4 reasons why you should choose a cash-back card for your first credit card

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  • Cash-back credit cards are a great choice if you're looking to open your first card.
  • Many cash-back cards have no annual fee, and they're often easier to get approved for than points-earning cards.
  • Cash-back cards like the Citi® Double Cash Card and Chase Freedom Unlimited® are also easy to use, since the value of the cash back you earn will never change.
  • Make sure to research the best sign-up bonuses before you apply for a card.
  • See Business Insider's list of the best cash-back credit cards »

This page includes information about the Discover it® Cash Back and Discover it® Student Cash Back products, which are currently not available on Business Insider and may be out of date.

The first credit card I opened was the Discover it® Student Cash Back.

I loved the card at the time. It was easy to use, offered solid rewards, and taught me a lot about personal finance early in my life. The most important lesson being: always pay my credit card balance off on time and in full to avoid fees and keep my credit score high.

In fact, I still have the same credit card today. It's been updated to a regular Discover it® Cash Back since I graduated from college more than a few years ago, but other than the name change, it's the same card in terms of the rewards it earns me.

That's one of the reasons I love cash-back credit cards — they're a great first credit card to open and keep in your wallet forever. In fact, I think these cards are the perfect place to start if you're new to credit cards. Here are three reasons why.

They're easy to use

A cash-back credit card is one of the most basic and straightforward credit cards out there.

When using the card, you get rewarded on a percentage basis. For example, with a cash-back credit card that earns 1.5% back, you would earn $1.50 in rewards for every $100 you spend.

You have a wide variety of options

Cash-back cards are not only easy to use, but there's a large variety of them to choose from, including:

  • Flat-rate cards that earn the same amount of cash back on every purchase, such as the Citi® Double Cash Card
  • Cards with bonus categories, such as the Blue Cash Preferred® Card from American Express
  • Cards with rotating bonus categories, such as the Chase Freedom Flex℠ and Discover it® Cash Back
  • Card with customizable bonus categories, such as the Bank of America® Cash Rewards credit card

My Discover it® Cash Back is a rotating bonus credit card. It offers 1% cash back on every purchase, and every quarter it offers a different bonus category in which it earns 5% cash back on up to $1,500 in purchases.

On top of those major types of cash-back cards, there are various levels of cards to get approved for based on your credit score. For example, there are regular cash-back cards, student credit cards, and cash-back cards designed for people with a lower credit score.

Typically, the latter two are both easier to get approved for if it's your first credit card, but in general cash-back cards are often easier to get approved for than rewards credit cards like the Chase Sapphire Preferred® Card.

They typically have no annual fee

Arguably, this is the No. 1 reason that a cash-back card makes for a good first credit card, and it's important for two reasons.

For one, it saves you money. No one likes fees, and avoiding fees will keep more money in your pocket.

Second, it means you don't have to worry about canceling the credit card, which is huge when it comes to building your credit score.

One important metric in calculating your credit score is the length of your credit history. The longer you've had your credit card accounts open, the better — and opening up a no-annual-fee card as your first credit card ensures you never have to worry about canceling that card.

Compare that to if you opened a card with a $99 annual fee. If you cancel the card, you would shorten your credit history when it falls off your credit report in about seven years. However, if you keep the card forever, you'll be paying the $99 annual fee for the rest of your life.

Chase Chase Sapphire Preferred® CardCiti Citi® Double Cash CardChase Chase Sapphire Reserve®

They can be very lucrative

Sure, using premium credit cards is a great way to garner great rewards and enjoy benefits like statement credits and airport lounge access, but cash back cards can offer some great rewards too.

For example, if you used the Chase Freedom Unlimited® to earn 1.5% cash back on $12,000 in annual purchases ($1,000 per month) would yield $180 in rewards. All of that for simply using a credit card.

Plus, there are countless other perks like sign-up bonuses (sometimes as large as $200!), no foreign transaction fees (on many cards, but not all — so make sure to check), and more.

For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.

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