Q: For first time users, what is the best card?
A: So you’re looking to get your first credit card? Well good for you, because that is one of the most important steps of building credit. There are a lot of great credit card deals out there for first-time users, but there are also a lot of unethical companies that may give you a bad deal. For your first credit card, here’s what you should look for:
Rule #1. An annual fee that’s not a ripoff
Just because you’re a newbie to credit, it doesn’t mean you should be bamboozled!
A lot of cards out there for first-timers will rip you off with outrageously high annual fees, upwards of $75 or more per year!
Now a high fee like that is understandable for a premium travel card like the $95 Delta SkyMiles. But you won’t even qualify for something like that anyway, so why should you be paying a fee that high?! For a regular credit card to start out with, you really shouldn’t pay much – no more than $40/year. Less is even better.
Here are 3 for beginners that are great values:
Rule #2. Stay away from store cards (usually)
Many first timers apply for store cards because they’re so easy to get, but these won’t benefit you much.
First of all, unless they are associated with Visa/MasterCard, then you will only be able to use them at the given store. You would be better off going with a traditional card that can be used everywhere instead – therefore the best credit card for first time users will be one associated with Visa or MasterCard (Discover and AmEx are harder to qualify for, otherwise I would recommend those too).
That being said, I do think it’s okay to get one store card as part of your plan to build up your credit. But just don’t rely solely on store cards… you need to have major credit cards to build a respectable credit record!
Rule #3. Pay attention to the fine print
Fortunately the Credit CARD Act (reform laws) went into a effect a few years ago, creditors have fewer ways to screw consumers. But make no mistake about it, they can still screw you big time!
Nestled in the fine print, you will often find tricks relating to the reward programs (if the card has one). Then in the not-so-fine print (the Schumer box on the application) you will find the info about the APRs, late fees, etc.
If you’re applying for a store card to finance a big purchase, the biggest thing you need to be on the look out for is “no interest if paid-in-full” financing. With this, the only way you avoid interest is if you pay the full amount back before the introductory period ends. If you don’t, the finance charges are applied to your purchase retroactively going back to day 1. You will find this sketchy 0% structure on store-branded cards, not Visa/MasterCards from a major bank (those truly do give 0% offers for the specified amount of time).
After filling out your first credit card application, follow this important tip…
It’s best to make a habit of only charging what you can afford to pay in full each month. As a first time user, the last thing you want to do is pile up a balance from the start. Not to mention, your APR will probably be fairly high as a first timer anyway, so it would not be smart to pay in full!
If you’re unsure which cards are a fit for you, then try this out:
This post was written or last updated November 6, 2013