What to Look for in Your First Credit CardWhether you’re a young adult still in school or someone who’s always gotten by on cash and debit, trying to find your first credit card can be stressful. The world of credit cards is filled with all kinds of different offers, and not all of them are that useful for a first-timer. If you’re searching for your first credit card, we’ve compiled a handful of features that are useful, easy to understand and able to help smooth out some of the rough edges that come with your inaugural credit card experience. To see what you should look for in your first credit card, and some examples of good cards to start with, keep reading.

Rewards

One of the best things about using credit cards is earning rewards for making purchases. By using a credit card to make purchases you’ve already budgeted for, you can stay out or debt and earn cash back, points or miles on purchases you were already planning to make. If you’re new to credit cards, though, some rewards systems can be pretty confusing, with different ways to earn depending on what you’re buying and a plethora of options for how you can choose to redeem your rewards. So, for your first credit card you should stick with a reward system that’s easy to understand, and the simplest reward system available is cash back. Cash back gives you a percentage of the money you charge to your credit card back as a reward, and you can often redeem your earned cash back for things, like statement credits to cover purchases you’ve already made, gift cards, merchandise, a direct deposit into your bank account or even travel, depending on the card. Some cash back credit cards have category bonuses, such as the Capital One Savor Cash Rewards Credit Card, which earns 4% cash back when you use it for dining, entertainment, along with 2% cash back at grocery stores, while others earn a flat amount of cash back on all purchases no matter what you buy, like the Wells Fargo Cash Wise Visa Card, which earns 1.5% cash back on all purchases. For your first credit card, you may want to stick with a flat-rate cash back card. Once you get a good idea of your own credit card habits, then it’ll be easier to find a category bonus rewards card that fits you well.

To add to your potential rewards, you may also want to look for a card with a sign-up or intro bonus. Credit card sign-up bonuses can give you a large sum of rewards shortly after you open your card, as long as you meet certain spending requirements. Some spending requirements are quite high (e.g., the Capital One Savor Cash Rewards Credit Card requires cardholders to spend $3,000 on purchases in the first 3 months to earn $500 back), but it’s not hard to find cards that only ask you to spend several hundred or a thousand dollars over a few months in order to earn their bonuses, like the Wells Fargo Cash Wise Visa Card’s $200 bonus that you can earn after spending $1,000 on purchases in the first 3 months.

APR

A credit card’s annual percentage rate, or APR, is the percentage of any balance you carry that you will have to pay as interest, expressed as a yearly rate. The lower the APR the better, although contrary to what some people believe, you can avoid paying credit card APR completely if you pay off your entire balance each billing cycle. Ideally, you’ll use your credit card the same way you would use a debit card: if you don’t have the money to pay for something, you’ll hold off on buying it. You can help yourself out by getting into the habit of paying off your purchases immediately after you make them instead of altogether at the end of the billing period when your statement comes due — American Express (a NextAdvisor advertiser) helps encourage this behavior in its customers with the Pay It Plan It feature. Many credit cards offer new cardholders 0% intro APR for purchases, which means for a specific time period (e.g., 12 months), you won’t accrue any interest on any unpaid balance you carry over from one billing cycle to the next. This can be a great perk, especially if you’re new to using credit cards, but it’s important not to use 0% intro APR as an incentive to spend recklessly. This is a bad habit to get into that often leads to getting swamped in debt. Instead, think of it as a safety net — just in case — and plan to pay off your purchases within the 0% intro APR period or sooner to avoid any interest.

Perks

Many credit cards provide an assortment of extra benefits that cardholders can take advantage of, though a lot of people aren’t aware of the perks their cards provide and thus don’t use them. While some cards’ perks are fairly situational, such as rental car coverage, there are some more general card benefits in particular that you can look for in your first credit card, including:

  • Late payment forgiveness, which lets you avoid the fee for the first late payment you make, is extremely helpful for a first-time credit card user, as paying off your card regularly is something that can take some getting used to. Penalties for late payments can include fees up to $35 and a penalty APR, which dramatically increases your interest rate until you make several months of timely payments in a row. Some credit cards advertise no penalty APR, so you can look for that as well.
  • Another useful perk to look for is free credit scores, since keeping tabs on your credit can help you watch your progress (and spot any major red flags, like a sudden crash in your score) and determine when you might qualify for certain card offers once you’re ready for a second card. If your credit scores aren’t great and you opt for a secured credit card to get started with credit cards, you will want to ensure that it offers three-bureau credit reporting, which means that all of your payments will be reported to each of the three credit bureaus on a monthly basis – this helps improve your credit scores across the board.
  • Fees are never fun, but first-time credit card owners are especially unlikely to be jazzed about paying money just to own their credit card. Fortunately, many great credit cards don’t charge an annual fee. If there are other fees you’re worried about, such as foreign transaction fees for using your credit card outside the U.S., you’ll want to read the cardholder agreement carefully to find out what kinds of charges you might incur.

Beyond these fairly standard perks, many credit cards offer a handful of card- or issuer-specific perks that can enhance your experience as a cardholder. For example, many of Wells Fargo credit cards offer free mobile phone protection to cardholders so long as they pay their cell phone bill with their credit card. Discover, on the other hand, is well-known for its free social security monitoring. And student credit cards are designed with some specific features that suit the needs of those living the student lifestyle. You can learn all about the different perks offered by a credit card by reading through our reviews of the best credit cards or reading out top choices below.

Which credit card should I choose?

Ultimately, you want to choose a card that includes some of the elements we outlined above and suits your personal tastes and needs. To help you get started, here are a selection of smart picks for your first card that combine many of the desirable features we mentioned above. We should note that we didn’t include any student credit cards below, but you can see our top-rated student credit cards here.

Wells Fargo Cash Wise Visa Card

first credit cardIf you have some credit history, like you’re an authorized user on your parent’s or spouse’s credit card, the Wells Fargo Cash Wise Visa Card is a good choice, as it requires good to excellent credit (usually considered a credit score of 700 or higher) to qualify. This card earns an unlimited 1.5% cash back on all purchases and has no annual fee. If you use mobile wallets, like Apple Pay or Google Pay, you’ll earn 1.8% cash back on qualified mobile wallet purchases made with the card during the first 12 months. On top of that, when you use the card to spend $1,000 on purchases in the first 3 months, you’ll get a $200 cash rewards bonus! Although it doesn’t offer no penalty APR or waived late fees, the Wells Fargo Cash Wise Visa Card does offer a 12-month 0% intro APR on purchases and balance transfers (with an intro 3% balance transfer fee for 12 months, then it’s 5%), which allows you to figure out your budget before paying interest. The card also grants a number of useful perks, including a free Equifax FICO score each month and up to $600 in cell phone protection against covered damage or theft (with a $25 deductible per claim and a maximum of 2 claims per year) to cardholders who use their Wells Fargo Cash Wise Visa Card to pay their monthly cell phone bill.

Discover it Cash Back

first credit cardWhile Discover it Cash Back’s rewards are a bit more complicated than the Wells Fargo Cash Wise Visa Card’s, the amount of cash back you can earn with this card is impressive. You’ll enjoy 5% cash back on rotating categories every quarter you activate (up to the quarterly max, which is currently $1,500, then it’s 1% cash back) and 1% cash back on all other purchases. The bonus categories can include everything from gas and grocery stores to restaurants and even Amazon.com. You must remember to activate your 5% category bonus every quarter, but you can request regular reminder emails so you don’t forget. Additionally, instead of a sign-up bonus, this card offers a unique matching bonus wherein Discover will match all of the cash back you’ve earned at the end of your first year. This lets you earn a bonus without having to meet spending requirements, and the bonus scales with your spending, so $300 cash back in your first year will be met with an additional $300 for a total of $600 back without any hoops to jump through. New cardholders will also enjoy the 14-month 0% intro APR on purchases and balance transfers (with a 3% balance transfer fee) they’ll get with Discover it Cash Back — after the 0% intro APR expires, the variable go-to rate applies. This card also has no annual fee, no foreign transaction fees and no late fee on your first late payment. It also provides plenty of great perks, like free TransUnion FICO score every month, free identity theft protection alerts and Discover Freeze it, which lets you use a smartphone or computer to freeze and thaw your credit account if your card gets lost or stolen. Finally, the Discover it Cash Back card requires average to excellent credit (usually considered a credit score of 670 or higher) to qualify, which could be a boon for those first-time card owners who are worried about qualifying.

Prefer a travel credit card? If so, Discover it Miles is probably a perfect fit, as it earns an unlimited 1.5 miles on all purchases, has no annual fee and offers a 14-month 0% intro APR on purchases and balance transfers (with a 3% balance transfer fee) — after the 0% intro APR expires, the variable go-to rate applies.

Discover it Secured

first credit cardIf you don’t have enough positive credit history to qualify for the previously mentioned credit cards, the Discover it Secured card can help you build it up, while also serving as a fairly low-risk test to see if you can handle the responsibilities of a normal card. Discover it Secured is one of the few secured credit cards we review that earns cash back rewards, netting users 2% cash back at gas stations and restaurants (on up to quarterly maximum, currently $1,000 in combined purchases, then it’s 1%) and 1% cash back on other purchases, while charging no annual fee. Cash back earned in your first year is also eligible for the cashback match bonus. To open an account, you simply have to put down a security deposit from $200 to $2,500, which secures your line of credit, and Discover will report your payment activity to all three major credit bureaus to help you build up your credit scores. Complimentary TransUnion FICO scores every month let you keep an eye on your progress, and after 8 months, Discover will automatically begin reviewing your account to see if you can be transitioned to an unsecured line of credit and get your deposit back.

Credit cards can seem confusing at first, but once you understand some basic terms and ideas, everything clicks into place and you can start using these financial tools to your benefit. To learn even more about the world of credit cards, check out our credit card reviews and follow our credit cards blog.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.