Applying for your first credit card can involve a considerable learning curve. With hundreds of card options, lots of jargon and the complexity of the US credit system, there’s a lot to learn at once.
It doesn’t help that the process feels counterintuitive: How are you supposed to build credit to get a credit card if nobody will issue you a card without credit history?
Still, there are many reasons to want a credit card, chief among them is the convenience they offer for making purchases and the ability to improve your credit score by using them responsibly. Your credit score, a three-digit number that represents your creditworthiness, can affect much of your financial life, including renting an apartment, financing a car and taking out a loan.
We’ll review everything you need to know before applying for a credit card: the basics of how credit cards work, how to pick the right card for you, how to apply and how to use your card to build credit.
Pros and cons of first credit cards
Cons
-
Can lead to credit card debt if you overspend
-
Can hurt your credit if you don’t make on-time payments
-
Typically fewer rewards and benefits than a traditional credit card
How credit cards work
First, credit cards aren’t free money. They’re a financial tool that, when used responsibly, lets you space out payments for purchases, build credit history and, in some cases, earn rewards like cash-back or airline miles.
But credit cards can be extremely easy to misuse if you charge more than you can afford to pay back by the end of your billing statement. And if you miss payments, you risk wrecking your credit score and racking up interest charges. The best way to avoid these pitfalls is to understand the basics of credit cards.
Credit card issuers and processors
To get a credit card, you must submit an application to a credit card issuer, typically a bank or credit union. If they approve your application, they’ll offer you a line of credit — essentially lending you a certain amount of money that you agree to repay. Payment processing networks, like Mastercard or Visa, act as liaisons and help facilitate payments and benefits.
Credit limits
Every card has a credit limit, which is the highest amount of money you can borrow in total. The credit card issuer typically uses your credit score and your income to determine your credit limit. So if you’re just starting out, your first credit card will probably have a low credit limit. Once you show responsible card use (paying balances on time and/or in full), you can request a credit limit increase.
Paying your credit card bill
At the end of the billing cycle — which usually lasts about a month — the credit card company will send you a billing statement that lists all the purchases you made with the card. The statement will also include a due date for the minimum payment — that’s the least amount you can pay for the billing cycle.
While paying the minimum payment will keep your account in good standing, the remaining unpaid balance will carry over to the next month, and you’ll likely start accruing interest charges on any unpaid balance.
Every card has its own annual percentage rate (APR), which is the interest and fees it charges on unpaid balances. If you miss the credit card payment due date, you may incur late fees, adding even more to your debt.
You can avoid paying interest and fees by paying your statement balance in full and on time each month. Fees and interest charges can add up quickly and prevent you from paying off your debt as quickly.
Read more: 6 Important Dates to Know for Your Credit Cards
How to pick the right credit card
With hundreds of credit cards available, picking the right credit card will depend on your current financial status, your financial goals and your lifestyle.
If you’re just starting out, you can typically build credit with a student or secured credit card. After using the card responsibly — making on-time payments and staying within your credit limit — you can typically qualify for a standard, unsecured credit card that offers rewards. Here’s what you need to know about each kind of card.
Student credit card
If you’re a college student, the best credit cards for students are typically easier to qualify than most cards and can help to build credit with responsible use. These cards usually have a smaller credit limit and may offer fewer rewards and benefits, with some exceptions.
Secured credit card
A secured card is another option for those just starting to build credit or trying to rebuild a credit score. Secured credit cards require a refundable security deposit that acts as your credit limit. If you use the card responsibly — making on-time payments in full every month — the card issuer may offer to upgrade you to an unsecured credit card with better rewards and benefits.
Rewards credit card
A reward credit card lets you earn a reward for the purchases you make with the card. Rewards can include cash-back, travel points and airline miles. Some cards let you earn welcome bonuses for spending a minimum amount within a specified period.
In exchange for more lucrative rewards, some credit cards charge annual fees — a yearly expense you pay to own the card. If you’re considering a rewards credit card, look for one that matches your regular spending habits and if it charges an annual fee, can be covered by the rewards.
Don’t overspend to earn rewards — if you carry a balance, the interest charged will likely wipe out any benefits you earn from the rewards.
How to apply for your first credit card
Once you determine which card is best for you, you can apply for a credit card by clicking on one of the links above or by going to the credit card issuer’s site.
While every credit card company has its own application, you will probably be asked to provide similar personal and financial information on each application — including your name, age, employer, Social Security number, annual income and housing payment. With this information, the credit card issuer will run a credit check to decide if you fit the criteria for card approval.
After you apply, you will either be approved or denied, although the card issuer may have follow-up questions before making a decision. If you’re denied, there are steps you can take to increase your chances of approval.
Some credit card companies will solicit you directly or allow you to see if you are preapproved for a card. Since card companies run a hard pull on your credit when you apply, which can temporarily cause your credit score to dip, preapproval lets you see if you’re likely to be approved before you undergo a credit check. Preapproval doesn’t guarantee you’ll be approved — it just means the credit card company thinks you’re a good applicant for a particular card.
How to build credit with your card
Your credit score is a three-digit number lenders use to determine how likely you are to repay what you borrow. Your score is determined by a few factors, including your payment history, amount of debt owed, length of credit history, how much new credit you’ve taken on and your credit mix.
Here are some common blunders to avoid to keep your credit score healthy:
- Not paying your minimum payment on time. In addition to being hit with late fees and interest charges, late payments reported to credit bureaus indicate to future lenders that you’re an unreliable borrower. Over time, consistently paying on time will build a strong credit history that will boost your score, making you eligible for better credit cards and interest rates.
- Using too much of your credit limit. Experts recommend you use less than 30% of your total credit line — known as your credit utilization ratio. So if your credit limit is $1,000, you should keep your balance below $300. But it’s always better to aim for less if you can.
- Closing credit card accounts. While it may seem reasonable to close an account for a card you don’t use, it can actually lower your total available credit, increasing your credit utilization ratio and shortening your credit history. If you can do so responsibly, it may be better to keep the card open and use it occasionally. But there are ways to cancel a credit card without destroying your credit.
Best picks for your first credit card
CNET’S PICK
Intro Offer
Cashback Match™
Intro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! So you could turn $50 cash back into $100. Or turn $100 into $200. There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
The Discover it® Student Cash Back* card offers the best rewards spread of student credit cards. You’ll earn the 1% flat rate on all purchases, but you can also earn 5% cash back with the bonus quarterly rotating category, on up to $1,500 in combined spending per quarter (then 1%).
For April through June, it includes gas stations and electric vehicle charging stations, home improvement stores, and public transit. You have to manually activate these bonus categories through your account to earn this higher rate, though.
We also like that this card offers an Unlimited Cashback Match™ welcome bonus — Discover will match your cash back earned for your first year, essentially doubling your cash back at the end of your first year.
For more details, see our full review of the Discover it Student Cash Back.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- 0% for 6 months
- Regular APR
- 18.24% – 27.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
5%
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases-automatically.
1%
Earn unlimited 1% cash back on all other purchases – automatically.
The Discover it® Student Cash Back* card offers the best rewards spread of student credit cards. You’ll earn the 1% flat rate on all purchases, but you can also earn 5% cash back with the bonus quarterly rotating category, on up to $1,500 in combined spending per quarter (then 1%).
For April through June, it includes gas stations and electric vehicle charging stations, home improvement stores, and public transit. You have to manually activate these bonus categories through your account to earn this higher rate, though.
We also like that this card offers an Unlimited Cashback Match™ welcome bonus — Discover will match your cash back earned for your first year, essentially doubling your cash back at the end of your first year.
For more details, see our full review of the Discover it Student Cash Back.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- 0% for 6 months
- Regular APR
- 18.24% – 27.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
5%
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases-automatically.
1%
Earn unlimited 1% cash back on all other purchases – automatically.
Best credit card for people with limited credit
Petal® 2 “Cash Back, No Fees” Visa® Credit Card
The Petal 2 Visa Credit Card, issued by WebBank, offers a unique “Cash Score” application supplement that could help you qualify for the card without a credit history. It’s also one of the few credit cards geared toward those with limited or fair credit that also offers cash-back rewards. It has a credit line between $300 and $10,000.
You can earn 1% cash back on all eligible purchases, and the rate can increase to up to 1.5% on eligible purchases after 12 on-time monthly payments. There are no annual fees, security deposits, late fees or foreign transaction fees, making this a flexible option for anyone’s first credit card.
For more details, see our full review of the Petal 2 Visa Credit Card.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 18.24% – 32.24% (Variable)
- Balance Transfer Fee
- N/A
1.5%
Up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments.
1%
1% cash back on eligible purchases right away.
The Petal 2 Visa Credit Card, issued by WebBank, offers a unique “Cash Score” application supplement that could help you qualify for the card without a credit history. It’s also one of the few credit cards geared toward those with limited or fair credit that also offers cash-back rewards. It has a credit line between $300 and $10,000.
You can earn 1% cash back on all eligible purchases, and the rate can increase to up to 1.5% on eligible purchases after 12 on-time monthly payments. There are no annual fees, security deposits, late fees or foreign transaction fees, making this a flexible option for anyone’s first credit card.
For more details, see our full review of the Petal 2 Visa Credit Card.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 18.24% – 32.24% (Variable)
- Balance Transfer Fee
- N/A
1.5%
Up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments.
1%
1% cash back on eligible purchases right away.
The Capital One Platinum Credit Card* doesn’t offer many perks, but it could be a good option for your first credit card if you don’t want to put down a security deposit and aren’t a student.
This card is designed for people with fair, average or limited credit — typically a credit score between 580 and 669. Though you won’t earn rewards or a welcome bonus, you can build up your credit score with responsible use and there are no foreign transaction fees — meaning you can use it abroad without facing additional costs.
For more details, check out our full review of the Capital One Platinum Credit Card.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 30.74% (Variable)
- Balance Transfer Fee
- $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
The Capital One Platinum Credit Card* doesn’t offer many perks, but it could be a good option for your first credit card if you don’t want to put down a security deposit and aren’t a student.
This card is designed for people with fair, average or limited credit — typically a credit score between 580 and 669. Though you won’t earn rewards or a welcome bonus, you can build up your credit score with responsible use and there are no foreign transaction fees — meaning you can use it abroad without facing additional costs.
For more details, check out our full review of the Capital One Platinum Credit Card.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 30.74% (Variable)
- Balance Transfer Fee
- $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
Intro Offer
Cashback Match™
Intro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
Secured credit cards require a refundable security deposit — but not all of them enable you to earn rewards on your purchases.
With a credit limit range of $200 to $2,500, you can earn 2% cash back at gas stations and restaurants with the Discover it® Secured Credit Card*, on up to a combined $1,000 in spending per calendar quarter (then 1%). You’ll earn 1% cash back on other purchases, and you’ll still get the Unlimited Cashback Match™ as with the other Discover credit cards. This card will also let you see if you’re preapproved before you apply.
For more information, see our full review of the Discover it Secured Credit Card.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- N/A
- Regular APR
- 28.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
2%
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.
1%
Earn unlimited 1% cash back on all other purchases – automatically.
Secured credit cards require a refundable security deposit — but not all of them enable you to earn rewards on your purchases.
With a credit limit range of $200 to $2,500, you can earn 2% cash back at gas stations and restaurants with the Discover it® Secured Credit Card*, on up to a combined $1,000 in spending per calendar quarter (then 1%). You’ll earn 1% cash back on other purchases, and you’ll still get the Unlimited Cashback Match™ as with the other Discover credit cards. This card will also let you see if you’re preapproved before you apply.
For more information, see our full review of the Discover it Secured Credit Card.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- N/A
- Regular APR
- 28.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
2%
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.
1%
Earn unlimited 1% cash back on all other purchases – automatically.
Intro Offer
$50
Early Spend Bonus: Earn $50 when you spend $100 in the first three months
If you eat a lot of takeout or go to restaurants often, the Capital One SavorOne Student Cash Rewards Credit Card* can maximize cash back on your meals and entertainment. You may be able to get preapproved for this credit card to test the waters, though as a student credit card, it has more relaxed credit requirements than its traditional counterpart.
You’ll earn 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Target and Walmart). Entertainment covers movie theaters, sports promoters (professional and semiprofessional live events), amusement parks, tourist attractions, aquariums, zoos, dance halls, record stores, pool halls and bowling alleys. Streaming services include Netflix, Hulu and Disney+. For other purchases, you’ll earn 1% cash back.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 19.99% – 29.99% (Variable)
- Balance Transfer Fee
- $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
8%
8% Cash Back on Capital One Entertainment purchases
5%
5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply)
3%
3% Cash Back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®)
1%
1% Cash Back on all other purchases
If you eat a lot of takeout or go to restaurants often, the Capital One SavorOne Student Cash Rewards Credit Card* can maximize cash back on your meals and entertainment. You may be able to get preapproved for this credit card to test the waters, though as a student credit card, it has more relaxed credit requirements than its traditional counterpart.
You’ll earn 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Target and Walmart). Entertainment covers movie theaters, sports promoters (professional and semiprofessional live events), amusement parks, tourist attractions, aquariums, zoos, dance halls, record stores, pool halls and bowling alleys. Streaming services include Netflix, Hulu and Disney+. For other purchases, you’ll earn 1% cash back.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 19.99% – 29.99% (Variable)
- Balance Transfer Fee
- $0 at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you
8%
8% Cash Back on Capital One Entertainment purchases
5%
5% Cash Back on hotels and rental cars booked through Capital One Travel (terms apply)
3%
3% Cash Back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®)
1%
1% Cash Back on all other purchases
*All information about the Discover it Student Cash Back, Capital One Platinum Credit Card, Capital One SavorOne Student Cash Rewards Credit Card and the Discover it Secured Credit Card has been collected independently by CNET and has not been reviewed by the issuer.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
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