The best first credit cards of September 2024
Choosing one of our best first credit cards can be a great step toward financial literacy. When used responsibly, credit cards can help you earn rewards on everyday spending and build your credit history. Many credit cards feature additional benefits like phone coverage, travel insurance and shopping protection, which can greatly enhance your overall spending experience.
With the right card, you can start earning rewards on your spending and set yourself up for the future. We have selected the best first credit cards to suit your needs and help you pave the way to greater financial literacy.
- Chase Sapphire Preferred? Card: Best for beginners
- Capital One Quicksilver Cash Rewards Credit Card: Best for straight forward cash-back earnings
- Capital One VentureOne Rewards Credit Card: Best for no-annual-fee travel rewards
- Capital One SavorOne Cash Rewards Credit Card: Best for foodies and entertainment for no annual fee
- Chase Freedom Unlimited?: Best for transferable points
5x | 5x on travel purchased through Chase Travel?. |
3x | 3x on dining, select streaming services and online groceries. |
2x | 2x on all other travel purchases. |
1x | 1x on all other purchases. |
Year after year, the Chase Sapphire Preferred? Card wins at the TPG Awards for Best Travel Rewards Card. In exchange for a $95 annual fee, you’ll gain access to the incredible Ultimate Rewards program — unleashing tons of potential value for award travel. Read our review of the Chase Sapphire Preferred Card.
Pros
- Earn multiple points per dollar on things like travel and dining
- The current welcome bonus on this card is quite generous. TPG values it at $1,230
- Premium travel protection benefits including trip cancellation insurance, primary car rental insurance and lost luggage insurance
Cons
- The card comes with a $95 annual fee
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.
- Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Travel℠. For example, 60,000 points are worth $750 toward travel.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- Member FDIC
5% | Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply |
1.5% | Earn unlimited 1.5% cash back on every purchase, every day |
The Capital One Quicksilver Cash Rewards takes the guesswork out of earning cash-back rewards by offering an unlimited 1.5% earning rate on all purchases. Read our review of the Capital One Quicksilver.
Pros
- Unlimited 1.5% cash back on all purchases
- No annual fee
- Cash back doesn't expire
- The intro APR offer that comes with this card makes it a solid choice for those looking to finance a large purchase. You’ll get 0% intro APR on purchases and balance transfers for the first 15 months (19.99% - 29.99% variable APR after, there's a 3% balance transfer fee for the first 15 months or at the promotional APR offered at any other time. No fee for amounts transferred at the Transfer APR)
Cons
- Limited card perks and benefits
- Other cards offer more potential and upside when it comes to redeeming cash back
- Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- $0 annual fee and no foreign transaction fees
- Enjoy up to 6 months of complimentary Uber One membership statement credits through 11/14/2024
- Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; balance transfer fee applies
5 Miles | 5 Miles per dollar on hotels and rental cars booked through Capital One Travel |
1.25 Miles | 1.25 Miles per dollar on every purchase, every day |
The Capital One VentureOne is a no-annual-fee travel card that allows cardmembers to earn 1.25 miles per dollar spent on all purchases. These miles can be used for travel purchases and are fully transferable to Capital One’s numerous travel partners. Read our review of the Capital One VentureOne Rewards Credit Card.
Pros
- No annual fee
- Earn a bonus of 20,000 bonus miles once you spend $500 within the first three months from account opening
- Use your miles to book or pay for travel at a 1-cent value, or transfer your miles to loyalty programs to gain potentially even greater value for your rewards
- Earn 1.25x miles on all purchases
- No foreign transaction fees
- The intro APR offer that comes with this card makes it a solid choice for those looking to finance a large purchase. You’ll get 0% intro APR on purchases and balance transfers for the first 15 months (19.99% - 29.99% variable APR after, there's a 3% balance transfer fee for the first 15 months or at the promotional APR offered at any other time. No fee for amounts transferred at the Transfer APR)
Cons
- Other credit cards can offer you higher rewards for your common purchase categories
- Capital One airline transfer partners do not include any large U.S. airlines
- $0 annual fee and no foreign transaction fees
- Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
- Earn unlimited 1.25X miles on every purchase, every day
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Transfer your miles to your choice of 15+ travel loyalty programs
- Enjoy 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; balance transfer fee applies
8% | 8% Cash Back on Capital One Entertainment purchases |
5% | 5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply) |
3% | 3% Cash Back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart? and Target?) |
1% | 1% Cash Back on all other purchases |
With this card, you can maximize your purchases on four popular categories from dining, entertainment, popular streaming services to grocery stores. Read our full review of the Capital One SavorOne Cash Rewards Credit Card.
Pros
- Earning 3% back on dining, entertainment, popular streaming services, and at grocery stores (excluding superstores, like Walmart and Target) is a great return for a no-annual-fee credit card.
- This card is great for beginners.
- The intro APR offer that comes with this card makes it a solid choice for those looking to finance a large purchase. You’ll get 0% intro APR on purchases for the first 15 months (19.99% - 29.99% variable APR after, there's a 3% balance transfer fee for the first 15 months or at the promotional APR offered at any other time. No fee for amounts transferred at the Transfer APR).
Cons
- If you spend a lot on dining and entertainment each year, there are cards that provide better value with higher rewards potential.
- The sign-up bonus isn’t anything to write home about (though it is easy to earn).
- Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening
- Earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart? and Target?), plus 1% on all other purchases
- Earn 10% cash back on purchases made through Uber & Uber Eats, plus complimentary Uber One membership statement credits through 11/14/2024
- Earn 8% cash back on Capital One Entertainment purchases
- Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 15 months; 19.99% - 29.99% variable APR after that; balance transfer fee applies
- No foreign transaction fee
- No annual fee
5% | Enjoy 5% cash back on travel purchased through Chase Travel?, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more. |
3% | 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service. |
1.5% | 1.5% cash back on all other purchases. |
The Chase Freedom Unlimited? is a card held by beginners and award traveler pros alike. With no annual fee and no rotating bonus categories, this card makes earning rewards simple. Read our review of the Chase Freedom Unlimited.
Pros
- At least 1.5% back on every purchase, with up to 5% or 3% back on select categories
- There is no annual fee
- Perfect for everyday, non-bonused spending
- Has incredible value when paired with a premium Chase card
Cons
- There is a 3% foreign transaction fee so the card shouldn't be used abroad
- Limited card perks and benefits
- Intro Offer: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
- Enjoy 6.5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
- After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
- No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24%.
- No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited? card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Comparing the best first credit cards
Credit card | Best for | Intro offer | Earning rate | Annual fee |
---|---|---|---|---|
Open Editors rating Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer. at Chase's secure site | beginners | 60,000 bonus points Open Intro bonus Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel?. | 1 - 5X points | $95 |
Open Editors rating Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer. at Capital One's secure site | straight forward cash-back earnings | $200 Open Intro bonus Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening | 1.5 - 5% cash-back | $0 |
Open Editors rating Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer. at Capital One's secure site | no-annual-fee travel rewards | 20,000 miles Open Intro bonus Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel | 1.25 - 5X miles | $0 |
Open Editors rating Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer. at Capital One's secure site | foodies and entertainment for no annual fee | $200 Open Intro bonus Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening | 1 - 8% cash-back | $0 |
Open Editors rating Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer. at Chase's secure site | transferable points | Up to $300 cash back Open Intro bonus Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Travel?, 4.5% on dining and drugstores, and 3% on all other purchases. | 1.5 - 5% cash-back | $0 |
More details on the best first credit cards
The Chase Sapphire Preferred Card is one of the most popular travel rewards credit cards on the market. Offering an excellent return on all travel and dining purchases, the card packs a ton of value that easily offsets its low annual fee. Cardholders can redeem points with a bonus on travel booked through Chase Travel or transfer points to one of Chase’s valuable airline and hotel partners.
We almost universally recommend the Chase Sapphire Preferred Card to both credit card beginners and experts. It earns one of our favorite rewards currencies, it offers lucrative perks and it features a low annual fee. In fact, many of us at TPG started our journey into points and miles with the Chase Sapphire Preferred.
“The Chase Sapphire Preferred has remained a top card in my wallet for years. Between the consistently strong sign-up bonus, low annual fee and continual improvements that have been made over the years, it's hard for any other mid-tier rewards card to compare. I love that I can earn bonus rewards on travel, dining, streaming and online grocery purchases — all with just one card. Plus, Chase Ultimate Rewards points are valuable and easy to use whether you're new to points and miles or an expert.” — Madison Blancaflor, managing editor
The Capital One Venture Rewards Credit Card offers a strong earning rate on hotels and rental cars booked through Capital One Travel, plus a flat 2 miles per dollar on all other purchases.
The Capital One Quicksilver Cash Rewards Credit Card is a decent option for those in need of a straightforward cash-back card. However, there are other options that offer more flexibility when redeeming your rewards.
The Capital One Quicksilver is best for people who use one card for everything because it has a simple, flat 1.5% cash-back earning rate. If you don't spend much in bonus categories such as dining, entertainment and groceries, or if you prefer not to juggle cards when you're out and about, then you should at least be earning more than 1% cash back on all spending with a card like the Quicksilver.
You can redeem cash back earned on the Capital One Quicksilver as a statement credit, check or gift card. There's also no minimum redemption amount — all you have to do is sign in to your account via the app or your computer and select your redemption preference.
When it comes to earning cash back with a flat earning rate on all purchases, you’ll be better off with the Citi Double Cash? Card (see rates and fees), which earns 2% on all purchases (1% when you buy and 1% as you pay) and also has no annual fee.
If you’re looking to dip your toes into the world of travel rewards, the Capital One VentureOne Rewards Credit Card is a great way to get started. With no annual fee and a simple earning rate on all your purchases, you won’t have to keep up with multiple bonus categories. You can use your rewards to book travel, transfer them to Capital One’s loyalty partners and more.
For those who want a straightforward option for earning and redeeming rewards, you can use this card’s miles to "pay" back travel purchases charged to your card in the past 90 days. If you're on the fence about paying an annual fee, you'll want to take a look at the Capital One VentureOne.
If you’re just starting out with travel rewards, simplicity is often a great policy. The VentureOne may not have a lot of bells and whistles, but you’ll earn bonus rewards on every purchase without having to pay an annual fee. Then you’ll be able to use those rewards to help cover your next vacation.
If you want more lucrative bonus categories, the Chase Freedom Unlimited? offers even higher earning rates on travel purchased through Chase Travel, dining and drugstore purchases — while still earning a flat 1.5% back on all other purchases. When paired with a Chase Sapphire Reserve? or Chase Sapphire Preferred? Card, you can also pool your points and transfer them to Chase's airline and hotel partners.
The Capital One SavorOne is a great cash-back credit card for beginners looking for a solid rewards structure and no annual fee. Dining, entertainment and groceries are high-value bonus categories, and it’s rare for a card to hit all three.
The Capital One SavorOne Cash Rewards Credit Card is a solid card with no annual fee that is great for those who regularly spend on dining and entertainment. It offers bonus rewards on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart? and Target?), making it a good option for foodies and regular concertgoers.
The Capital One SavorOne offers generous bonus categories when compared to other no-annual-fee cash-back cards (and even some cards that do have annual fees). The real highlight is the higher cash back on dining and entertainment categories, though you can also get some value with extra cash back at grocery stores.
If you want a simpler earnings rate, the Capital One Quicksilver Cash Rewards Credit Card (see rates and fees) has no annual fee and earns 1.5% unlimited cash back on all purchases, making it great if you have expenses outside of the SavorOne's bonus categories.
The Chase Freedom Unlimited is a surprisingly powerful card that earns at least 1.5% back on everything. However, it becomes a standout card if you pair it with a card that earns transferable Ultimate Rewards points, doubling their potential value.
At first glance, the Chase Freedom Unlimited seems like a tame cash-back card — but there's a lot more to it than meets the eye. With no annual fee and a simple earning structure, it's a great card for beginners. It's also an excellent card to pair with more premium options like the Chase Sapphire Preferred? Card and Chase Sapphire Reserve?, making it valuable to keep in your wallet for the long term.
“The Chase Freedom Unlimited is a great option, especially for anyone with a card like the Sapphire Preferred or Sapphire Reserve. It has solid bonus categories but also gives 1.5% back on all other purchases. And, if you have a higher-end Chase card, you can effectively convert these cash-back earnings into fully transferable Ultimate Rewards points.” — Nick Ewen, senior editorial director
If you want to earn 5% back on rotating categories, the Chase Freedom Flex? earns 5% back on up to $1,500 in combined purchases in quarterly bonus categories after you activate. Like the Freedom Unlimited, it earns rewards you can transfer to Chase's partners with the right card pairing.
Maximizing your first credit card
Pay off your monthly statement in full each month
The first key to maximizing value on your first credit card (or any credit card): Pay off your monthly statement in full to avoid paying interest. It’s the first and most important rule in our 10 commandments of credit card rewards and crucial to making sure your credit card experience is adding value to your bottom line, not subtracting from it.
Find bonus categories that make sense for you
Next, you’ll want to find a card that earns bonus points in categories where you spend the most. If your main expense is groceries, for example, find a card that earns 3 points per dollar or more at supermarkets. That said, don’t feel like you need to get the card with the most lucrative earning rates (and the highest annual fee) — just the one that makes the most sense for you and your monthly expenditures.
Get a valuable welcome offer
Lastly, virtually all of the cards mentioned here come with a welcome offer to entice new cardholders. That means if you spend a certain amount of money in a given time frame on your card — usually a few thousand dollars in your first three to six months — you’ll earn a hefty bonus amount of points or cash back. Finding a healthy welcome offer can even be key to single-handedly justifying the existence of your new card for years to come.
How we rate
What makes a good first credit card?
A good first credit card, put simply, is a card that makes sense for your lifestyle and adds a reasonable amount of value to your bottom line. For most, that’ll mean a card with a relatively simple rewards structure and no annual fee, allowing new cardholders to learn the ropes of credit card rewards. You’ll also want to find a card that you can actually get approved for based on your credit score, which will likely prohibit some beginners from getting the most premium card offerings anyway.
Types of credit cards
Once you know your credit score and have identified your heavy-spending categories, you can start sifting through credit card offers. From here, you should figure out which credit card features are the most appealing and how you plan to redeem your points.
Here are some common types of credit cards to consider:
Travel rewards cards that earn transferable rewards (think: Chase Ultimate Rewards points or American Express Membership Rewards points) offer the ultimate flexibility in terms of redemptions, which often translates to the most value for travelers. These cards also often offer generous bonuses in everyday spending categories, such as transportation, groceries and gas.
When redeeming points, you can often choose a statement credit, book travel through a bank’s portal or transfer points to airline and hotel partners — making these rewards extremely versatile. If you opt for a premium travel rewards card, you can even take advantage of valuable perks like airport lounge access and annual travel credits.
When you’re first starting out, going for a premium card may not fit your lifestyle and budget (given they generally have high annual fees), but they are something you can work toward after getting your first card.
Cash-back credit cards may be a good fit for people who prefer to keep things simple regarding credit card rewards. There are no rewards programs to learn, and you never have to worry about a card issuer devaluing your rewards. Plus, cash rewards allow you to spend your earnings on anything you like.
Cobranded airline and hotel credit cards are ideal for people loyal to a specific program (for example, if you only fly American Airlines, it might make sense to have an American Airlines cobranded credit card). These cards offer brand-specific benefits that can make your travels a little more comfortable.
With airline cards, you can expect free checked bags, discounts on inflight purchases and possibly even progress toward elite status. On the other hand, hotel credit cards usually offer mid-tier elite status, resulting in perks like room upgrades, free breakfast and bonus points on paid stays.
How to build credit with your first card
Whether you're planning to apply for your first travel rewards credit card or preparing to buy your first home, having good credit matters.
The condition of your credit score can mean the difference between qualifying for financing or having a lender deny your application. Your credit could also determine whether you can receive affordable interest rates and attractive financing offers or whether you have to pay more to borrow money.
Credit cards are actually a great way to build up your credit for the future — so long as you manage them responsibly. Be sure to pay off your statement in full each month, as mentioned above. Having debt is the No. 1 way to diminish or put a limit on your potential credit score, and carrying a balance on your credit card can negatively affect your credit score.
Monitor your credit utilization ratio, which is the amount of your afforded credit you’re making use of relative to your credit limit. If you do have to carry a balance, try to only make use of 20%-30% of your monthly credit for best results.
Keep an eye on these two factors, among other things, to start steadily building your credit score.
How to choose the best first credit card
- Find a card that offers a decent sign-up bonus at an achievable spend threshold within your budget. You'll want a card that kickstarts your rewards journey with a nice boost in whichever currency you decide upon — points, miles or cash back.1Sign-up bonus
- Consider how much you're willing to pay each year to hold your card. There are also many card options that don't require an annual fee. Keep in mind that cards with higher annual fees also tend to come with more benefits and perks, as well as higher earning rates across the board.2Annual fee
- The credit card best for you to start out with is likely one that earns a generous rate in your most frequent spending categories. For instance, if you love eating at restaurants, perhaps a card that earns extra in a dining category would be the best option for you. If you want to earn more rewards on travel, look into a card that earns more within that category.3Bonus categories
Ask our experts
What's your favorite first credit card — and why?
Pros + cons of first credit cards
Pros
- Obtaining a credit card and using it responsibly can help build your credit score
- Credit cards can earn cash back, points or miles on every dollar you spend
- Credit cards can provide various protections, including purchase, theft and fraud
- Many credit cards provide perks such as travel insurance, complimentary hotel stays and more
Cons
- Credit cards can encourage overspending
- Using your first credit card irresponsibly and carrying a balance can damage your credit score
- The cost of borrowing on credit cards is higher than traditional loans
- Having too many card applications can negatively affect your credit score
Frequently asked questions
Using your debit card has virtually no point — pun intended.
You’re spending money and not getting anything back in return. For all the money you spend on food, clothing, skincare, workout classes, transportation and everything else in your life, you could be earning valuable rewards toward your next vacation or toward cash back that helps you save money.
It’s not going to happen overnight, but we promise the points really do add up. Plus, one day, you may want to get a house or a car, and we guarantee that you will be asked for your credit score.
Applying for your first real credit card is a big step toward financial freedom, and it’s also a way for you to start racking up valuable points and miles that you can use to start traveling the world for little to no out-of-pocket cash.
Travel credit cards can help you earn points and miles. In other words, these pieces of plastic (or metal) are putting you one step closer to a (mostly) “free” trip to your dream destination, wherever that might be.
There are many ways to pick up points and miles, from flying on airlines and staying at hotels to using online shopping portals when making online purchases. However, the most lucrative way is through sign-up bonuses and welcome offers on credit cards. Cards often offer new cardholders a way to earn a sizable bonus usually worth hundreds (if not thousands) of dollars in exchange for spending a certain amount of money on your new card in a certain amount of time.
Good credit cards will also offer bonus points for spending on certain categories of purchases. For example, if you get 3 points per dollar on dining and your dinner costs $15, you’d earn 45 points. Those 45 points won’t get you anywhere by themselves, but they do add up over time.
Of course, points and miles aren’t the only reason why having credit cards is important for your overall financial health. Credit cards offer fraud protection in case your card details are compromised, and they also help you build credit.
As an authorized user, you’re added to a primary credit card holder’s account. You’ll receive a card with your name on it linked to the main account holder’s card. You can then use this card like they would their own — and some of the best cards for authorized users even offer perks for the authorized user, too.
When you are an authorized user, it helps you build up your credit history before applying for your own credit card. Just keep in mind that any charges you make are the primary account holder’s legal responsibility. So you’ll need to make arrangements for how you’ll pay off your account, how much you can spend each month and more.
We live in a world where credit scores have a huge impact on your financial life. Your credit report (which includes your payment history, accounts and more stats about your borrowing history) and credit score are what lenders look at when deciding to approve you for new lines of credit.
This includes mortgages, small-business loans, car loans, credit cards and possibly even apartment rentals. The better your score, the more likely you are to be approved — and the better your interest rates on accounts.
Credit cards aren’t the only way to build credit, but they are the easiest. And while we’re a bit biased here at TPG, it’s also one of the most rewarding and fun ways to build credit. How many people can say they are helping their long-term financial health while also funding their next tropical getaway?
If you pay off your credit card every month, you don’t have to worry about interest charges piling up. However, sometimes things happen and you end up carrying a balance on your card — at least for a few months. In those cases, it’s important to understand what your APR is and how much interest you’ll be charged on your card.
When you carry a balance, your credit card issuer will charge you a percentage of that each month until you pay off your card. The amount of interest you are charged is based on the credit card’s annual percentage rate, or APR.
Typically speaking, a card will advertise a variable APR that is listed as a range. Variable means that your rate can change over time based on an index interest rate — such as the prime lending rate that’s determined by the Federal Reserve Board (commonly referred to as “the Fed”). The better your credit score, the lower your APR on your credit card will likely be.
However, if you follow our advice and pay your balance in full and on time every month, the APR on your card will never come into play.
At the end of the day, having a credit card is the equivalent of borrowing money (even if you pay that money back at the end of each month). Because of this, there are restrictions in place to make sure you are old enough to understand and manage the consequences of having a line of credit open in your name.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 states that if you aren’t at least 21 years of age, you can be subjected to additional qualification rules, such as showing you can independently repay charges (as opposed to your parents paying while you are in college). So, if you aren’t old enough to buy a glass of wine at dinner and don’t yet have the ability to pay off your bills on your own, you may not yet be able to open one of these rewards cards.
However, you can apply for a credit card at 18 years old if you have a co-signer or can provide proof of your own income to your issuer. If you are under 18, the only way to start building credit is by becoming an authorized user on someone else’s account.
If you’re a parent, adding your children as authorized users to your credit cards will help them build a credit history and will (hopefully) lead to better credit scores as they transition to adulthood.
We know there are many options out there, and it can be hard to find your Cinderella slipper when it comes to a first credit card. However, no matter how you start your points and miles journey, these cards can help you earn rewards without getting overwhelmed with complicated card details.
There’s no need to go straight to the big leagues with a premium travel credit card just yet. Start small and build your credit, and we promise these points will add up faster than you can say “award redemption.”