Please note that the products and services I mention here are things that I have personally used. This post does contain affiliate links. That means that when you click on one of my links and successfully get approved for a credit card, I do receive a small cash bonus. There is absolutely no harm done to you and if you don’t want to click on my links, that’s totally okay.

Are you a first-time credit card owner? Do you want to build credit, but you’re not sure where or how to start?

You’ve been keeping tabs on your spending and have a generally good grasp of money, but don’t know the first thing about how to build credit.

I was in your exact same shoes a few years ago. 

When I was in high school, my English teacher told me, “Get yourself a credit card. Buy a pizza and charge that on your credit card. Do that every time you order pizza and pay it off in full each month. Within a few years, you should have yourself a decent credit score.”

You may be wondering, why am I telling you this stuff? 

Because it does work.

But why a pizza though? The pizza scenario above is just one example of how someone can easily start building credit for the first time. After all, pizza is one of the easiest things you can buy and pay off right away.

To this day, I still think about these words because they helped me build my credit score when I was starting out as a first-time credit card owner.

Each time you charge a pizza and pay it off in full, you’re basically telling the credit card companies that you’re a responsible person. As you continue to pay off your credit balance in full each month, you’re more likely to increase your credit score—and when it does, so does your credit limit (this is the amount of money you can charge on your credit card).

How Do I Open a Credit Card If I Have No Form of Credit?

If you don’t have a credit card, one of the easiest ways is to apply for a card online or via your local credit union.

A common one that’s super easy to apply and get approved for is a student credit card.

There are many banks that allow student credit cards. These are cards catered towards high school or college students. Since banks know that college or high school students don’t usually have credit, the requirements to apply are usually lower so you’re more likely to get approved for the card. 

I opened my very first credit card with Discover when I was a senior in college, and because I was a student, I was quickly approved for the Student Cash Back Credit Card. If you’re not a student, another great alternative is the Secured Credit Card. This card is a great option for people who are just starting out and want to build their credit.

I only recommend things that I use and personally love and I recommend Discover because it is:

• Convenient and easy to get approved
• Offers cashback bonuses, so that means when I make purchases, I get a small amount of money back. Think of this as free money! My current credit card offers a 5% cashback on everyday purchases on select purchases and 1% cashback on all other purchases. That means if I spend $100 on Amazon, I get a $5 cashback reward. Sweet!
• More secure than my debit card because it offers another extra layer of security.

It’s super easy to sign up. Here’s how:

1. Visit the Discover It Student Cash Back Rewards.
2. Click on Apply Now.
3. Follow the steps on the screen and enter all the necessary information.
4. Wait a few minutes for the computer to go through your application and determine if you’ve been approved or not.

Now, you may have heard that it’s not good to open too many credit cards at the same time because this can negatively affect your credit score—and that’s correct.

But because this is considered a “soft inquiry”, it doesn’t affect your credit score. 

Congrats! You’ve now officially opened your first credit card. 

What To Look for in a Credit Card?

Very good question! Most credit cards share the same features, but some offer better perks than others. As someone who is just starting out, I recommend you look for the following features—especially if you decide to open a credit card with Discover.

• Annual Fee: This is how much it would cost to keep your card. Think of it as a membership fee. Some credit cards, especially those with really good perks like American Express, have a $97 fee every year. Make sure to keep an eye on this one!
• Cashback and/or Rewards bonus: If you like to travel or spend a lot of money, this is the credit card for you. For some credit cards, instead of getting cashback, you get reward points that you can use for travel or hotel. Cashback is a form of payment. How it works is that you essentially make a certain amount of money back on every purchase. This can range from 1% to 5% of the total purchase. This is why I recommend the Discover It Cash Back Rewards card because you get 5% cashback at certain times of the year and 1% cashback on all purchases. You also get this amazing perk if you sign up for the Student Cash Back Credit Card. As long as you’re in college, you get 5% cashback on purchases you made through Amazon, grocery stores, restaurants, gas stations, and while using Paypal. Exactly what many college students are already using on a day-to-day basis!
• Sign-up bonuses: Some credit cards, especially if the company sends you personalized invitations, will give you a cash bonus for opening and getting approved for a credit card. You may have seen promos that promise to give you $200 or $250 for spending $3,000-$6,000 within the first six months of opening a credit card. These are the promos I am referring to.
• APY: This is super important! This is basically how much interest you will be charged on your purchases if you don’t make the minimum payment each month. For example, if you purchase a $100 jacket and don’t pay the minimum payment, you will be charged a 25% interest. That means you would pay $100 plus an additional $25. Read that fine print!
• Bonus APY: This is important! Most companies will make really attractive offers to convince you to open a credit card with them. For example, the credit card may charge you a 0% APY for the first 12 months, but it will jump to 24% after that. You want to make sure you’re comfortable with the proposed APY.

These are general guidelines and tips, but in essence, do your research! Want more tips or resources? I have curated a list of helpful resources in my Resource Library. Definitely check it out!

But, What if You’re Not a College Student?

All of the above still applies, but instead of getting the Discover It Student Cash Back Rewards card, you should get the Discover It Secured Credit Card.

This is a great option for people who are fresh out of college and want to build some credibility before they open a credit card. 

This is also for you if you tried to apply for a Discover credit card, but got rejected because you didn’t have enough credit.

How Does a Secured Credit Card Work?

A Secured Credit Card is tied to a certain amount of money and you’re limited to however much money is in that card. The money in that account is yours, and not the company so you’re really using money that you have, not money that the credit card company has.

For example, if you’re approved for a secured credit card, and you put $500 in there, you’re only limited to $500. 

In this way, you’re not overspending and wracking up unnecessary debt. As you continue to make purchases and pay them in full each month, you will steadily build your credit. When you’re at a spot where you’re finally ready to upgrade to a better credit card, you can do so.

How to Open a Credit Card with Discover 

I have been using the Discover It Cash Back Rewards Card for the past three years and I love it. 

I chose this credit card because out of the different options, this one met my needs. 

I do a lot of shopping, and in my opinion, getting money on purchases I’m already making every day sounds like a great idea. Here are the current perks I get with my Discover It Cash Back Rewards Card:

• $8,800 dollar limit. I started with $500, but because I’ve been diligently paying off my balances in full each month without ever missing a payment in the past three years, I’ve been able to increase my credit limit to $8,800.
• 5% cashback on certain months. This is the current cycle:
  • Jan-Mar: Earn 5% cashback at grocery stores, Walgreens, and CVS.
  • Apr-Jun: Earn 5% cashback bonus at gas stations, wholesale clubs, and select streaming services.
  • July-Sept: Earn 5% cashback bonus at Restaurants and PayPal.
  • Oct-Dec: Earn 5% cashback bonus at Amazon.com, Walmart.com, and Target.com.

Please note that you’re only able to earn up to a max of $75 in cashback bonuses for each cycle.

Taking it One Step Further

If you’ve been paying off your balances in full each month, have a fairly good credit score, and want to take it one step further, consider opening a credit card with bigger and better perks like American Express.

Again, I am a huge fan of American Express and I only recommend products that I personally use and like.

I do have to pay a $97 annual fee to keep my credit card, though, but for the perks that I get? It’s worth it. Here are some of the perks I currently get with my credit card:

• Amex Offers & Benefits: American Express actually curates a list of promotions (think of these as coupons) that you can use at stores you may already shop at. Popular stores include Columbia, American Eagle, Shutterfly, Forever 21, and more. All you need to do is clip these offers and when you make a purchase at the store, you get some money back. For example, Forever 21 has a 3.2% cashback promo that if I were to make $120 purchase, I’d get $3.82 back.
• 6% cashback on US supermarkets, 6% cashback on select U.S. streaming subscriptions, 3% cashback at U.S. gas stations and on transit, and 1% cashback on other purchases.
• Free 2-day shipping on eligible items at a growing network of 100+ online stores with ShopRunner.
• Coverage for damage to or theft of a rental vehicle in a covered territory—I know, crazy perk here!
• Purchase protection and more!

I also want to add a plug for Zogo, a free app that American Express referred me.

Zogo is an app that teaches you to finance topics that range from basic how to save money, how to buy a car and a house, to more complex topics such as how to invest.

You earn points for going through each module and for every 5,000 points, you can use it to redeem for a $5 gift card. It’s very easy to acquire points and within two weeks, I was able to redeem over $20 worth of points.

Read more about in my Resource Library.

You’re Responsible For Your Own Credit Score

Maintaining a good credit score requires diligence and good habits. You need to discipline yourself before you open a  credit card because the idea of borrowing money now and paying it later may sound like a great idea, but it actually isn’t.

Evaluate your situation wisely. Think about what you’re doing now and how it will impact your future.

Good Credit Card Habits To Have

I opened my Discover credit card when I was a senior in college and my starting line was $500, but in just three years I was able to increase that to $8,800.

My current credit limit at American Express is $6,000 and I plan to continue paying off my balance in full each month so I can increase this limit to $10,000. 

Here are some general good credit card habits to help you use your credit card responsibly:

• Pay off your balance in full each month
• Use less than 30% of your credit line
• Check your statement for credit card fraud

The purpose of this article is to try to teach how to open a credit card when you have no credit. No matter how fabulous credit card perks appear to be, if you do not maintain some good habits, you will only ruin your credit score!

Was this helpful? If you want more tips or resources, make sure to sign up for my newsletter and check out the resource library.

What are some tips or advice do you have because I’d love to know!