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What Is the Best Credit Card for a First Time Applicant?

by on April 20, 2014 · 8 comments

in Beginners Series, Chase, Citi, Credit Cards, Sunday Reader Questions, Video Blog Post

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TPG reader Kashif tweeted me to ask:

@thepointsguy I’m turning 18 this week and I’m thinking of signing up for a credit card that I could pay off. What’s your suggestion for the best points card for a first-timer?”

Happy 18th birthday, Kashif!

Before you choose any card, I’d suggest checking your credit score for free at AnnualCreditReport.com. Keep in mind, though, that even if your credit score is good, a brief credit history will make it more difficult to assure a credit card company that you can/do pay your bills in a timely manner. Chances are good that instead of being approved for a premium points-earning card, you’ll be offered a more basic card.

The breakdown of your credit, or FICO, score

The breakdown of your credit, or FICO, score

There are a handful of basic credit cards that are geared towards college students and other first-time credit cardholders:

The Citi Forward is a good cash-back card that generally offers a sign-up bonus of 2,500 points, earns 1 point for every dollar spent, which you can then redeem for cash back on your statement at the rate of 1 cent per point – so your return is 1%. In addition, you can redeem your points at a rate of 1 cent each for travel through the ThankYou rewards portal. The Forward card has no annual fee, and when you stay under your credit limit and pay on time for three billing periods in a row, the bank will lower your APR for purchases by up to 2% at the rate of 0.25% every quarter, a maximum of eight times.

To simply build up your credit history, Chase Slate currently offers a 0% introductory APR on purchases and balance transfers for the first 15 months, and no balance transfer fee when you transfer a balance during the first 60 days your account is open.

Chase Freedom, is also currently offering a 0% introductory APR on purchases and balance transfers for the first 15 months and allows you to build up points without charging an annual fee. It generally offers a 10,000-point sign-up bonus when you spend $500 in 3 months, though that sometimes goes as high as 20,000 points. It also offers some great points-earning opportunities thanks to its 5X quarterly earning categories. Best of all, once you’ve established a history with the Freedom, you can apply for a more premium Chase card – such as Sapphire PreferredInk Bold or Ink Plus  – then combine the Ultimate Rewards points you’ve earned with your Freedom with the ones from your premium card and transfer them to Chase Ultimate Rewards’ travel partners, which include United, Southwest, British Airways, Hyatt and Marriott.

However, don’t necessarily give up the first time around if you’re not approved for the card you want – there are reconsideration phone lines you can call if you’re denied approval, and calling one of these is a great way to practice your negotiating skills. And remember, it’s not a bad idea to start out with a low-fee card that earns you either few or no points. Once you’ve had a credit line open for six months or more, try applying for the card that’s the next step up and ask to switch your line of credit to the new card.

For now, happy birthday again, and good luck on a lifetime of racking up points through smart and responsible credit card spending!

And be sure to check out some other posts on this subject:

Top 7 Ways For College Students To Build Credit and Rack Up Points and Miles

Ideas for Maximizing Top Travel Credit Cards for College Students

What’s The Best Travel Rewards Credit Card For Someone Young Without Great Credit?

How To Get 1.34 Cents Per Point For Travel With Chase Freedom

Let me know if you have any other questions by messaging me on Facebooktweeting me or emailing me at [email protected]

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • shay peleg

    Get amex first then CLi then you get a faster start into the big boys

  • Bart

    Definitely don’t get a card with an annual fee. As your first card, you really want this first card account open for the rest of your life, since age of accounts matters with your credit score.

  • Patrick Folger

    Also may want to look into a Store card that gives rewards ( Best Buy, Sony, etc.. ) Those places usually wont deny a first timer and its a good start. Probably wont be best for maximizing point/mile value but at least a good start for building credit. Sony has offers for 10x on PS Store purchases , 3x at quick service restaurants, movie theaters and cell phone bill, and 1x on everything else if your into gaming a card like this is good.

  • heavenlyjane

    When our kids were in college, we added them as associate card holders to some of our cards so they could benefit from our good credit. We didn’t even hand over the plastic card to them most of the time; just our own spending helped them start to build good credit. It was amazing to see their scores jump by huge amounts (+50 points in a single month).
    It was an easy way to both educate them about financial matters and set them on a path to financial well-being. Our older daughter is out of college less than a yea, and in her first job – and her credit score is only a wee bit lower than ours.

  • jrunsick

    Another good resource is to see what is on your record at creditkarma.com. A free and reliable service. You can see if there is any negative reports, etc.

  • joeypore

    The Discover It card is the way to go in my opinion for a first timer. They have a specific student version that is great for young people and has great shopping portal bonuses. Plus, they approve just about any college student that applies, and usually with a more generous credit line than Chase or Citi will.

    Disclaimer, this is my referral link for the Discover It card, and it would really help me out if you check out the card via that link… but seriously, it really is a great first card to have, and it’s one I know I’ll keep forever.

    bit.ly/1jpOO6h

  • heavenlyjane

    I second this suggestion. Discover It is unsung by most travel bloggers and I don’t understand why. We get 5% back on quarterly categories. similar to Chase Freedom but you have complete freedom in how you use the rewards. We use our rewards for Airbnb stays, and if I were younger, it would be great for hostel stays as well.

  • Brian C. Lee

    “Discover It is unsung by most travel bloggers and I don’t understand why.”

    Probably because the points can’t be transferred to FF miles or hotel points.

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