Credit card recommendations?

Mods, please feel free to move this to a more appropriate forum as you see fit.

My 23-year old daughter is embarking on the great adventure of adulthood, and it’s high time she got a credit card. Something to use sparingly to establish credit as well as a safety net in case of emergencies. I realize that I could have my current credit card issue her one, but would prefer she do this on her own.

So, to get her pointed in the right direction, does anyone have any suggestions or recommendations? Horror stories? Words of wisdom to a twenty-something with no experience? Like most of her demographic, she’ll probably give more credence to the thoughts of strangers than her old man.

Many thanks in advance


Does she have a job? Does she have a car? Does she rent?

Waitressing while she waits for her muse to appear. Renting.

I’d recommend she get a card at the same bank where she has a checking account. They often have an offer where the credit line can be dual-purposed as overdraft protection. If she’s not a big card user,

  1. Celebrate, and
  2. Advise her to pay one bill a month with her credit card (something like her auto insurance or Netflix) then pay off the credit card accordingly. This is a great, low-impact way to build a credit history.

I like Chase Sapphire. It has relatively decent rewards points, which you can then use on Amazon. There’s also Chase Freedom, which has a similar points program. Compared to other cards, the rewards are relatively generous and bullshit-free.

I think the first lesson about credit cards is, “never carry a balance”. I assume you’ve already told your kid that one. The second lesson, IMO, is “make the credit card company reward you for using their card”. They make something like 3% off all your purchases, so they should be willing to bribe you to keep using their card with 1% back at least. :slight_smile:

As for horror stories: When I first moved to the US, I had no credit history, so I ended up with this cheap-ass Century Bank credit card with a $300 limit that charged $75/year to use. I got rid of that very quickly once I qualified for anything else, which happened to be the low level Chase card. Later I got a small cheque as a result of a class action lawsuit against Century Bank on account of their lending practices or something.

Her bank’s starter card is a good idea.

Discover has a really good starter card for people with no credit but the problem is that Discover isn’t accepted as widely.

The problem is that spending a credit card is tricky, so I would recommend her using a budget program/website to track her spending better. I use which I touted in another thread. It’s free and if you’re familiar with online banking, it’s relatively easy. She can also check out creditKarma to see where her credit is and if she’d be qualified for something with better rewards.

Last year, when my son (then 23 years old) graduated from college and got his first job and first rental apartment, he applied for a couple credit cards and was turned down. (One was Discover; I can’t remember the other one.) I figured it was because he did not have a credit history. He ended up getting a debit card from his bank, and that has worked out pretty well.

He does have a credit card on one of my Visa accounts, but he uses that only when a debit card won’t work, and then pays me back by check. This has come up only once or twice.

I figure maybe after a year he will have enough of a credit history (from paying rent, gas & electric, and cable bills) to apply for a card again.

So that’s not really answering your question – I don’t have any recommendation for a credit card for your daughter – but if you later find that she does not qualify for one, you might want to consider a debit card.

Thanks. Good stuff. I was thinking of having her look into credit unions as well.

My local credit union has one regular non-points card for offer, but it’s with a low APR and no yearly fees. I’ve had great luck with my credit union outpacing major banks every step of the way, but I’ve also heard not all credit unions are built alike. I would look into what your local credit union has to offer, and see if maybe they’re right for her.

I’ll also note that the credit union didn’t bat an eye at giving me what felt like an absurdly high limit of $5000 when I was applying for my first card at 18 (absolutely no credit!). I never thought I needed it but twice now in my life that amount has certainly come in handy for emergencies (mostly of the car variety). Something to keep in mind if a big bank only offers her a $500 limit card.

Also, make sure she gets a no-fee card and watch the interest rates.

This is the one I have and, as far as I’m concerned, it was the best deal out there.

For beginners with no credit history, do some banks still offer secured credit cards, where you have to keep some minimum balance in an account with them, which serves as collateral for the card?

Doesn’t Sapphire have a $95 annual fee, waived the first year?

Chase Freedom used to be a good card, but for me its current scheme of a 5% rebate in varying categories every quarter, 1% everywhere else, is just too much of a bother. For instance, you can get a 5% rebate on Amazon, but only in January-March and only if you remember to sign up for it that year. From July-September last year, the 5% discount was only for shopping at Kohl’s.

For the OP I recommend Sallie Mae Barclays MasterCard, which offers a 5% cash rebate on the first $250 spent each month at grocery stores, 5% on the first $250 spent each month at gas stations, plus 5% on the first $750 each month at bookstores. Everything over that limit or at other store types gets you 1%. You can get it as a statement credit (or to pay down a Sallie Mae loan if you have one).

Amazon also has a decent card offered through Chase, with a 3% rebate at Amazon, 2% at restaurants and drug stores, 1% elsewhere, that’s good on Amazon.

But more important than which card is developing a system so you never ever pay interest, and never buy something you can’t pay for at the end of the month. If you can’t manage that, a debit card will let the bank do it for you, but it’s much better to do it yourself. Such a system might mean entering every card purchase into her smartphone, until she gets an idea of how much her regular purchases run each month, and can mentally put that money aside.

If she really needs to carry a balance month to month, the list of “best cards” becomes completely different. Any rewards will be quickly swamped by the interest rates and fees.

I have found that Amex is the best card in general in terms of fees, customer service, and rewards. The downside is that it is not as universally accepted. If you want something that will likely be accepted anywhere, I would go with a visa rewards card issued by whatever company or brand that whose services she utilizes often (eg. Amazon Chase card, United visa card, etc. Here is a good site with some reviews on different cards. The main thing is that she pay it off completely every month without fail.

The Chase Sapphire Preferred does, the regular one doesn’t.

I just finished a debt consolidation program last summer. I wanted to get a new credit card so as to start repairing my credit history after being in consolidation for 5 years.

I got a Capital One Visa with no annual fee. Only a $300 limit (to start), but I don’t need a high limit. I just want to use it for something small every month then pay it off in full every month. With as bad as my credit had gotten, if I got approved then I can’t imagine who wouldn’t be approved!

I’m considerably older though. Maybe that makes a difference.
I have a friend about your daughter’s age who wanted to establish a good credit history. She saved up for a large purchase, something that she wanted anyway, then instead of paying with her savings she got onto a store-offered payment plan (it was a great big T.V. from someplace like a Best Buy). She made her payments on time every month and it wasn’t long before she started getting some reasonable credit card offers. She applied for the one that most appealed to her and was approved easily.

Interest rates are, of course, irrelevant if one never pays interest.
Regarding folks in their early 20s being turned down, how does that work? I’m wondering what credit history I could have possibly had back then. Maybe my checking account?

Just starting out you don’t have good or bad credit but “zero” credit. Credit history aside, a huge portion of deciding if you qualify or not, and the credit limit is based on your income.

BZZT sorry. He’ll be in exactly the same spot in one year unless he gets a credit card, student loan, auto loan, or mortgage. Rent, Gas, Electric, Cable, Bank accounts only report on your credit if you are late enough to go into collections or get a judgement. They do NOT report if they are positive.

Your first credit card should always be an American Express from Amex directly (not from Citi or Fidelity, etc). That is because every AMEX you get after that will back date to the opening date of that first one (increasing your Average age of accounts- basically, every AMEX you get will INCREASE your credit score once the first one is old enough). The AMEX blue cards are usually reasonably easy to get as long as you have no negatives.

Edit to add, on some versions of the FICO score you can increase the score by being an authorized user on good accounts - so start out by adding someone with no credit to your oldest, never ever ever paid late credit cards (you don’t have to give them the physical card that you get when you add them as an authorized user).

Capital One will issue credit cards to most anyone with a pulse. I got one with no fees when I had very little credit history back in college. Started at $500 and raised it to $1000 after a year-ish of good behavior. And then, after I filed bankruptcy about 5 years ago and wrote off my balance with them, they were the first legitimate credit card issuer to offer me another card. Lower limit (only $300), but still no fees. They’ve since bumped me to $500 but that’s all the credit I really want.

I can confirm that. I interviewed with them once (back in school, they had a career fair, and I thought “why not?”). The interviewer was very vocal about the company’s position of providing credit to people who would otherwise not be able to get any, because you can treat them like crap and they have no other choice but to stick with you.