These are Finder's picks of the best credit cards for first timers. These are all no-frills, basic cards that are a great first step. They should be easier to get approval for too.
To determine Finder's pick of first credit cards, we examine over 250 cards in our database. We narrow it down to cards with annual fees under $100 and minimum credit limits under $3,000. We also consider whether or not the cards are available through Finder. The other key factors we consider are:
Keep in mind: Our top picks may not always be best for you. Based on your situation, you may find certain features to be more or less important, so compare your options before you apply.
"Put a monthly reminder in your calendar to check your credit card statement. You should always aim to pay off the full amount you've spent each month if you're able to. If you can't do this, pay off what you can and make a plan to pay it off in full as soon as possible. Another important tip: don't withdraw cash using your credit card. The cash advance rate is high and you get charged interest immediately."
Your first credit card should have low costs that help you avoid debt when you're getting used to it. Ideally, it should also include features that you want.
With that in mind, here are some key features to consider when comparing credit cards as a first-timer.
The purchase rate is the interest rate that applies to most of the things you'll pay for with a credit card.
A low purchase rate (between 8% and 15%) is ideal when you're starting out with a credit card, as it helps keep potential interest costs down. Especially when some cards have rates around 27% for purchases.
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The cash advance rate is charged when you use a credit card to withdraw cash from an ATM, pay for gambling or other cash advance transactions. It can be almost 30% on some credit cards, so avoid cash advances as much as possible when you get your first card.
Getting a low or no annual fee on your first credit card means you can test it out without paying a huge amount for the account. Under $100 is good.
Annual fees of around $300 - $400 are usually for higher end frequent flyer cards.
A low credit limit is easier to manage and helps you avoid debt. So, credit cards with minimum credit limits of around $500 to $3,000 can be a good place to start.
Just keep in mind that the credit card company determines the actual credit limit you're offered (based on your application). But you can request the minimum credit limit, either when you apply or after you get approved.
Every credit card has a set of requirements you need to meet before you can apply, which usually covers:
It can be easier to get used to a credit card that just has the basics. But you can factor in a particular feature that you want.
For example, if rewards are the main reason you want a credit card, have a plan for repayments and decide if the value you'll get from rewards is worth the card's costs.
19% of Australians say they've put off applying for credit due to fear of rejection. Getting a low rate card with a low credit limit increases your chances of approval. Often your current bank can approve you for a simple credit card quickly because it already knows a lot about your saving and spending habits.
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