Getting a credit card as a young adult is a big step. To help, we’ve researched the best first credit card options and how to make this important choice.
Getting your first credit card is a significant financial milestone. Maybe you’re a college student jumping into personal finance for the first time. Or maybe you’ve just never had a reason to get a credit card before. Regardless, you may be overwhelmed with all the options that are out there.
When it comes to getting your first credit card, I recommend first looking at your spending habits. Then, choose a card that offers the most rewards based on those spending habits. Here are three recommendations for first credit cards: one for general cash back, one for travel rewards, and one for gas rewards. I also discuss secured credit cards and student credit cards for your reference.
In This Article:
- First Travel Rewards Credit Card: Capital One Venture Rewards Credit Card
- Best First Gas Rewards Credit Card: Blue Cash Everyday® Card from American Express
- A Note About Secured Credit Cards
- A Note About Student Credit Cards
- Final Thoughts
First Travel Rewards Credit Card: Capital One Venture Rewards Credit Card
The Capital One Venture Rewards Credit Card is an excellent choice for first-time cardholders who plan to travel a lot. You’ll earn 2 miles for every dollar you spend, regardless of category. One hundred miles is equal to $1 in travel rewards. There’s also a one-time bonus of 40,000 miles (equal to $400 in travel rewards) once you spend $3,000 on the credit card within the first three months of opening it.
In addition to having no foreign transaction fees, this credit card also offers the many perks that come with being a Visa Signature card. These include:
- Complimentary travel upgrades
- Complimentary concierge service
- 24-hour travel assistance services
- Special access to premier sporting events and concerts
- Shopping discounts at select online merchants
- Extended warranty on purchases
There’s an annual fee of $59, which is waived the first year. If you use this card often and take advantage of all the travel rewards, it should easily make up for the annual fee.
- Learn more about this card
Best First Gas Rewards Credit Card: Blue Cash Everyday® Card from American Express
If you’re a frequent driver, you may be looking for a credit card that offers good gas rewards. The Blue Cash Everyday® Card from American Express is the perfect credit card in this instance. You’ll receive the following cash back rates:
- 3% cash back at U.S. supermarkets (up to $6,000/yr, then 1%)
- 3% cash back at U.S. gas stations (up to $6,000/yr, then 1%)
- 3% cash back on U.S. online retail purchases (up to $6,000/yr, then 1%)
- 1% cash back on everything else
- Terms Apply.
There’s no limit on the amount of cash you can earn, and it never expires. You can redeem your cash to your bank account, as a statement credit or in the form of gift cards. There’s also no annual fee.
Another perk of the Blue Cash Everyday® Card from American Express is that you’ll get online access to view your FICO® score for free. This comes in handy for monitoring your activity, especially if you’re new to building a credit history
- Learn more about this card
A Note About Secured Credit Cards
Secured credit cards require you to put down a refundable deposit as collateral. This deposit becomes the credit line for your card. Secured credit cards can help you establish or rebuild your credit history, and are useful if you have no credit or bad credit.
If you’ve been paying off a loan in your name or otherwise have some credit history, you may not need to get a secured credit card before applying for a regular credit card. Regular credit cards tend to offer more attractive perks than secured credit cards.
A Note About Student Credit Cards
Student credit cards are a great option for young people to get their feet wet with credit. I got my first credit card while I was in college and still have that credit card to this day. It’s a Wells Fargo cash back credit card.
Related: Best Credit Cards for College Students
Most credit card issuers offer at least one student credit card. These credit cards are often comparable to their other rewards credit cards but come with a low initial limit. As you establish your creditworthiness by making on-time payments, you’ll likely see your limit increase over time. If you’re in college, I highly recommend starting to build your credit now by getting a student credit card.
Final Thoughts
Getting your first credit card is an exciting time and the process shouldn’t be taken lightly. Which credit card you choose as your first can have a huge impact on your finances. If you choose correctly based on your spending habits, you can reap some great benefits such as travel rewards or cash back.
Once you receive your first credit card, remember to use it wisely. Only make purchases that you can afford to pay in full when the bill comes. Try to keep your credit utilization ratio low by not using more 30% of your credit card balance at any given time. Above all, enjoy the many perks that come with being a cardholder.
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