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Are you looking for the best beginner credit cards? This article has you covered! You’ve probably heard about these travel hackers who get free premium flights and hotel stays, and now, you want in on it too.
But before you do that, you need to know that using credit cards is like riding a bicycle for the first time – you need training wheels to learn how to use it, or else, you’ll crash and fall.
When getting credit cards, you don’t immediately apply for top-tier business cards because these can be complicated for beginners. You need to choose low-risk credit cards which typically have the following features or characteristics:
Easy Approval – Personal credit cards are the easiest ones to get approved for, even if you have little to no credit history at all. Beginners must go for these cards to slowly build up their credit score, and eventually apply for top-tier cards in the future.
No Annual Fees – The annual fees of premium credit cards can cost between $90 – $600, and that’s a lot of money. The Amex Platinum for Business has an annual fee of $595 and is one of Amex’s credit cards that has the most expensive annual fee. It’s just practical for beginners to get no-annual-fee cards since you’re still trying to learn how credit cards work.
Has Perks & A Rewards Program – Credit card companies offer incentives to clients to get them to sign up and the rewards you’ll earn will depend on the type of credit card you get. Some companies have sign-up bonuses, warranties on goods and services, partner merchants discounts, free flights, or free hotel stays. There are also cashback cards that let you earn cashback if you spend on eligible categories. The key is to look for rewards programs that match your spending habits.
0% APR Periods – APR Periods or Annual Percentage Rate is the interest rate charged by the company for borrowing money from them. Look for 0% APR cards because this means you can purchase goods and services without interest. These intro periods usually last between 12-24 months, depending on the card.
What Are The Top 3 Best Beginner Credit Cards?
1. Chase Freedom
Some might say that the Chase Freedom card isn’t suitable for beginners, but we beg to differ. The card does not have an annual fee (for life), and currently, they’re offering a $200 bonus after spending $500 within the first three months of getting the card. Welcome bonuses are subject to frequent change.
Chase Freedom offers 5% cashback, but the cashback is earned on rotating categories that change every quarter. For other purchases not included in the categories, you’ll earn 1% cashback.
New cardholders will also get an introductory 0% APR period for 15 months. This feature is perfect for people who want to make big purchases at zero interest. However, we advise that you leave this card back at home if you’re travelling abroad because it charges a 3% fee for foreign purchases.
2. Discover It
The Discover It Card is simple and straightforward. It’s the counterpart to Chase’s Freedom card because it too doesn’t have annual fees.
The rewards program is similar too, because it offers 5% cashback on rotating categories and 1% cashback on other purchases. There is usually no sign-up bonus for this card but occasionally there is an offer only up to $50. However, Discover will double the cashback you’ve earned for the entire year. For example, if you’ve earned $500, you’ll get an additional $500 at the end of the year.
It also has an introductory 0% APR for a term of 14 months, and it does not have foreign transaction fees.
3. Discover It Miles
You’re probably asking, “what’s the difference between Discover It and Discover It Miles?” Well, it’s the rewards program. Discover It Miles is a travel credit card where you’ll earn 1.5 miles for every dollar you spend on any expense. Discover will also double the miles you’ve earned throughout the year.
It’s perfect for travelers because it doesn’t have annual fees or foreign transaction fees. There’s also a 0% introductory APR for 14 months, and you’ll get a free $30 in-flight WiFi credit. The only problem that you might encounter is that not all merchants accept Discover compared to Visa and Mastercard.
What Points Panda Recommends
Getting your first credit card doesn’t have to be a frustrating experience. You need to understand what each card offers and match that to your spending capabilities and habits. For most people, these are the best beginner credit cards that will help you learn how travel or points hacking works. They’re also low-risk cards that are easy to get approval for so you can slowly build your credit history.