7 Great Picks for Your First Credit Card

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Update: Some offers mentioned below are no longer available. View the current offers here – Bank of America Travel Rewards credit card

Whether you’ve decided to dive into the points and miles hobby or are just interested in opening a card to start building your credit, there’s definitely a learning curve. The most important way to start the learning process is by selecting a first credit card so you can start building up that credit score and even earn rewards toward “free” travel.

Unfortunately, the decision of which card to open first is often fraught with confusion. What if you don’t have an extensive credit history? Won’t opening a new credit card annihilate your credit score? And most importantly, how do you select the best one?

If you’re looking for guidance, you’ve come to the right place. Today I’m going to highlight 7 terrific options for starter cards. These picks are especially great for those interested in award travel, but there are also some strong cash-back options for those of you who simply want to maximize your spending without jumping through hoops.

Building Credit

Before we get to the list, though, a quick primer on the relationship to your credit profile and credit cards. Let’s start with your FICO score. This number is a numerical representation of your trustworthiness when it comes to money you have borrowed (be it a car loan, mortgage or line of credit). The lower the score, the more likely you are to default on an account, leading lenders to either increase your cost of borrowing through higher interest rates or fees or simply deny you additional credit outright.

There are many misconceptions and complexities to determining your exact score, but one thing is certain: Opening and responsibly using a credit card is one of the best ways to increase your credit score in the long run.

Sure, a new account will trigger a hard inquiry and a temporary ding to your credit score, but the benefits of the new card will quickly outweigh this small dip. This is largely due to the fact that it will build your credit history. How else will a potential lender know that you can be trusted? If you show a pattern of spending within your means and never miss a payment on a credit card, your score will only climb in the long term.

We’ve written extensively about credit scores here at The Points Guy, so if you’re not yet convinced, check out the following posts on debunking credit card myths:

Details to Consider

Once you’ve overcome the hurdle of deciding that it makes sense to open a new credit card, the next step is actually picking the specific card you want. Picking your first card requires a fine balance between a valuable welcome bonus and strong perks, but also a manageable annual fee and rewards that you’ll be able to redeem easily. For each of the 7 options below, I’ll highlight the following key attributes:

  • Welcome bonus
  • Earning rates
  • Redemption options
  • Annual fee

I’ll then provide some narrative around the overall value proposition and finish up with a notation of exactly who would be ideally suited for that particular card.

As always, please feel free to post and questions in the comments section below and we’ll be happy to answer them!

So which cards make my list of the best starter credit cards? In no particular order:

Best First-Time Credit Cards

1. Chase Sapphire Preferred Card

Sign-up bonus: 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first 3 months from account opening
Earning rates: 2 points per dollar spent on travel and dining purchases; 1 point per dollar spent everywhere else
Redemption options: Transfer points to one of 13 transfer partners; redeem points directly through Chase’s travel portal at a rate of 1.25 cents apiece
Annual fee: $95

Whenever a friend or family member asks for a first credit card recommendation, the Sapphire Preferred is the first one that comes to mind. Ultimate Rewards points regularly appear near the top of TPG’s monthly valuations thanks to the valuable transfer partners like Hyatt and United, but the card also allows for redemptions directly through Chase at a rate of 1.25 cents apiece. This combines simplicity with the potential for future, more valuable redemptions as you learn more about redeeming points for maximum value.

The card also includes additional perks like primary car rental coverage, trip delay protection and no foreign transaction fees. For complete details on this card, check out our review.

Good for: Those who want to immediately dive into the points and miles hobby; those who want flexibility with their points

2. Capital One Venture Rewards Credit Card

The Venture Card from Capital One now offers an astounding 10x miles on Hotels.com purchases.

Sign-up bonus: Earn 50,000 miles once you spend $3,000 on purchases within the first 3 months from account opening.
Earning rates: 10 miles per dollar spent on Hotels.com purchases when booked and paid with card via Hotels.com/venture; 2 miles per dollar spent on every purchase
Redemption options: Transfer to 14 airline partners or redeem for statement credits toward travel purchases
Annual fee: $95 (waived for the first year)

The Capital One Venture Rewards Card offers an almost unheard of combination of fixed-value redemptions and flexible, transferable points. After earning a 50,000 point welcome bonus which is guaranteed to net you a minimum of $500 worth of free travel, you have two choices for how to redeem your points. You can redeem your points for one cent each as a statement credit towards any eligible travel purchase made in the last 90 days (hence the $500 value of your bonus), or you can transfer them to one of 14 airline partners spanning all three major airline alliances and a few non-alliance carriers as well. Based on this broad selection of redemption options, TPG decided to value these newly transferable miles at 1.4 cents each, making your bonus worth as much as $700. The best part? You don’t have to commit to one style or the other. You can rack up a large number of points and pick and choose whether you’ll transfer them or redeem them for a fixed value for each individual trip you take.

The Venture card earns 2x miles on all purchases, meaning you’ll rack up your points at a fast clip. The only exception to this is purchases at hotels.com, where you’ll earn a whopping 10x miles if you book at hotels.com/venture and pay with your Venture Rewards card.

Good for: Those looking for easy redemption options while they continue to learn about travel rewards; those who frequently book hotels; those who travel internationally

3. Citi Double Cash Card

Prefer cash back in your pocket? Consider the Citi Double Cash and it’s effective return of 2% on every purchase.

Sign-up bonus:  No welcome bonus
Earning rates: 1% cash back when you buy, plus an additional 1% cash back as you pay
Redemption options: Cash back
Annual fee: None

My mother-in-law likes to say that cash is king, and if you aren’t interested in dissecting award charts or even the hassle of figuring out how to redeem your points or miles for travel, the Citi Double Cash Card is a terrific option. By earning 1% back when you buy and another 1% back when you pay, you’re essentially getting 2 cents back for every dollar you spend. It’s simple and straight-forward, with no bonus categories to worry about and no annual fee either. The card does incur a 3% foreign transaction fee when used abroad, but if the majority of your spending is within the US, this is a great starter card.

Good for: Those who want cash; those who value simplicity

4. Blue Cash Everyday Card from American Express

Current bonus: Earn $200 back after you spend $1,000 in purchases on your new card in your first 3 months. You will receive the $200 back in the form of a statement credit.
Earning rates: 3% back at US supermarkets (up to $6,000 per year in purchases); 2% cash back at US gas stations and select US department stores; 1% cash back on other purchases
Redemption options: Cash back
Annual fee: None (See Rates & Fees)

Another flavor of cash-back starter cards is the Amex Blue Cash Everyday. This is a good option if you want to dip your toes into bonus categories or if you typically spend a lot at grocery stores, gas stations and department stores each year. It also includes a variety of added perks like Purchase Protection and complimentary ShopRunner membership.

Like with the Citi Double Cash, you will pay a foreign transaction fee (2.7%) when used outside the US, but with no annual fee, a decent welcome bonus and enhanced earning potential at certain merchants, this too makes for a solid starter card.

Good for: Those with large grocery purchases; those who want additional coverage and protection

5. Chase Freedom Unlimited

Sign-up bonus: Earn $150 after spending $500 in the first 3 months
Earning rates: 1.5 points per dollar spent on all purchases
Redemption options: Cash back, can transfer points to airline and hotel partners if you also hold a paid Chase Ultimate Rewards card such as a Sapphire or Ink
Annual fee: None

The Chase Freedom Unlimited is a great starter card thanks to its lack of annual fee and consistent 1.5% return on all purchases with no caps or bonus categories to worry about. If you’re only looking for cash back and are planning on sticking to a single credit card, obviously you’d be better off with the 2% of the Citi Double Cash. The Freedom Unlimited really shines, however, when paired with a Chase Ultimate Rewards earning card such as the Sapphire Reserve, Sapphire Preferred or Ink Business Preferred. The cash back earned on the Freedom Unlimited comes in the form of ‘points’ worth one cent each, but if you hold one of the aforementioned cards you can convert these cash back points into full fledged Ultimate Rewards points and transfer them to Chase’s excellent collection of airline and hotel partners. Since TPG values Ultimate Rewards points at 2 cents each, this automatically doubles you return and makes the return on everyday spending with the Freedom Unlimited an impressive 3%.

6. Bank of America Travel Rewards Credit Card

Sign-up bonus: 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening — which can be redeemed for a $250 statement credit toward travel purchases.
Earning rates: 1.5 points per dollar spent on all purchases
Redemption options: Statement credits for travel purchases (1 point = $0.01); cash back or gift cards (lower value)
Annual fee: None

Of course, you may be looking for more “exciting” options beyond simple cash-back credit cards, and if so, Bank of America’s Travel Rewards card could be a good fit. The program allows you to redeem your points for statement credits toward travel purchases at a fixed rate of 1 cent per point, and this applies not only to flights and hotels but also to cruises, rental cars and even baggage fees.

However, the biggest benefit of this card is extended to current Bank of America customers. You’ll enjoy an extra 10% customer bonus when you redeem your rewards back into an eligible Bank of America checking or savings account, and you can boost that bonus to up to 75% if you’re a Preferred Rewards client. These perks make it a great option for those who currently do business with the bank. In addition, the card waives foreign transaction fees despite incurring no annual fee, making it a terrific choice for those who travel outside the country even just once a year.

Good for: Current Bank of America customers interested in travel rewards; those who travel internationally

7. The Amex EveryDay® Credit Card from American Express

Sign-up bonus: 10,000 Membership Rewards points after spending $1,000 in the first 3 momths
Earning rates: 2x points at US supermarkets (up to $6,000 per year in purchases), 1x on all other purchases. Earn a 20% points bonus when you make 20 or more transactions in a single billing period
Redemption options: Transfer to Amex’s collection of hotel and airline partners
Annual fee: None

The last card on this list is relatively unique, in that it’s the only personal (i.e. not business) credit card to earn transferable bank points without charging an annual fee. This makes the Amex EveryDay Credit Card a great way to dip your toes into travel rewards without ponying up the hefty annual fees that many cards now carry. The double points on your first $6,000 of spending each year at supermarkets is nice, but the 20% points bonus each billing period you make 20 or more purchases is a really unique perk. This bonus applies to all the points you earn, not just “base” points, so it brings your earning at grocery stores up to 2.4x

If you like this earning model but are looking for a little bit more, you can opt for the Amex EveryDay Preferred card instead. While you’ll pay a $95 annual fee, you’ll earn 3x points at US supermarkets (again on your first $6,000 of purchases a year), 2x at US gas stations, and 1x everywhere else. Your monthly multiplier also gets upped to a 50% bonus every billing period that you make 30 or more transactions. If you can meet this target month after month, you’ll end up earning 4.5x at grocery stores and 3x at US gas stations, as well as a baseline 2x on everyday spending.

Good for: Those looking to earn transferable points without paying an annual fee

Bottom Line

Getting started in the world of credit cards can seem like a daunting task, but it doesn’t need to be that way. No one is going to be an expert on day one, especially if you’re looking to maximize your spending with the hopes of earning travel rewards, but it’s important to start somewhere, and picking a good first card from this list is a great way to do just that. Hopefully this post has helped you narrow down your list to make a final decision!

For rates and fees of the Blue Cash Everyday Card, please click here.

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More Things to Know
  • Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
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  • $550 annual fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
N/A
Annual Fee
$550
Balance Transfer Fee
See Terms
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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.