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Update: Some offers mentioned below are no longer available. View the current offers here – Bank of America Cash Rewards credit card, Bank of America Travel Rewards credit card, Citi ThankYou Preferred Card for College Students, Citi ThankYou Preferred 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.
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:
- Are Cards a Surefire Way to Get Into Debt?
- Does Applying for a Card Permanently Impact My Credit Score?
- Is a Debit Card Better for Your Credit History?
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. The rest of this post will help you do just that. 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
- Chase Sapphire Preferred Card
- Citi Double Cash Card
- Blue Cash Everyday® Card from American Express
- Bank of America Cash Rewards credit card
- Bank of America Travel Rewards credit card
- Capital One VentureOne Rewards Credit Card
- Citi ThankYou Preferred Card for College Students
Sign-up bonus: 50,000 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 (waived for the first year)
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. It also waives the annual fee for the first year, giving you a full 12 months to decide if the card is worth keeping. 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
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
Current bonus: Earn $150 back after you spend $1,000 in purchases on your new card in your first 3 months. You will receive the $150 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
4. Bank of America Cash Rewards credit card
Sign-up bonus: $150 online cash rewards bonus if you make at least $500 in purchases in the first 90 days of account opening
Earning rates: 3% back at gas stations and 2% back at grocery stores and wholesale clubs (for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter); 1% back everywhere else
Redemption options: Cash back
Annual fee: None
A third cash-back option comes from Bank of America. Like with the Blue Cash Everyday, you have enhanced earning rates at certain merchants, and you’re again avoiding an annual fee. 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 cash 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.
Good for: Current Bank of America customers
5. Bank of America Travel Rewards credit card
Sign-up bonus: 20,000 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 $200 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.
As a current Bank of America customer, you’ll enjoy the same 10% – 75% bonus outlined above, but these bonuses are granted in the form of additional points rather than cash back. 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
Sign-up bonus: Earn 20,000 miles once you spend $1,000 on purchases within the first 3 months from account opening.
Earning rates: 10 miles per dollar spent on Hotels.com purchases; 1.25 miles per dollar spent on every purchase
Redemption options: Statement credits toward travel purchases
Annual fee: None
Another option that takes you a step further than cash-back rewards is the Capital One VentureOne card. The card has many similarities to the prior Bank of America one, including a 20,000-mile sign-up bonus, no annual fee and waived foreign transaction fees.
It also comes with the fantastic new perk of 10 miles per dollar spent at Hotels.com. When you stack that earning rate with the Hotels.com Rewards program, you’re looking at a return of 20% on these purchases. This card is also a Visa Signature card, giving you a host of additional benefits to utilize.
Good for: Those interested in travel rewards; those who frequently book hotels; those who travel internationally
7. Citi ThankYou Preferred for College Students
Sign-up bonus: 2,500 points after spending $500 in purchases within the first 3 months of account opening
Earning rates: 2 points per dollar spent on dining out and entertainment; 1 point per dollar spent everywhere else
Redemption options: Gift cards, electronics, Amazon.com purchases
Annual fee: None
The final card on my list is specifically targeted for a demographic that is (by definition) relatively new to the credit card market: college students. If you’re thinking about picking up your first credit card and want one that’s easy to use, consider the ThankYou Preferred for college students (which is different than the standard Citi ThankYou Preferred Card, which incidentally could be another good option as a starter card).
You’ll earn double points when you eat out and on entertainment, including:
“live entertainment, live theatrical productions, concerts, live sporting events, movie theaters, amusement parks (including zoos, aquariums, circuses and carnivals), tourist attractions (including museums, and art galleries), record stores, video rental stores and on-demand internet streaming media.”
These points can then be redeemed for a variety of gift cards at a rate of 1 cent per point, giving you valuable flexibility in deciding what you want to purchase.
Good for: College students with limited credit history
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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With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards