Choosing Your First Credit Card

Opening your first credit card is a major financial milestone—and an important step toward building your credit profile. For many of us, credit cards can seem overwhelming at first. With so many offers, fine print, and flashy perks, it’s not always easy to figure out which card is the right fit for your lifestyle and goals.

If you’re ready to take the leap, here are the key things to consider when choosing your first card—without getting lost in the jargon.

1. What Type of Credit Card Do You Need?

Why do you want a credit card? Are you aiming to build credit from scratch? Earn rewards on your spending? Start managing your finances more independently? Consolidate debt?

There are a few different types of credit cards that emphasize different features:

Rewards cards: These are for shoppers who are looking to maximize cash back on regular purchases. The key word being regular – the best way to get the most out of a rewards card is by using it often enough to actually earn rewards. There are many types of rewards cards that can offer benefits or cash-back on things from everyday purchases, like groceries, to flights and travel.
Travel cards: Travel cards are arguably a type of reward card but really they deserve their own category. Travel cards not only offer rewards on purchases associated with travel but the rewards themselves could be perks like exclusive access to airport lounges or hotel accommodations.
Balance transfer cards: If you’re looking to consolidate debt, this would be the type of card you’d want. Balance transfer cards offer the lowest fees on balance transfers and may even come with the added perk of a 0% APR intro period. If you have debts that you need to pay off and you want to consolidate them to one payment and maybe fine time to defer paying them, a balance transfer card is a good option.
Student cards: Designed for college students, these typically offer lower credit limits and basic rewards, making them ideal for building credit gradually.
Secured credit cards: These require a refundable deposit (usually $200–$500), which serves as your credit limit. Secured cards are a great option if you don’t have any credit history yet. (Or if you’re trying to rebuild your credit).
Starter unsecured cards: Some lenders offer unsecured credit cards specifically for people new to credit. These may come with fewer rewards and a lower limit, but they don’t require a deposit.

For most first-time cardholders, the primary goal is to establish a solid credit history. A strong credit score can benefit you down the road when applying for loans, renting an apartment, or even job hunting. As a first-time applicant, you likely won’t qualify for premium cards with high spending limits or luxury perks—and that’s fine.

There are several beginner-friendly options tailored for people just starting their credit journey. Student credit cards or a secured credit card are both great places to start.

Remember, you’re not locked in forever. As your credit history grows, you’ll become eligible for better offers over time.

2. Look for a Card with No Annual Fee

When you’re new to credit, it’s usually best to avoid cards that charge an annual fee. While premium cards may offer valuable rewards or travel benefits, those perks likely won’t be worth the cost if you’re not spending enough to take full advantage of them.

There are plenty of no-annual-fee cards that still provide useful features like cash back, fraud protection, and credit tracking tools. Stick with something low-cost and straightforward until you’re more experienced.

3. Pay Attention to the APR (But Plan to Avoid It)

APR, or Annual Percentage Rate, is the interest rate you’ll be charged if you carry a balance on your card. While it’s important to know what the rate is, the best approach is to pay off your balance in full each month, which helps you avoid interest entirely.

That said, unexpected expenses happen. If you think you might occasionally carry a balance, choose a card with a lower APR or one that offers an introductory 0% APR period.

4. Be Mindful of Your Credit Limit and Utilization

Your credit limit is the maximum amount you’re allowed to charge to your card, but it’s wise to avoid maxing it out. A good rule of thumb is to use no more than 30% of your limit at any given time. This is known as your credit utilization ratio, and it plays a significant role in determining your credit score.

For example, if your limit is $1,000, try to keep your balance under $300. Staying well below your limit demonstrates responsible usage and helps improve your credit standing over time.

5. Don’t Let Rewards Distract You from Your Goals

It’s tempting to choose a card based on flashy rewards—cash back, airline miles, restaurant points—but rewards only provide value if you’re avoiding interest and paying off your balance consistently.

As a first-time cardholder, your primary focus should be building credit, not chasing points. Once you’ve developed strong habits, you can explore more advanced cards with tailored benefits that match your lifestyle.

6. Read the Fine Print

It may not be the most exciting part of getting a credit card, but reading the terms and conditions is essential. Pay special attention to:

The APR (both regular and introductory)
Late payment penalties
Annual or hidden fees
Rules around rewards redemption
Foreign transaction fees, if you travel

Understanding the full picture will help you avoid unpleasant surprises and make informed decisions.

7. Choose a Card That Aligns with Your Spending Habits

Not all credit cards are created equal, and the best card for someone else may not be the best fit for you. Consider your current spending patterns—do you dine out frequently, shop online, commute by car, or travel often? Look for a card that complements your typical expenses and offers rewards in those areas (if applicable).

8. Monitor Your Credit from Day One

Once you start using your credit card, keep an eye on your credit score and account activity. Many credit card issuers offer free credit score tracking as part of their service, and there are also free apps that allow you to monitor your score and credit report. (You can also check your score for free at Credit.com!)

Building good credit takes time, but watching your score steadily rise is a great motivator—and a sign that you’re on the right track.

What is the best credit card?

The best credit card is the one that you can afford and ideally provides additional benefits beyond just offering a line of credit.

Generally, a great credit card:

Won’t have an annual fee
Offers a 0% APR intro rate
Will offer rewards or cash back that align with your regular purchasing habits
Has a lower interest rate

That being said, the best credit card for you may not offer one or all of the features in the list above. Although the huge list of available credit cards may seem intimidating, the benefit is that it’s likely you’ll find something that aligns well with what you need.

So take the time to research your options, choose a card that fits your needs, and use it responsibly. By keeping your spending in check, paying on time, and understanding the terms of your card, you’ll not only build strong credit, but also develop habits that will serve you well for years to come.

Welcome to the world of credit. You’re off to a smart start.