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. No annual fee

Honestly the only cards that should be charging an annual fee are premium credit cards as well as some for travelers. Since you probably wouldn’t qualify for those right now anyway, there really is no reason you should have to pay an annual fee. Therefore, insist on a no annual fee credit card. Even as a first time user, there are still some that you should qualify for.

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 since the credit card reform act has gone into effect, it’s much harder for creditors to screw their customers. No longer can they give you ridiculously short grace periods (that’s the amount of time to pay before interest starts). Now they all have to give you at least 21 days from the date the billing cycle closes (in the US). That being said, you should still be aware of APRs, late fees, etc. before you apply which currently are not capped.

After you fill 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!