Best Rewards Credit Cards for Newbies
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With cash-back and various travel perks available to those who pursue them, it’s no wonder people sign up for rewards credit cards in droves. But if you’ve never had a rewards card it’s best to keep a few things in mind.
Rewards cards only make sense if you are free of credit card debt and can continue to pay off your balance every month. Otherwise, the rewards just become a lure that may trap you in more debt. (See also: Avoid These 6 Mistakes Newbies Make With Their First Credit Card)
If you do plan to get a rewards card, test the waters first. By signing up for one rewards credit card that offers a special bonus with a low minimum spending requirement, no annual fee, and easily decipherable rewards program, you can get your feet wet without taking on too much risk or over-complicating your life. After you get the hang of it, you can assess your rewards style to see if an additional card might be useful.
Ideal Rewards Credit Cards for Beginners
But, which beginner credit card should someone new to the hobby choose? The right card depends on your individual spending style, rewards goals, and comfort level with credit.
Below are a few options any rewards rookie should consider. They’re broken down into two categories: those that give you bonus points for spending in different categories, and those that offer a flat-rate rewards scheme.
Bonus-Category Rewards Cards
These cards give you extra points for purchases at certain kinds of merchants, such as supermarkets and gas stations or just for using it a certain number of times per month.
Blue Cash Preferred® Card from American Express
While the Blue Cash Preferred® Card from American Express does charge a $95 annual fee, it’s still a solid card for beginners. The value is clear and easy to calculate.
Earn 6% back on your first $6,000 spent at U.S. supermarkets each year (then 1%), plus 3% back at U.S. gas stations and select U.S. department stores. You’ll also get an unlimited 1% back on all other purchases. Apply by 5/3/17 to earn 10% back on U.S. restaurant purchases in your first 6 months, up to $200 back.
To top it all off, you’ll earn a hefty $150 cash-back signup bonus after you spend $1,000 within the first three months of account opening. If you spend a lot on groceries and gas and mostly want to earn cash back, this is a smart option to consider. See rates and fees.
BankAmericard Cash Rewards™ Credit Card
The BankAmericard Cash Rewards™ Credit Card offers bonuses for gas and purchases at grocery stores and wholesale clubs but has no annual fee. Cardholders can earn 2% at grocery stores and wholesale clubs, 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter, and 1% back on other purchases. Bank of America customers can even receive a 10% customer bonus every time they redeem their cash rewards into a Bank of America® checking or savings account. New cardmembers can earn a $100 online cash rewards bonus after spending at least $500 in purchases in the first 90 days of account opening.
Amex EveryDay® Credit Card from American Express
If you prefer to get travel rewards rather than cash back, the Amex EveryDay® Credit Card from American Express offers points in its popular membership rewards program where you can redeem from travel, transfer to travel partners, and more. Travel rewards usually get you a higher value than cash rewards, but only if you actually use most of your points.
Cardholders earn 2x points at US supermarkets (up to $6,000 each year, then 1x), and other purchases earn 1x points. Make 20 or more purchases with your card in a billing period and earn 20% extra points on those purchases less returns and credits. Earn 10,000 Membership Reward® points after making $1,000 in purchases within your first 3 months. There is no annual fee. Terms apply. See rates and fees.
Flat-Rate Rewards Cards
If keeping on top of bonus categories is too complicated or you just think most of your spending goes toward purchases that don’t fit into one of those categories, a flat-rate card is for you. With these cards you can just get it and forget it, until it’s time to decide how you want to spend your rewards.
BankAmericard Travel Rewards® Credit Card
The BankAmericard Travel Rewards® Credit Card is a winner for newbies who want to get in on the travel rewards game. It earns high marks mostly because of its lack of fees and its relatively low minimum spending requirement for the signup bonus. When you get the card, you can earn 20,000 bonus points worth $200 in travel after you spend $1,000 on your card within the first 90 days.
You’ll also earn 1.5 points for every dollar you spend on the card. If you’re a Bank of America customer, you can earn a 10% bonus on your points for maintaining an active checking account, too. Points can be used for statement credits to pay for flights, hotels, vacation packages, and other travel expenses.
This card has no annual fee and no foreign transaction fees, so you won’t be hit with any surprise charges when you use it overseas.
Chase Freedom UnlimitedSM
The Chase Freedom UnlimitedSM card lets you earn a flat 1.5% cash back for every dollar you spend. That can be a huge relief for people who you don’t like keeping track of rotating categories.
You’ll also earn a $150 signup bonus after you spend $500 on your card within the first three months of account opening. The fact that this card comes with no annual fee also means you can keep it in perpetuity without ever paying for the privilege.
Barclaycard CashForward™ World MasterCard®
The Barclaycard CashForward™ World MasterCard® also offers an easy 1.5% unlimited cash back on every purchase. Plus, every time you redeem your points, you get a 5% cash rewards redemption bonus to use toward your next redemption. New cardholders can earn $100 bonus after spending $500 in purchases in the first 90 days of account opening. There is no annual fee for this card.
Citi® Double Cash Card - 18 month BT offer
The Citi® Double Cash Card - 18 month BT offer from our partner Citi is a no-annual-fee card where you earn 1% cash back on every purchase you make plus another 1% back when you pay your purchases off. There are no category restrictions, no enrollments in rotating categories, and no limits on the amount of cash back that you earn, making this an attractive card for newbies.
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