New to Cash Back Credit Cards? Essential Information for Starters

Getting started in the credit card world can undoubtedly feel overwhelming. With so many different options between cash-back and travel cards, it’s easy to get lost. The good news is that you have plenty of options, and there are some great choices for credit card beginners who don’t need crazy benefits. 

For one 19-year-old, the whole concept of jumping into the deep end of credit cards is understandably worrisome. Posting in r/CreditCards, she is concerned about how to build credit without overspending and wasting money unnecessarily. 

A Beginner Card

At 19, this Redditor is already focused on finding ways to manage her monthly expenses using a credit card. While she currently uses her debit card, she wants to try to build up her credit. The good news is that her monthly expenses are relatively low. 

Spending just $150 per month on shopping, up to $60 per month on gas, and only $150 on food and groceries, her needs are limited. Even with this limited spending, there is still ample opportunity for this Redditor to take advantage of a credit card and begin establishing a strong credit history. 

At 18, she signed up for a PayPal credit card, so she has that going for her. As it stands today, she does use this card for online shopping, but she is aware that it has limited benefits. This is what prompted her to look at the Bank of America Customized Cash Rewards. However, cards from both Chase and Citi are on the table. 

The big question is, what should she do next? There is no shortage of credit card options, but how does she know what is right for a beginner without a lengthy credit history? 

The Next Card 

Knowing the Redditor’s request to avoid any annual fee, as well as a low APR, provides some clear direction as to what she wants. The good news is that there are a lot of cards out there that meet these criteria. 

At the very top of the list might be some options like the Capital One Quicksilver card, which offers 1.5% cash back. The same goes for the Wells Fargo Active Cash Back card. What the Redditor doesn’t mention is what kind of rewards she wants, as both of these cards focus on cash back benefits. 

Assuming this is what the Redditor wants right now, the Capital One Savor Cash Rewards credit card appears frequently in the comments of this post. Earning 3% cash back on dining, entertainment, and popular streaming services, this card offers some really great benefits. If the Redditor were to focus on this card, there is a very strong chance that she can have a well-established credit history in no time. 

Good Credit Card Habits

Of course, the biggest lesson is that the Redditor learns good credit card habits. Even with her low spend, she needs to focus on paying off her card every month. This might mean never charging more than she can pay off every month. In other words, however much cash she has on hand, that is all she can spend with a credit card. 

There is no doubt that establishing good credit card habits at an early age is highly beneficial for the future. The worst thing that can happen is that the Redditor runs up a credit card balance, is unable to pay it off, and ends up with poor credit. 

Having poor credit at this early stage can pose significant challenges in renting an apartment, obtaining a mortgage, or accessing other services that require or benefit from a good credit history. This could be applicable when she wants to get her first car, which requires a hard credit pull, meaning they will review her payment history and credit-to-debt ratio. 

Ultimately, the single biggest takeaway is to develop good credit card habits, build a strong credit history, and you’ll never have to worry about the APR.