Your first credit card – which one should you pick?

Free at last!  When I have nothing better to do, I lurk around in credit-help forums to see what kind of problems people face and the typical advice that’s being dished out.

Most are sensible, but some show lack of experience and frankly, bad. Sometimes such advice is even the most popular for a poster’s question. One very popular question is from people who are trying to build a credit history – mostly students. Eligible to get a credit card, which one to pick?

The most typical advice is some card with rewards. Here are some typical responses gathered from an actual forum for a good first credit card:

Citi Forward


Chase Freedom

Capital One Student Journey

All these cards have some combination of rewards that might appeal to different kinds of people based on their spending habits.

Yet, your first card should be picked with a lot of care and caution. Why? Because you start building your credit history from this point onwards (at least the most significant portion of it) and your oldest card matters quite a bit on how your credit score is calculated. That’s the reason you are advised to not close your oldest card, which is very good advice!

What’s wrong with the above cards?

Before I answer that question, let me ask you a question. If you have a credit history of at least 15 years, do you still use your first credit card? Is it even active?

For a guy starting out today, his needs, income, status and spending habits are going to change in the coming years. And so will his credit card of choice! When that happens, if you stop using a card long enough, most big banks are going to close it for inactivity. And when your first card is closed, it is going to affect your credit score since your history is based on that (most typical).

So what’s the advice here?

Go with a card issued by a credit union. They might not have the best rewards, but it will be worth it in the long run. Why? Because for-members credit unions are less likely to close a card for inactivity than for-shareholders-profit banks.

One of the principles of this blog is not to dish out advice willy-nilly. I try to talk about personal experiences that’s worked for me, not what I’ve heard or gleaned from forums! :)

My experience

I still have my first (unsecured) credit card! And yes it is still active, and no I don’t use it! My first card was from a credit union. During the early days I used it for everything and that was pretty much my only card! The rewards were horrible, but that didn’t bother me. I was simply using it as a cash substitute paying it off in full at the end of every month.

But as I grew older, my choices and spending habits changed. I added a few more cards to my wallet and slowly stopped using my first card altogether. I never closed it, but I never used it either.

Like clockwork, my credit union would renew my card year after year! Can you imagine that happening if I had remained with Bank of America or some other big bank? I’ll bet they would close it as soon as they figure out I’m not useful to them any more. Sure not all credit unions are the same, but chances are a credit union would be more understanding than a bank. I’d gamble on that.

For this one reason, I would advice someone looking to getting a credit card to get one from a credit union and not a bank. Don’t chase rewards when you are just starting out. The first credit card you pick is very special and factors heavily on how your credit scores are calculated. Choose with care.

I know this advice is unconventional, but then so is my blog.

29 thoughts on “Your first credit card – which one should you pick?

  1. I used to have a credit card from a credit union and was very satisfied with it. The main thing I loved about them was a “terms” page on their website that was only one page long. They also offered outstanding service if I had a question about my card.

  2. If you plan to have one credit card, I would recommand chase freedom, I think it has the best reward program around.

    You should get coupon – reward points equal $25-$100 for openning the credit card with them, at one time I even saw a coupon worth $250

    • Sorry Ethan, I’m going to have to disagree. Here’s what I don’t like about Chase Freedom:
      1. Revolving categories. I can never remember which ones are active each month. I have Discover, which does the same thing.
      2. Don’t sign up for cards based on the promotional offer.
      3. If rewards were the only thing I cared about, I would choose Priceline Visa which gives you 2% uniformly on all purchases and not cards with revolving categories that too with limits.

  3. Good advice. Something most people wouldn’t think about.

  4. I still have my first credit card, from back in the day. And, still use it periodically. Canceling it wouldn’t help me now, and I would agree that it’s wise to keep one’s first card in most cases.

  5. I like to get the best rewards based on my spending. Amex blue and PennFed cards give me the best combo in rewards for groceries, gas and total spending.

  6. I can’t even remember what my first credit card was except that the interest rate was horrible lol. It was some type of visa or mastercard that was offered in partnership with my college I think. I only have a few credit cards now and each of them has a decent rewards program.

  7. I also happen to have my first card from a credit union. It’s been almost 20 years, and I still have it. I agree that we change our credit choices over the years. I only have few credit cards, but I normally use my credit union card once or twice a year to keep it current.

  8. wow do you even remember the PIN on the card? I had a card blocked when traveling abroad and trying to use the emergency card I couldn’t remember the PIN!

  9. Unconventional and out of the box, that’s what we need more of MC! I had a credit union one when I started out, sadly, I closed it. Where were you back then, haha! I pay have closed my second card as well. I didn’t know I was butchering my own credit score. Great advice for first time credit card users!

  10. I have never thought to look at a credit union for a credit card. Probably because they don’t really advertise and I’m assuming the rewards aren’t as good. Between my Fidelity American Express, Chase Freedom and Discover Card, I’m rocking over $1000 in cash back per year!

    • That’s the whole point of a credit union – they don’t have huge budgets for advertising. Instead they pass on that savings to you the customer!

  11. This is exactly what first-timers, or college students should know before they get their first credit card.

  12. When people ask me this question, I always say the opposite. Look for the best value. The Bank of America 3% on gas, 2% groceries 1% all purchases, is the best for younger adults who pretty much buy food/gas. Getting some cash back is of value than just keeping a card without the thought of having it closed.

  13. My first card was a cash back rewards card. I picked it because it had lower interest than some, and no annual fee. It served me well for awhile.

  14. For a first card, I would go with one that had no annual fee and lowest interest rate, but had the best rewards. (My focus would be the first two though, as I assume a youngster isn’t charging a lot.)

    Rewards are a huge part of my card choice now, and I refuse to use a card that charges an annual fee. I pay attention to the interest rate, but I don’t worry about it much since I pay the bill off every month. If I am unable to do that, then I just wouldn’t use the card.

  15. My first credit card was a Discover card. I remember because I was a freshman on campus and was offered a free tshirt if I filled out an application. Talk about stupid things!!! I was after about 5 years when I stopped using it. I now have a Capital One and I have had it forever they left it open even though I stopped using it for about two years.

  16. I think the most important factor when choosing your first card is finding one with no annual fee. It’s tempting to pick a card with great rewards but they typically have a steep fee that will offset the benefits unless used strategically each year.

  17. Does it really effect you badly if an old credit card gets closed?

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