What Are The Best Credit Cards For Beginners In 2014?

Posted by CreditCardGuru

guy excited about first cardIf you’re new to the game, the credit card world can be rather intimidating. There are so many different cards and reward programs that figuring out which one is best for you can be like finding a needle in a haystack. Let’s talk about which cards are good for beginners … and which ones are not!

What will you possibly qualify for?

For starters, you will be limited to the easy-to-get credit cards on the market. That means you can probably forget about those 5 percent cash back and double mile deals out there (those require a more established history). The best credit cards for beginners will be those which are entry level or for college students (if you are one) because they will be much easier to get approved for.

The best for beginners…

… will fall under one of the following three categories. Click on the links to see my updated recommendations 2014:

  • If you have no/limited credit history then what you want are credit cards for “fair” credit scores. I’m talking about entry-level unsecured cards. There are not many banks that offer them, but here are a few good ones I recommend. Their annual fees are low and reasonable. Most beginners will fall under this category.
  • If you are currently enrolled in college then you will want to go for student credit cards! These are easy to qualify for if you are a student. If you’re not a student, you can’t apply for one. If you open one of these while you are in school, you will still be able to keep the account open after you graduate (by then the issuer will probably switch you over to a regular card). Here’s the most popular one on the market right now:
  • If you are afraid you will overspend and get into trouble with your first credit card, then I highly recommend you start out using a credit card with a security deposit. Most of those allow you to spend only up to your deposit amount – i.e., $300 deposit = $300 spending power. This ensures you won’t get in over your head, and they are a good way to test the waters if you think that plastic will make you feel like a kid in a candy shop (kind of like the overly excited guy in the above stock photo).

Whatever road you end up going down, something to keep in mind in that credit cards in and of themselves are neither bad nor good. They’re just a tool. But what you do with that tool can be good or bad. It’s your choice.

What you do not know about carrying a balance…

It goes without saying that it would be a bad idea to carry a balance on your new card, right? But let me explain why, because most beginners don’t understand how the interest charges work…

If you pay your bill in full each month you will not be charged interest. A billing cycle is 30 days long. After that, a billing statement is generated and there will be at least 21 days (known as a grace period) for you to make your payment and avoid interest charges.

If you don’t pay your bill in full, you will be in for a big surprise. Why? Because if you carry any balance past the grace period, you will be charged interest on those purchases going back all the way to their date of purchases!

So let’s say you made just one purchase and that was on the first day of the billing cycle. After that cycle closes (30 days later) you only make the minimum payment during the 21 grace period. Then just 5five days after the grace period ends, you decide to pay off the full amount.

Guess what happens? You will owe a lot more than just five days of interest!

You will be charged interest on the amount for the 30 days in the billing cycle + the 21 days in the grace period + the 5 days after that. That’s a whopping 56 days of finance charges!

Most people starting out don’t realize this… interest starts on the day of purchase, not the payment due date. However you can avoid that if you pay in full before the statement due date.

Ultimately, you are the one responsible for using credit cards in a good way. The best credit card for beginners will be whatever type they can handle, so there’s no one-size-fits-all answer. Remember as long as you pay your bill in full and on time, the credit card company isn’t making money off interest. You will be building up credit history, preparing yourself for bigger and better opportunities later on.

Written or last updated Feb. 13, 2014


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Editorial Disclosure: The editorial content on this page is not provided by any bank, credit card issuer, airline or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

12 comments... read them below or add your own

  1. brandon November 5, 2013 at 11:13PM

    I am looking for a no annual fee credit card with a reasonable APR i am 20 years old and have had the same job for 3 years this will be my first credit card where should i look, also i do not intend on using it at all but i will need a new car soon but will not need a loan

  2. Katie July 9, 2013 at 9:58PM

    If you are having trouble finding a credit card that will approve of you Discover is a good company to try. The first credit card I got was a the Journey card with Capital One. Since then I have had many credit cards. But another way to obtain a credit card is to try getting one through your favorite store. A lot of stores offer credit cards, and they usually give you a discount on your purchase when you do apply. BEWARE the APR is usually higher on these cards, especially when you are new. But if you just pay it off on time then you can build your credit pretty fast.

  3. Clint April 22, 2013 at 12:32PM

    I have a job, checking account and go to school. I got approved for the Discover student card with a $500 limit. I did not get approved for the Citi or Capital One student card. Discover is your best bet if your having trouble getting approved.

  4. Megan March 21, 2013 at 8:41PM

    I have two jobs and a checking account I make more than enough money and I can’t get approved for any kind of credit card. I just don’t understand.

  5. Sarah January 18, 2013 at 11:28PM

    Being a college student, I had no idea that there were student credit cards! Thanks for the information. Really helped me get started!

  6. tom January 11, 2013 at 11:31AM

    Ya no one on this list approved me, even though im 19 and and have had a job with one company for a year and a half

    • Fedra January 11, 2013 at 3:24PM

      What company Tom ?

    • zachary July 10, 2013 at 2:33PM

      same problem here if u find one let me know

  7. M.o.R. August 23, 2012 at 12:14PM

    Thanx! Just really helped me out !

  8. Timothy February 26, 2012 at 10:44AM

    I feel credit cards can be a good and a bad thing , i have seen them help many people and i have seen them hurt others … What it all comes down to is what type of person u are and how you are planing on using it “its not guns that kill, its is the people” …same with credit cards…

  9. Kody January 1, 2012 at 7:43AM

    Well I will give it a try. I only have an apartment and utility bills, none of which help my credit since they don’t show up on your credit report. I need to start building and I guess now is the time.

  10. Debt Free Daniel November 21, 2011 at 2:48PM

    I do think charge card is also a must for people who do not have the discipline to keep a credit card. This way, they do not go into debts with the credit company and keep their finances in check.

    Daniel

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