Personal Finance

I'm a slight beginner. What is the best cash back credit card for me? 

Austin Smith

Published: March 1, 2025 9:57 am

Your first job, your first apartment, your first credit card. Being a young adult in America involves a whole lot of firsts, and you’re expected to accomplish all of them shortly after graduating high school or, at the very least after leaving college.

And this is the situation facing our latest inquirer from the Reddit mailbag (let’s call him “Tim”).

Tim just “left” college (he dropped out after a year), which sounds like a setback, but Tim’s actually doing pretty alright for his age. Currently 19, he already has a job and is working on building up enough of a credit history to apply for his first real credit card.

He’s also got a couple of credit cards… sort of.

As Tim explains, his parents added him as an authorized user on their Shell Gas card at age 18, so he’s got the benefit of at least a year’s vicarious exposure to their credit history working for him now. He followed that up by applying for what he calls “a Paypal credit card that is specifically for online purchases (not the mastercard)” in his own right. That sounds like what PayPal (Nasdaq: PYPL) itself calls “PayPal Credit,” which it describes as a “revolving line of credit” and which is essentially a buy now, pay later (BNPL) credit plan. It’s not quite the same thing as a credit card, though, and may be easier to get than an actual credit card.

Which as it turns out, is what’s next on Tim’s to-do list.

A real credit card for Tim

Tim’s putting the PayPal BNPL plan to good use with occasional online purchases, which should help to build up his credit FICO score over time. Tim doesn’t do a whole lot of shopping online, however. He doesn’t do a whole lot of shopping, period (waytago, Tim!) actually, spending only about $300 a month, with the bulk of that going to restaurants and gas.

Most of these charges he pays with a debit card, which does nothing for his credit history, and also gives Tim nothing in the way of card “rewards,” whether of the points, miles, or cashback varieties. Recognizing that he’s therefore missing out on what is essentially free money, Tim would like to get a no annual fee rewards card that will help to defray the cost of what shopping he does do.

Now what kind of card should he try to get?

How to pick your first real credit card

Let’s first break the bad news to Tim: Getting a first credit card can be easier attempted than accomplished. Credit card companies are issued by banks after all, and banks famously prefer to lend money to people who don’t need it, as opposed to those that do.

Young adults like Tim, with limited credit history, often struggle to get approved for a first credit card. This struggle can be complicated, too, as applications (that are rejected) accumulate on their credit reports as “hard inquiries,” depressing the credit score and making it even harder to get the next application approved!

That said, Tim has made a good start, and has already made all the right moves he reasonably can be expected to have made, to increase his chances. Again, he’s started with becoming an authorized user on a parent’s card, he’s taken a job so that he can show some income, he’s proceeded to win at least some kind of credit line in his own name, and he’s accumulated a year or more of credit history to support his application.

So yes, I’m saying there’s a chance Tim will be approved.

With fingers crossed, therefore, what kind of card should Tim try to get?

Considering his young age, limited income, and limited spending, I see little reason to seek a travel rewards card at this time. Probably a card paying a modest cashback reward is a more useful tool for Tim. In the best possible world, he’d specifically want to get a no annual fee card which offers superior cashback rewards in the categories where he spends the most, specifically, restaurants and gas.

The good news here is that there are several possibilities to choose from.

Capital One (NYSE: COF) for example, offers a “Savor” credit card that pays 3% on restaurant purchases (and groceries as well), and 1% cashback on all other purchases. The “Freedom” credit card from Chase likewise pays 3% on restaurant purchases, with rotating categories (that sometimes include gas) paying 5% cashback.

An even better option might be Wells Fargo’s (NYSE: WFC) Autograph card, which pays 3 “points,” which can be converted into cash, for purchases of both gas and restaurant meals. Yet another option might be US Bank’s (NYSE: USB) Cash+ Signature card, which pays 2% cashback on both gas and restaurant purchases, plus 5% cashback on two other categories of spending, which the user can choose, and which can include such big-ticket items as cell phone service and home utilities.

That could come in handy when Tim moves on to his next big quest, after securing his first credit card: Moving out of his parents’ house, and getting his first apartment, too!