The Best Beginning Credit Cards

Student Cards

Many banks and credit card companies offer credit cards specially designed for college students. These cards, which feature low credit limits and straightforward billing, may require a parent or guardian to act as a co-signer. Others are available only to students with some source of income. But in each case the student card is a basic credit card that gives the holder a chance to build up a credit history without the risk of unchecked overspending.

Store Cards

Department stores and specialty retailers offer their own credit cards for use in the store or to make online purchases. While this limits the card's usefulness, it can still be a good way to build up a credit history before transitioning to a traditional credit card. For example, if you have no credit history and a low income, a card at a store you shop at regularly allows you to make purchases that you'd otherwise pay for with cash, checks or a debit card. Paying your bill on time will start to build up your credit history and make you eligible for other credit cards.

Basic Cards

If you have a steady income and at least average credit, you can apply for a traditional credit card directly. However, as your first card, it's especially important to make sure you get a card that fits your needs. A basic card without an annual fee and a reasonable credit limit is the place to start. Avoid cards with too many features such as low introductory rates, unlimited balance transfers or lavish rewards programs, as these all serve to complicate matters and may incur hidden fees. Once you become familiar with your card and learn to use it responsibly you can consider applying for a card with a higher limit or a rewards program.

Tips for Applying

When you select your first credit card it will help to compare offers from various institutions. Just because you have a savings or checking account with a given bank doesn't mean this bank will offer the best student credit card. Likewise basic credit cards vary from one issuer to another in terms of interest rate and features. Compare credit card offers before you apply, since each application you file shows up on your credit report as an inquiry, and too many inquiries can harm your credit score whether or not you end up approved for a credit card as a result.