The 5 BEST Credit Cards For Beginners in 2021

What's up you guys, it's Graham here! So welcome to the year of 2021, where YouTubers like myself can finally make videos with 2021 in the title. But here on the channel, it's become kind of like an annual tradition to break down the best credit cards for beginners of each year, and this year is no exception. After all, over time, better offers come up, old cards become outdated, new cards are invented, and it's important to bring you the most up-to-date information as possible so you could make the best choice for your wallet.

So with that said, let's go over the best credit cards for beginners that you could get right now today in 2021. Not to mention, doing this correctly from the very beginning is so important because when you do this right and use these cards strategically, you could quickly increase your credit score. You could get the best interest rates any time you go and borrow money, and best of all, you could eventually use this to take advantage of some of the best credit card rewards out there that give you thousands of dollars of cash back, free travel, free hotel, free accommodations. And it all begins with this video, which is also free.

But I do have just one favor to ask of you before we start: if you wouldn't mind taking charge and swiping that like button for the YouTube algorithm, I'll even give you extra credit if you do it right now. Get it? Credit? Wasn't my credit card joke outstanding? Like outstanding balance? Or do you not have any interest in my jokes? Maybe I should discover something funnier! Fine, just hit the like button and I'll stop. Thanks guys, and we'll begin here.

All right, so first let's talk about the best credit card that you can get in 2021 if you have no prior credit card experience whatsoever. You want to get started from the very bottom, and you want to know your best choice for totally free. Well, without question, my number one choice would have to go to the Discover it Secured Card. Now here's the thing: I understand that I've talked about this credit card non-stop since the beginning of the channel as my top recommendation for everyone just starting out. But here's the thing: this credit card has consistently been the best of the best, year after year, without fail. And even after all of this time, not one single credit card has come up that's better than this if you're just starting out.

Not to mention, this credit card is literally the entire package of everything you need, all wrapped up in a tiny square piece of plastic. But here's why this card is so good and why you need to get it as your first credit card. Anytime you're just starting out in the credit card game and you have zero credit experience whatsoever, but you still want to build up your credit score so that one day you could be entered into the elite 800 credit score society of highly successful and financially literate adults that are responsible with money, I just made that up. But if that sounds like you, then this is where you begin.

Anytime you don't have any credit history because you're brand new to this, you're gonna have to start off with what's called a secured credit card. This just means you put down a refundable security deposit, and in return, they give you back a credit line of that exact amount. For example, you could give them a $200 security deposit, and they will give you back in return a $200 credit line. However, what makes Discover so much different from all the other secured credit cards out there is that Discover's credit card is actually good. See, most secured credit cards are aimed at people who have no idea what they're doing, so they nickel and dime you with fees, annual fees, and more fees to top it off.

But because you have this video, we all know that building your credit shouldn't cost you anything. And thankfully, Discover has zero annual fees. Discover also gives you what almost every other secured credit card does not, and that would be rewards. Now, I'll be honest: it's not like these rewards are going to want to make you quit your job anytime soon, but hey, at least it's something! And in this case, the Discover it Secured Card is going to be giving you 2% cash back on restaurants and gas stations, up to the first $1,000, and you will get unlimited 1% cash back on everything else.

But wait, there's more! They're also running a promotion where they will match your cash back for the first year. So this is really like you getting 4% cash back on restaurants and gas stations, up to the first $1,000, and unlimited 2% cash back on everything else for a credit card that anyone can get for totally free. Just ask yourself: do you want a 2% discount on everything that you buy? If the answer to that is yes, then go and get the credit card.

But if you thought it couldn't get even better than that, it does! Because Discover allows you to monitor your FICO score for free on their platform, so you can keep track of how your score is improving over time. And from there, all you need to do is pay off your balance in full on time at the end of every single month, and that way, you're gonna owe nothing in interest on any of your purchases. On a card, by the way, that's totally free that gives you unlimited 2% cash back on everything in the first year. So Discover wins yet again for my favorite secured credit card of 2021.

Now the second one on my list for anyone who wants to continue building their credit score for entirely free is a brand new one I have never mentioned before here on the channel, and that would be the Petal One Visa Card. Now, I'll admit this one does absolutely have a very strange name, but it is oriented around helping you build up a credit history without first having any credit history. I swear the whole process of building up your credit is so weird to me. Like, you need to have credit history in order to get a credit card, but you have to get a credit card to get credit history. So at least the Petal One Visa Card doesn't really play by the rules.

They say the Petal One Visa Card looks beyond your credit history by instead looking at your banking history. Your cash score shows your credit worthiness and can help you qualify for more credit and better rates. With this, you're going to be getting a credit limit anywhere from $500 to $5,000, and best of all, there's no annual fee. They also offer you anywhere from 2% to 10% back on select merchants, and their mobile interface helps you better understand how much you spend and what you'll need to do to pay off your balance in full, and that will help you keep better track of your finances.

Now, of course, yes, you might see this 19.99% to 29.49% interest and think, "But Graham, that's outrageous! 30% interest? That's awful! Why would you recommend this to us?" But truth be told, when you do this credit card thing correctly, you'll never have to pay a single penny in interest ever. The credit card interest rates that you see only apply if you don't pay off your credit card balance in full by the time it's due. And when you pay off your credit card entirely by the due date, then there's nothing left to pay any interest on.

So as long as you pay off your credit card in full, the interest rate that you see here makes no difference to you. So overall, I gotta say, the Petal One Visa Card is a good option for anyone who wants to build up their credit history. And also, there's really no harm in applying for multiple of these cards in the video since they all cost you nothing to keep open. That means the more positive trade lines you have from the very beginning, the faster your score is going to be going up.

Now, number three: this one has become a very popular credit card lately, and that would be the Apple Credit Card. Seriously, this is just becoming the company that does everything now: from phones, computers, headphones, credit cards, and maybe even soon one day possibly we could even see electric cars. But either way, I gotta hand it to them; they do have a very good credit card product for beginners. Now, I do want to clarify that the Apple Credit Card is not meant to be your first ever credit card if you have no credit history whatsoever because they do require you to have a credit score of around 600 or so.

So if you have nothing and you're just starting out, I would first recommend you start off with the Discover it Secured Card. But assuming you have some type of credit history, then the Apple Credit Card is actually a really good option. And here's what this could get you: first, there's no annual fee, and this is really important for anyone starting off because a large portion of your credit score is made up from what's called the average length of your credit history. Or in other words, the longer you keep your credit cards open for, the higher your credit score is going to be.

And when you close your credit accounts over time, those accounts are going to fall off your report, and that in turn is going to lower your score. Well, the good news is that cards like this cost you nothing to keep open forever, so you're never going to have to worry about paying $25 annual fees just to keep your oldest credit card open. Like with Wells Fargo, that's the mistake that I made: $25 a year gone for no reason! Wells Fargo is terrible.

Anyway, in addition to no annual fees, they're also going to be giving you daily cash back. Like when you use the Apple Credit Card with Apple Pay, you'll get unlimited 2% cash back on everything. You'll also get 3% cash back on Apple products and select merchants as seen right here. The app is also fantastic for tracking your expenses and learning good financial habits to make sure you pay off your credit card as soon as possible to avoid paying interest. Think of it almost like your personal finance tracker of your Apple Credit Card expenses, where you could see everything in one place, and you also get all of that in the form of a titanium credit card.

So overall, I would recommend this card, especially if you frequently buy Apple products because 3% adds up when you're buying $1,200 iPhones! I swear, these phones are just getting too expensive. Now after that, we got number four, and this is another one that I mentioned here on the channel non-stop, and this was actually one of the first credit cards I ever got, and that would be the Bank of America Cash Rewards Card.

Now, this is a credit card I would recommend adding into the mix after about six to twelve months or so because they do require you to be in good standing with your credit history in order to apply. But assuming you get approved, this is a really good one to have, and they also give you a cash bonus with no annual fee. Now, let's start off with that cash bonus: they're going to be giving you $200 when you spend $1,000 on the credit card within the first 90 days, which for most of us, we're just gonna naturally spend $1,000 over 90 days anyway. So this is basically just like free money, all for the price of just the 15 minutes it takes you to sign up for the credit card.

Now besides that, you're also gonna be getting 3% cash back in the category of your choice, 2% cash back in grocery stores and wholesale clubs, and 1% cash back on everything else. Then, if you're already a Bank of America Preferred Rewards member, you could get a cash back booster on the credit card, potentially turning a 3% cash back into a 5.25% reward. Now, the catch here to get the maximum benefit is that you have to keep a hundred thousand dollars in your Bank of America account, which... come on, nice try, Bank of America, but it's not worth it.

I gotta say the bank itself is just so-so, but to keep that much money in a Bank of America account is just... that's a no-go in my book. So let's just almost pretend like this offer doesn't even exist! But one more thing that this card offers you: if you're feeling kind of adventurous and have some self-control, they will give you 12 months free of zero percent interest. This is the only credit card I've mentioned so far that offers this, so if you want something that would essentially give you a zero percent loan for the first year, this is an option.

But just remember to always pay it off in full to avoid any interest in the future. But overall, I would have to give this one a good recommendation because the $200 cash bonus is really nice; it's a totally free credit card, it helps you build up your credit, and even though the rewards aren't incredible, it's a good one to keep in your wallet long-term.

The last one to finish this off is a relatively new card that just came out, and that would be the Chase Freedom Flex. And of course, as its name would suggest, it is a free credit card. Now, this credit card might just be even a little bit better than the Bank of America Cash Rewards Card. However, most likely you're going to need a slightly better credit score to get approved for this one, which is why I wanted to put it last. But if you could get it, this card is going to beat all of the other ones out of the water.

First, they're going to be giving you a $200 bonus when you spend only $500 on purchases within the first three months. And on top of that, they're gonna be giving you 5% cash back on grocery store purchases on up to $12,000 spent in the first year. Then in addition to that, we got quite a doozy! They're going to be giving you 5% back on up to $1,500 worth of bonus categories, 5% back on travel throughout the Ultimate Rewards portal, 3% back at restaurants and dining, 3% back at drug stores, and 1% back on everything else.

Now remember when I said the Bank of America Cash Rewards Card is going to be giving you zero percent interest for the first 12 months? Well, this one is going to be giving you zero percent interest for... wait for it... 15 months! Touche! That's why if you could get this card, I would plan to leave it in your wallet at all times. The cash back categories are fantastic, no interest with a sign-up bonus on a credit card that costs you nothing.

Oh, and they're also going to be giving you three months free of DashPass with activation if you like to order food. But honestly, using DoorDash is so expensive to order food like that, it's a big waste of money. So I wouldn't necessarily use this unless you're going to be doing it anyway. Now, as a final honorary mention here, I wanted to throw in the X1 Credit Card.

Now, unfortunately, I can't include it in this list because it's not really widely available yet, but once it comes out, I'll be sure to include it because I do think this would be a good credit card to get if you're just starting out if you're just building up your credit score because of how they're oriented. They wanted to design a smart credit card that gives a credit limit based on their customers' income, not their credit score. I think they've realized there are so many millennials out there that have a decent income but they've just never needed a credit card for anything, so they want to build that in between for people with income but who just don't have any prior credit history.

They're also going to be giving you two to four times points back on every dollar spent, but as of right now, we're not exactly sure how much each of these points is going to be worth, and it looks as though you could only redeem those points at select merchants, which I gotta say I'm not entirely a huge fan of. But on the bright side, they do give you a credit card based on your income with no annual fee that's also metal! So I got to give it an honorary mention here, but it's still too early to put it officially on the list.

And lastly, to put all of this together, if you want to know exactly what to do step by step to build up your credit score as fast as possible between all of these cards, here's what I recommend: First, go and sign up for the Discover it Secured Card with the $200 deposit. Then, once you get the credit card, all you need to do is put a few small expenses on the card each and every month, pay it off in full, and do this for six months. The second, if you want to expedite the credit building process just a little bit faster, around the same time you sign up for the Discover it Secured Card, you could also sign up for the Petal One Visa Card.

Now you're gonna have two trade lines going at the exact same time; that's going to help boost up your score. The third, after about six months of doing this, you're either going to want to apply for the Bank of America Cash Rewards Card or the Apple Credit Card. These are going to be your first unsecured credit cards, which means you don't have to put down a deposit with these cards. You're just gonna do the exact same thing: put a few small expenses on the card, then pay it off in full. That's it! Now fourth, after another six months of doing that, go and apply for the Chase Freedom Flex Card and enjoy that free $200 cash back.

And finally, five: after 12 to 16 months of doing this, you should have built up a credit score around 750 or so. And once you do that, you're gonna be able to take advantage of some of the best credit card rewards out there that give you free cash back, free travel, free hotels, and anything else you could imagine. Or if you do nothing and stay home all the time like me, well then you get bragging rights, and you can also get a low-interest rate mortgage anytime you go and leverage your money or decide to buy real estate.

And for me, I would say that is just as cool and a good reason to begin building up your credit score. So with that said, you guys, thank you so much for watching! I really appreciate it. As always, if you guys enjoy videos like this, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram; I posted pretty much daily. So if you want to be a part of it there, feel free to add me there.

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