Best Credit Cards for Beginners in September 2024

. . .

Getting your first credit card is an important step in your financial journey. Credit cards help you to establish a credit history, which is what's then used to determine whether you can qualify for a car loan, mortgage, or other type of financing in the future.

But because you're new to the world of credit, you'll likely have to start with a beginner credit card. These won't have the flashy perks you hear about with premium cards, like airport lounge access, but many do offer straightforward rewards, an attainable welcome bonus, and easier eligibility requirements.

Best Overall: Chase Freedom Unlimited®

. . .

If there’s one card pretty much every beginner should have in their wallet, it’s the Chase Freedom Unlimited®. This card offers a great rewards package while making it easy to learn the basics of using a credit card.

What we like

The Chase Freedom Unlimited has pretty generous rewards rates for a no-annual-fee card. Plus, rewards don’t expire. You can redeem them as cash, shop with points on Amazon, or book travel through Chase Travel℠.

It also comes with a lot of added perks for everyday purchases, like three months of free membership to Intacart+ and DoorDash DashPass. And now through March 2025, you’ll earn 5% cashback on Lyft rides. 

Plus, the card includes trip cancellation/interruption insurance, which is a nice bonus for a no-fee card.

What we don't like

While the Chase Freedom Unlimited is a great beginner card, keep in mind it is just that — a beginner card.

That means it doesn't come with the perks that you'd get from higher-tiered cards, like lounge access, reimbursement for TSA PreCheck® or Global Entry fees, or medical travel insurance.

Learn more about the Chase Freedom Unlimited® or compare all credit card offers.

Best for Students: Discover it® Student Cash Back Card

. . .

If you're a student just starting out on your own, you might not have enough credit history to get approved for most cards. But the Discover it Student Cash Back Card doesn't require a credit score check. Plus, there is no annual fee.

What we like

The dollar-for-dollar match on all cashback you earn in your first year is a nice offer — and with no annual fee to offset, all cashback earned goes straight to rewarding you for spending. 

Cashback can be redeemed as a statement credit, spent directly on sites like Amazon or at online stores through PayPal. This means the rewards you earn can help you offset everyday student costs, like buying textbooks or other school supplies.

What we don't like

You have to activate your bonus categories each quarter, so while you can earn a lot with this card, it requires you to keep on top of not only which categories apply, but when you need to activate them.

Best for No Fees: Petal® 2 “Cash Back, No Fees” Visa® Credit Card

. . .

When you’re just starting, you’ll want to look for cards that don’t charge a lot of fees. The Petal® 2 “Cash Back, No Fees” Visa® Credit Card is a great option for just that.

What we like

The Petal 2’s biggest appeal is the credit-building opportunity since you don’t need a credit score to qualify. After making on-time payments for the first six months, you’ll also be eligible for a credit line increase.

Also, you won’t pay an annual fee, late fees, or foreign transaction fees with the Petal card.

What we don't like

While the Petal 2 is fee-free, it does charge a high interest rate. Make sure you pay off your balance in full each month to avoid paying interest on your purchases.

Best for Building Credit: Tomo Credit Card

. . .

If you have no credit history, it can be difficult to get approved for a credit card. This is where Tomo can help. It’s a credit-building charge card designed specifically for beginners who don’t have a credit score.

Tomo determines your eligibility and credit limit based on your checking or savings account. Unlike regular credit cards that allow you to carry a balance and then charge interest on it, the Tomo Credit Card is technically a charge card. This means you have to pay the balance in full every month. You can set up regular automatic payments from your linked bank account to pay down your Tomo card balance. 

Like any credit card, your payment history will be reported to the major credit bureaus, meaning responsible use of this card will help you gradually build your credit score.

What we like

There’s no annual fee and no interest rates because you’re required to make consistent payments and can’t carry a balance from month to month.

It has a few perks, too. You can get a three-month DashPass membership, a complimentary ShopRunner membership, and a $5 Lyft credit for every three rides in a calendar month (max once per month).

You’ll also get cellphone protection if you pay your bill with your Tomo card, plus 24/7 concierge service.

What we don't like

The downside with this card is that it doesn't offer any rewards to earn. So you won't be able to redeem cashback or points from your spending.

That's not so bad, though, because if you need to build your credit score, it's important to focus on that before diving into the world of rewards.

What Are the Types of Credit Cards?

Issuers offer different types of credit cards to meet different needs. As a beginner, here are some of the main credit card categories you should be familiar with:

Rewards credit cards

Rewards credit cards offer you cashback, points, or miles based on your spending. Some offer flat-rate rewards on all purchases, while others offer higher returns on spending in certain categories, like dining, travel, groceries, or gas.

Many rewards credit cards also come with lucrative welcome offers that can provide a huge kickstart to your rewards balance if you meet the spending requirement within the first few months.

Balance transfer credit cards

These cards allow you to move a credit card balance from one credit card onto another card to take advantage of an introductory interest-free period. As long as you pay the balance off during the introductory period, you won't pay interest on it.

You can use balance transfer cards to get out of debt sooner since you won't have to pay interest on top of your balance.

0% APR credit cards

These cards offer an introductory annual percentage rate (APR) on new purchases. If you plan on buying something big, like new furniture or a vacation, you can use a card with 0% intro APR to finance the cost.

As long as you pay off the balance before the introductory period ends you won’t be charged any interest. But any balance left at the end of the introductory period will be subject to the regular APR — which could be high, so spend responsibly.

Store credit cards

Retailers issue their own cards and offer them as a way for frequent shoppers to save money. These cards usually come with high interest rates, and they don’t always offer rewards.

Depending on the store, they can help reduce the cost of a large purchase — just be wary of the interest rate if you don’t pay off the balance promptly.

Secured credit cards

Depending on your financial situation, you might not qualify for a regular credit card. This is particularly true for beginners who haven’t had a chance to establish credit for themselves.

A secured credit card sets a credit limit based on a deposit that you pay upfront to activate the card. This limits how much you can spend and is a low-risk way to establish credit.

Business credit cards

Many credit card companies also offer business credit cards. These come with business-specific rewards, such as bonus rewards rates on office supplies, travel, advertising costs, or a flat rewards rate on all purchases.

Depending on the card, it can be useful for regular business travel by helping you rack up points or gain access to airport lounges for more comfortable travel.

What To Look for in a Credit Card for Beginners

Here are some key things to consider when you’re picking your first credit card:

Eligibility requirements

If you’re new to credit cards, you likely won’t have a credit history. Everybody has to start somewhere, but limited credit history also means limited credit card options.

Thankfully, many beginner credit cards allow a lower credit score or don't check your score at all and instead use your income, bank balance, or other factors to decide your eligibility. Check the requirements of different cards, so you can find one you’ll be able to qualify for.

Interest rate

The APR is the rate of interest you’ll be charged if you don’t pay your balance in full when your statement is due. Credit card interest rates are much higher than traditional loans. If you don’t have an established credit history, you'll likely end up on the higher end of a credit card’s APR range.

Keep the interest in mind when you swipe your card — overspending can quickly lead you into credit card debt.

Fees

Credit cards charge fees to make money. These can range from an annual fee to foreign transaction fees if you use your card abroad.

Read the card's terms to understand what fees you might be liable for and how they’ll be charged.

Rewards

Many credit cards offer rewards. You can earn cashback, points, or miles when you make purchases with your card. You can then use those rewards to score free vacations or redeem them as statement credits to offset large purchases.

If you want to earn rewards, look for a card that aligns with your spending habits so you’ll be rewarded for spending you’re already doing. Also, consider what type of rewards you’re interested in to make sure you’re earning the right rewards for you.

Reporting to credit bureaus

Using a credit card can help you establish credit and build your credit history. While many card issuers report to the major credit bureaus, some starter credit cards or secured credit cards might not.

Make sure the card you select reports your payments and credit utilization so you can establish yourself as a creditworthy borrower.

Perks

Aside from rewards, many beginner credit cards offer benefits like travel insurance, roadside assistance, and rental car insurance. Even if you don’t regularly use these perks, they can be nice to have and provide peace of mind knowing they’re there if you need them.

Pros and Cons of Beginner Credit Cards

Getting a credit card is exciting and is a significant step on your financial journey. But there are many factors to consider as you jump into the world of credit.

Pros

• Credit-building: Responsible credit card use is one of the easiest ways to build credit. Pay your balance in full and make on-time payments to show your creditworthiness.
• Rewards: Many credit cards offer rewards, which can help offset the cost of your next vacation or simply cover some of your regular expenses as a statement credit.
• Fraud protection: A credit card is a layer of protection between you and fraudsters. It isn’t connected to your bank account, which means your money is protected if your card gets stolen. Credit cards come with $0 fraud liability, so you won’t be on the hook for unauthorized charges.
• Consumer protections: If you used a credit card to purchase a product or service that doesn’t meet your standards, you can request your credit card company to work with the merchant to get your money back.

Cons

• High interest rates: Many beginner credit cards are designed for people with low credit. The interest rates on these credit cards tend to be higher than other credit cards.
• Risk of overspending: If you’re new to credit cards you might be tempted to spend more than you should. This is especially true if you opt for a rewards credit card or a card with a big sign-up bonus that requires you to hit a spending threshold.
• Approval requirements: Beginner credit cards have easier requirements than other cards, but you still may have to show proof of income or use a secured credit card until you’re able to meet them.

Tips for Making the Most Out of Credit Cards

When used strategically, credit cards can help you earn rewards to maximize your spending.

These are a few ways to get the most out of your credit cards:

• Pay your bill on time and in full each month to avoid interest and fees.
• Only use your card for purchases you’d normally make and that you know you can pay off each month, to avoid slipping into credit card debt. 
• Use your bill to analyze your spending habits and see where you spend the most money. This can help you create a more realistic budget. Plus, it’s also a good habit to regularly review your statements for unauthorized transactions.
• Aim to keep your credit utilization (the amount of your available credit you’re using) below 30%. This is one of the biggest factors contributing to your credit score — the lower your utilization ratio, the more it helps your credit.
• Monitor your credit score. Many issuers provide free credit monitoring through your online account.
• Know your perks and use them. If your card offers free car rental insurance, purchase protection, or extended warranty, don’t be afraid to take advantage of these benefits!

FAQs

How do you get a credit card with no credit?

Take a look at the eligibility requirements before you apply for a credit card. Some are designed for beginners who have limited or no credit history. See if you can pre-qualify before there’s a hard pull of your credit report.

If you don’t qualify, look for a credit-builder credit card instead. These are often secured credit cards that report on-time payments to the major credit bureaus. While it might take a while, it can help you establish a credit history and boost your credit score.

Can a credit card help me build credit?

On-time payments and low credit utilization are two factors that make up almost two-thirds of your credit score. The best way to build credit with a credit card is to treat it like a debit card, meaning you only spend the amount of money you have in your bank account. This way you can ensure you’ll be able to pay your balance in full each month.

Keeping a credit card open even if you aren’t actively using it can also help you build credit. Length of credit history is another factor that impacts your score. The longer you have an account open, the better.

What will I need to apply for a credit card?  

A credit card application is pretty straightforward. Typically you’ll need to provide the following information:

• Income
• Occupation
• Social Security number
• Housing expenses (i.e., rent or mortgage payments)
• Personal contact information (like a phone number and address)

You’ll usually find out whether you’ve been approved within a few seconds. If you’re declined, you’ll receive a letter in the mail explaining the card issuer’s decision.

Can I apply for a credit card with no income?

Aside from your credit score, income is another important factor that credit card issuers take into account before approving you for a credit card. Not having an income will make it difficult to pay your balance each month, which means an issuer probably won’t approve your application.

There are some exceptions to this. For example, the income requirement might be a bit more lenient for full-time students who are trying to establish credit for the first time. If you don’t have income, find a co-signer who can help you get approved.

. . .

---

Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.