Many influencers recommend cards with complex rewards and annual fees as a “best first credit card.” This is, frankly, bad advice.
For your first card, I would keep it simple: Get a card that offers decent cash-back rewards everywhere and has no annual fee.
My recommendation: The Chase Freedom Unlimited
For most people getting their first card, I have one recommendation: The Chase Freedom Unlimited® card.
The Freedom Unlimited is a no-annual-fee card offering 3% cash back on dining and drugstore purchases, 5% on travel purchased through Chase Travel and 1.5% cash back on other purchases.
The card is marketed as cash back, but actually earns Ultimate Rewards points behind the scenes—an advantage if you eventually want to get into redeeming points for travel and has a good set of travel and insurance benefits.
Plus, the Freedom Unlimited offers a welcome bonus that is relatively easy to earn.
Chase Freedom Unlimited® welcome offer
Welcome offer: Earn a $200 bonus after you spend $500 on purchases in the first 3 months from account opening.
This bonus is marketed as cash back, but is awarded as Ultimate Rewards points.
Chase often offers better in-branch bonuses on this card that you won’t see online.
Annual fee: $0
Why the Chase Freedom Unlimited?
Here’s a little bit more on the “why” behind my recommendation.
First off, the Freedom Unlimited card has no annual fee. When I see influencers telling people that their first card should be something with an annual fee like the Chase Sapphire Preferred, I honestly want to throw my phone on the ground. There is no reason to be paying an annual fee on your first credit card, assuming that you don’t have damaged credit.
Second, the card offers decent rewards on all purchases. If you’ve followed me on YouTube or here on the blog, you know that I am a fan of 2% cash back cards, but I don’t think that this is necessary for your first credit card. The Freedom Unlimited offers some bonus category rewards in addition to 1.5% cash back everywhere else, making it a good “don’t have to think about it” option.
Third, the Freedom Unlimited has decent consumer insurance benefits. The card’s purchase protection gives you 120 days of protection against damage/theft on many of the things you buy for free. And the extended warranty coverage gives you an additional year of warranty coverage through Chase on eligible warranties of three years or less.
Finally, getting the Freedom Unlimited doesn’t lock you into a certain type of rewards. Because you can redeem the card’s points for cash back, you can pursue a cash back strategy and use the card along other cash back cards like the Blue Cash Preferred or Wells Fargo Autograph.
Or you can eventually add other Chase cards to your wallet that can make your points more valuable for travel booked through Chase Travel or airline transfer partners.
A few notes on getting your first credit card
Now, if you’re new to using credit cards, or if you know someone who has gotten into debt using credit cards, you might be hesitant to pick up your first credit card. Here’s where I’ll say something that a lot of credit card content creators won’t: Being cautious here is a good thing!
It is possible to use a credit card and earn rewards without ever paying a fee or interest charges. But you need to have the ability and discipline to spend within your means and pay off your card every month. If you do, follow these tips and you’ll be good.
Top three credit card tips
First, always, always, always pay off your statement balance in full each month. Paying your statement balance in full is the way that you avoid paying interest on your credit card. And if you’re not doing this and you’re paying interest, it will cost you. A 27% APR interest rate means that you’ll pay $270 over the course of a year on a $1,000 balance.
If there’s any chance that having a credit card would tempt you to spend beyond your means, don’t get a credit card. If you’re currently paying interest on a credit card and can’t pay it off immediately, consider a card with a 0% balance transfer option to get a temporary pause on interest while you work to pay your cards down.
Second, make your life simpler by setting up automatic payments. If you forget to make your payments on-time, you’ll end up paying interest. But setting up automatic payments ensures that your cards are always paid on-time, every month. Chase makes this relatively easy to set up through its website and mobile app.
Finally, review your transactions monthly. While you do have excellent consumer protections against fraud (better than you have with your debit card!), you do need to keep track of your accounts. Every month, it’s a good idea to take a look at your statement and call your bank to report any charges that are fraudulent.
Used wisely, a credit card can offer a great combination of consumer protection, perks, and convenience that you won’t get with a debit card or cash. And earning some cash back along the way can be a meaningful rebate that you earn every time you swipe your card. And the Freedom Unlimited is an excellent choice that offers everything you’d want in a first card.
