Once you get an SSN (Social Security Number), it’s like receiving the key to the dazzling kingdom of credit cards. Compared with a debit card, using a credit card has two benefits: first, managing credit cards helps improve your creditworthiness (we’ll explain what that means below); second, spending on credit cards can earn discounts, cash back, or all kinds of points, and those points can make travel much easier. For more benefits of using credit cards, ymlulu wrote an excellent article—Understanding Credit Cards from Scratch.
What can you do with the points you earn from credit cards? The simplest way is to redeem them directly for cash, which is the most flexible and efficient option. A slightly more advanced use is converting them into airline miles or hotel points. We’ve already shown just the tip of the iceberg in earlier posts (Using UA Points 1, Using ANA Points), and there is still a huge amount to explore. There’s so much to say about this topic: if you do it well, you can save a lot of money and significantly improve the quality of your trips. And the most convenient source of these points is credit cards, especially their welcome bonuses, which are often worth tens of thousands of points—more than enough for a one-way ticket back home.
However, the credit cards everyone raves about (such as Chase Sapphire and AMEX Gold) are not necessarily good fits for beginners. It’s like fighting monsters in a game: if you go straight for the big boss at the start, the rewards may be great if you win, but most of the time you’ll get crushed. So it’s better to practice on the weaker monsters first. As you level up, you can take on stronger ones, and once you can easily beat the weaker ones, you can try the bigger challenges and gradually work your way toward the boss.
In the kingdom of credit cards, your level is your creditworthiness. That doesn’t just mean your credit score; it also includes your credit history, repayment record, overall utilization across all credit cards, and more. Having strong creditworthiness not only makes it easier to get those “best-ever” cards, but also helps you secure very low interest rates when applying for auto loans or mortgages. There’s a common misconception worth clearing up here: many people focus only on their credit score and think that’s all that matters. In reality, a good score alone isn’t enough. Many people have high scores but still can’t get good loans because their credit history isn’t long enough, so U.S. lenders don’t fully trust their credit profile. Therefore, I suggest beginners apply for a credit card as soon as they get an SSN, so their credit history can start building earlier, which will help later when applying for a mortgage or car loan. After all, even a 1% difference in mortgage interest can mean thousands or even tens of thousands of dollars.
Back to the leveling-up analogy: how do you level up in the credit card world? Just like in other games, you start with the weaker monsters. So which “starter” credit cards are suitable for beginners? Before introducing them, let’s first look at the conditions a beginner-friendly credit card should meet:
- No annual fee: No annual fee means you won’t feel pressured to close the card because of the fee. Also, average age of accounts makes up a significant portion of your credit score calculation (roughly 20%). Remember: do not close your first credit card, because doing so will lower your average age of credit.
- Easy to get approved for: If your credit history is blank, it’s unrealistic to apply right away for premium cards that offer tens of thousands of points as a signup bonus. Banks won’t take that kind of risk to give you such a good offer. Getting denied not only feels bad, but also adds a Hard Pull to your credit report for no reason. So keep the right mindset: the goal of your first credit card should not be a huge signup bonus, but rather to start building your creditworthiness. In this situation, getting approved at all is already a very good outcome. Even if the card’s Credit Limit is only a few hundred dollars, it still marks the beginning of your credit history.
- Strong rewards for everyday spending: What do students usually spend the most on? Dining, groceries, gas, and sometimes online shopping. If you can earn more than 1% cash back in these categories, the savings will add up over time.
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Alright, now let me formally introduce these beginner-friendly “starter monsters” everyone loves:
(1) Chase Freedom® Card
If you have a Chase checking account, this card is usually pretty easy to get approved for; if not, that’s okay too (I don’t have a Chase checking account myself). ymlulu wrote a great article introducing this card, and it’s worth a read. The main highlight is 5% cash back in different categories each quarter (up to a $1500 cap). Here is this year’s bonus calendar:
As you can see, this year’s first-quarter (Q1) 5% categories included movie theaters, grocery stores, and Starbucks. If you regularly shop at a certain grocery store, you can buy enough gift cards there during that quarter to cover a year’s worth of spending, and effectively get 5% back there all year. The same strategy can work for Starbucks, Q2 restaurants, Q3 gas stations, and Q4 Amazon. In other words, it covers the four major everyday categories of dining, gas, groceries, and online shopping, making it a great starter credit card for students. That said, it does require some credit history, so it’s best to apply after you have about one year of credit history. Right now, there is a signup bonus of $125 after spending $500 ($100 for opening the card, plus $25 for adding an authorized user). You can apply using the link below:
Chase Freedom application link
Hidden skill: Freedom’s cash back is awarded in the form of UR points. To learn how UR points can be used, see our Points System Intro Series. If your creditworthiness improves later, you can apply for a Chase Sapphire card, and then the points you earn with Freedom can be transferred into UA miles. To learn how to use UA miles, see this beginner’s guide.
(2) Discover it® Card：
Like Freedom, this card is also known for offering 5% cash back in different categories each quarter. In ymlulu’s article about this card, we see that it was his first credit card, so it’s easy to imagine he still has a special fondness for it :) This year’s cash-back categories are as follows:
Gas in Q1, dining in Q2, Amazon in Q3, and online shopping in Q4 (and not just Amazon—all online shopping counts, which makes this a must-have card for Black Friday). From the Freedom overview above, you can probably already see how to maximize it. It also doesn’t require a long credit history, so it’s totally fine to apply as soon as you get your SSN! The cash back you earn can be redeemed not only for cash, but also for gift cards. For example, $20 in cash back can be exchanged for a $25 Staples gift card, or $40 in cash back can be exchanged for an $80 Carnival cruise gift card or car rental gift card. If you rent cars often, or dream of taking a cruise to the Caribbean for island views and beaches, Discover is absolutely one of your best options. If you shop online through Discover Deal, you can earn even more cash back—for example, even shopping directly on Apple’s website can earn 5%. Here are some deals I like:
Discover also has a Double Cash Promotion for new cardholders. In other words, if you apply for this card now, all the cash back you earn in your first year will be doubled after one year. For details, see this article.
Hidden perk: Discover cards run on the UnionPay network in China, which means any POS terminal that accepts UnionPay can also take Discover. Keep in mind that Visa/Mastercard acceptance in China used to be limited to certain stores in major cities, and places that accept AMEX are even rarer. So if you’re going back to China, using Discover can be the most convenient option. On top of that, Discover also gives you your credit score every month, so you can keep tabs on where your credit stands.
If you want to apply, click here (make one purchase of any amount within the first three months after opening the card, and you can get $50 cash back, plus another $50 after one year as the doubling bonus)
(3) Blue Cash Everyday® from American Express：
This transparent card looks great and is highly practical too. Unlike the quarterly rotating-category cash back cards above, this card earns 3% cash back on groceries year-round (up to $6000 per calendar year), so it’s reliable no matter what. If you don’t want the hassle of stocking up on grocery store gift cards, this is also a very solid choice. It also earns 2% cash back on gas, with no cap.
Hidden perk: AMEX occasionally gives cardholders small offers, such as spend $25 at Amazon and get $25 back, spend $100 at Staples and get $20 back, spend $50 at Lowe's and get $10 back, spend $150 at Diesel and get $50 back, and so on. If you make good use of these offers, the savings can really add up. For a more detailed introduction to AMEX Offer, check out this AMEX Offer guide written by ymlulu. More importantly, AMEX is well known for its customer service. Fraud issues are usually no big deal, and if you buy something that’s final sale and the merchant refuses to take it back, AMEX may still be able to help.
Application link ($100 back after spending $1000 in the first three months)
(4) Citi ThankYou® Preferred Card for College Students
At first glance, there’s not much that stands out here: aside from earning 2 points per dollar on dining, everything else earns 1 point per dollar. While the return isn’t as strong as some other starter cards, and the welcome bonus is quite modest, this is one of the easiest cards for international students to get approved for, making it a good way to start building your credit history. There’s also a general-public version, the Citi ThankYou® Preferred Card, with a higher welcome bonus, but it’s harder to get approved for than the student version, so I don’t recommend beginners apply for it right away.
Hidden perk: the points you earn are Citi ThankYou Points (TYP), and for an introduction to TYP, check out our points system beginner series. If paired with one of Citi’s premium cards, these points can also be transferred to airline miles for award tickets. If you don’t want to deal with learning airline miles, you can also redeem them directly for airfare at a rate of 1 TYP = 1.25/1.33/1.6 cent (the exact value depends on which premium card you have and which airline you redeem through). We’ll publish a more detailed introduction to TYP in the future.
Here is the application link for this card.