Graham Stephan Says These Are the 5 Best Credit Cards for Beginners
Graham Stephan is a popular financial YouTuber who helps average people build wealth. He recently posted a video to share his five favorite credit cards for beginners in 2024.
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Here’s what made the list.
Discover It® Secured
Secured credit cards help you build credit when you can’t qualify for a normal card. Stephan says a lot of these have horrible fees and terms, but the Discover It® Secured Card is surprisingly good.
Here’s how it works:
You apply and submit a refundable security deposit starting at $200.
You use the card like a normal credit card.
If you do so responsibly, you can eventually qualify for an unsecured card and get your deposit back.
The nice thing about this card is that it gives you rewards just like a normal credit card. For example, you can get 2% cash back on gas stations and restaurants, plus unlimited 1% cash back on everything else.
There’s also no annual fee with this card. So, you can build your credit without having to pay anything to do so — as long as you pay off your bill on time each month and don’t accrue interest.
When you put it all together, it’s difficult to find a better credit card for a beginner, according to Stephan.
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The Petal Visa Card
Next on Stephan’s list is the Petal family of Visa cards. These aren’t secured cards, so you’ll need to qualify with a solid credit score. However, there are several options to choose from — including the Petal 1 Rise, which is for beginners.
The neat thing about Petal is how transparent it is about what it takes to increase your credit limit. The company’s Leap program lets you earn a credit line increase in six months automatically. You just have to make qualifying on-time payments for that long to do so. This differs from other companies, which often don’t clearly describe what it takes to increase your limit.
Some other highlights include:
Up to 10% cash back at select merchants
Credit limits as high as $3,500 for beginners
No fees whatsoever for the Petal 2 card
Just note that Petal uses a variable APR. This means your rate can change suddenly and without warning based on the company’s risk assessments. You can avoid the impact of this by paying your bill in full each month.
Wells Fargo Active Cash Card
Wells Fargo’s Active Cash Card is the next credit option Stephan recommends to beginners. It has no annual fee and offers 2% unlimited cash back on all purchases. This means you won’t have to worry about categories or quarterly activations to get your rewards.
The Active Cash Card also includes strong introductory offers for new users. For example, if you make $500 in purchases during your first three months, you’ll earn a $200 cash rewards bonus.
Wells Fargo is also offering a 0% introductory APR for the first 15 months you have the card. After that period expires, the rate changes to a variable APR, which will be in the range of about 20% to 30%.
American Express Blue Cash Everyday®
Stephan also recommends the AMEX Blue Cash Everyday card to beginners. Like the Wells Fargo card, it comes with a 0% introductory APR for 15 months, followed by a . You’ll also get 3% cash back on many everyday purchases, including:
Groceries
Online retail purchases
Gas
Additionally, this card includes access to AMEX’s “Plan It” program. This is sort of like buy now, pay later for your credit card bill.
With Plan It, you can split large purchases into monthly installments with a fixed fee while still earning reward points. This can be helpful when you need to buy something expensive but can’t pay for it right away.
Chase Trifecta
Stephan’s last recommendation is his most complicated. The so-called “Chase Trifecta” is actually a combination of three separate Chase credit cards — Chase Freedom Flex, Chase Freedom Unlimited and Chase Sapphire Reserve.
You can use these three cards together to increase the rewards you earn on every purchase. Here’s how it works.
The trifecta begins with the Chase Freedom Flex card, which offers 5% cash back in many categories. The rewards will accumulate in your Chase profile, where you’ll eventually be able to apply for the Chase Freedom Unlimited card.
This is similar to the Freedom Flex but gives you 5% back on any travel you purchase through Chase Travel. You also get 1.5% back on all purchases.
Eventually, you’ll qualify for the Chase Sapphire card. This is Chase’s premier credit card. It offers some of the best rewards in the industry, including bonus points on flights, hotels and car rentals.
Stephan admits it’s a complicated scheme that may not be right for everyone. But if you’re committed to using credit cards to get free things, he says this is one of the best ways to do it.
An Important Note on Credit Card Use
Credit cards make it possible to spend more than your budget allows. This can be dangerous. When you do that, you end up paying for the past well into the future.
For example, the laptop you can’t afford today could wreck your budget for the next 12 months if you put it on your credit card. This makes it really hard to get ahead financially.
That’s why it’s important to stick within your budget even after you open a new credit card. Try to pay your bill in full each month. You’ll still get rewards this way, but it won’t complicate your financial future.
Final Take
Stephan’s list of beginner-friendly credit cards features something for everyone:
If you’re just starting to build credit, the Discover It Secured card may be your best option.
If you want to work toward a higher credit limit, one of the Petal Visas may be a better fit.
Or, if you’re committed to taking full advantage of the reward benefits of credit cards, maybe you’ll pursue the Chase Trifecta.
Ultimately, the best credit card for you will depend on your goals and where you’re at in your credit journey.
All information about Amex Blue Cash Everyday card offers has been collected independently by GOBankingRates and has not been reviewed or approved by American Express. The Blue Cash Everyday card is not available through GOBankingRates.
The information related to Chase card offers was collected by GOBankingRates and has not been reviewed or provided by the issuer of this product/card. Product details may vary. Please see issuer website for current information. GOBankingRates does not receive commission for these products.
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