Choosing the right starter credit cards is important to lay the foundation of your credit history.
As a reminder, always pay off your credit cards in full each month to avoid paying interest. It doesn't make sense to accumulate debt to get "free travel." The idea is to get optimal value from your everyday spend.
If you don't have any credit history, I recommend getting a secured credit card first for at least 6-12 months and then applying for a starter credit card.
A good starter card typically doesn't have an annual fee, and it allows you to accumulate cash back or points with your purchases.
Chase Starter / Foundation Cards
I recommend starting with Chase cards first to build a relationship with them. Chase offers some of the best travel credit cards on the market.
Getting a Chase Freedom, Chase Freedom Unlimited, or the Chase Slate is the optimal strategy because of the Chase 5/24 rule.
The 5/24 rule means that Chase will automatically reject you for some of their credit cards if you have 5 or more new accounts (from any credit issuer) on your credit report in the past 24 months.
If you apply for one of the Chase Freedom cards and get rejected, refer to this post on what to do next.
The Chase Freedom cards earn Ultimate Rewards (UR), which can be transferred to a higher tier Chase card like the Chase Sapphire Reserve for optimal redemption.
- Sign up bonus: $150 after $500 in spend within 3 months
- 5% cash back on rotating categories each quarter, up to $1,500 in combined purchases. Must activate the quarter.
Chase Freedom Unlimited
- Sign up bonus: $150 after $500 in purchases within the first 3 months
- Earn 1.5% cash back on every purchase
Both Chase Freedom cards offer a signup bonus of 15,000 UR points.
Without other cards, UR points = 1 cents per point (CPP)
- 15k UR = $150 (for $500 spend)
- 5x UR = 5%
- 1.5x UR = 1.5%
With other cards like the Chase Sapphire Reserve = 1.5 CPP
- 5x UR = 7.5%
- 1.5x UR = 2.25%
Discover Starter / Foundation Cards
- 5% cash back on rotating categories each quarter, up to $1,500 in combined purchases
- Cashback match in Year 1 = 10% back
- Cashback match also works for Discover Deals
Example of some Discover Deals (as of 1/14/2018)
- 5% at Apple, Walmart, Samsung, etc. (10% w/ CBM)
- 10% at Saks Fifth Avenue (20% w/ CBM)
- 10% at many cruises (20% w/ CBM)
- See: https://www.discover.com/credit-cards/deals/
- Discover is removing many long-term insurance products for their cards
- The only one sticking around is price protection
- I would NOT recommend using Discover for long-term purchases where you want extended warranty or return protection
Discover It Miles
- 1.5% back on all purchases
- Cashback match in Year 1 = 3%
- Cashback match also works for Discover Deals
You can view credit card offers by going to the "Credit Card Offers" tab. Find offers for the respective cards in "Cash Back Credit Cards" and "Balance Transfer Credit Cards." You don't have to use our links, but we're grateful when you do. Thank you for supporting AskSebby!
U.S. Bank Starter / Foundation Card
The U.S. Bank Cash+ credit card is a good option if you want to pick and choose your 5% categories each quarter. Learn more about the U.S. Bank Cash+ card in this post.
U.S. Bank Cash+
- 5% cash back every quarter on your choice of 2 categories, up to $2,000 in combined purchases
- 2% cash back every quarter in an everyday category of your choice, like gas, restaurants, or groceries
- 1% cash back on everything else
American Express Starter / Foundation Cards
Amex offers two starter cards, the Amex Blue Cash and the Amex EveryDay card. Both cards offer cash back at grocery stores, but one earns cash back, and the other earns MR points.
Amex Blue Cash Everyday - Earns CASH BACK
- 3% at grocery stores (cap of $6,000 of spend)
- 2% at gas stations and select department stores
- 1% everywhere else
- Earns: cash back via statement credits
Amex EveryDay - Earns MEMBERSHIP REWARDS (MR) POINTS
- 2x MR points at supermarkets (on up to $6,000 of spend)
- 1x MR everywhere else
- 20+ transactions (less any returns) per billing cycle = 20% bonus
- Earns: Membership Rewards (MR) points
If you're planning on traveling and getting an Amex Platinum or Amex PRG in the future, then go for the Amex EveryDay card.
Citi Bank Starter / Foundation Card
If you don't want to deal with rotating categories and thinking about which card to use, the Citi Double Cash card offers 2% cash back on all transactions. Learn more about the Citi Double Cash card in this post.
Citi Double Cash
- Earn 1% unlimited cash back on every dollar you spend
- Earn an additional 1% on payments based on those purchases
- Redeem cash back for a statement credit, gift card, or a check
All Citi cards come with great benefits like Price Protection and Return Guarantee. Citi Private Pass has been surprisingly useful since Citi has presales/exclusive tickets. "For access to the best in live music, sports, dining, family entertainment and more, look no further than Citi® Private Pass®. There's no need to enroll and no fees to pay to gain access."
Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines or hotel chain, vendors or companies, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
UGC disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.