges 19.8 % APR.
You are also rewarded if you pay your bills in time: a bonus of 25% on the cash back earned during that month.
Again, there’s no fee charged annually.
6. Citi Forward for College Students Card
I know the title says 5, but this one is such a great card that I just had to include it in this list.
This card presents great rewards. You are rewarded for every dollar you spend at restaurants including fast food joints, music, movies, and books too.
They don’t charge annual fee and the APR for purchases made during the initial seven months is zero.
Things to Know
- Secured vs. Unsecured
For getting membership of unsecured cards, you are not required to offer collateral by way of keeping funds in your savings bank account. But you are expected to prove your credit worthiness for qualifying for such cards.
If you are new to credit or can’t qualify for unsecured credit card, your only option will be a secured card, needing you to deposit funds in your saving account.
- Hunt for Low Interest Rates
When the rate of interest charged is low, you’ll need to pay less amount of interest if the balance amount from any previous statement gets carried over to the next.
It’s quite a normal practice for card companies to charge low for the initial few months of membership but you need to look at the rate of interest that the company charges after the introductory period is over.
Of course, you can always avoid paying interest by paying your bills regularly in time.
- Get Familiar with the Fees
You’ll find that credit cards come with different benefits and features. The more the rewards and features, the more is the annual fees.
Basic credit cards charge zero to very low fee. Most credit cards would charge for added transactions like balance transfers and cash advances.
It is critical to understand that credit cards do not offer cash for free. In fact, you are simply borrowing money and that needs to be paid back. That is not to deny the conveniences offered by credit cards, but if you fail to pay your payments on time it will surely spoil your credit rating in the long run.
If you take control of your finances and regularly pay within specified time, you can certainly use your very first card to build a great credit score and enjoy the benefits thereof.