Best Credit Card Rewards Programs for Beginners (2024)

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• My top pick* for beginner credit card because it has an across-the board cashback rate
• A close second runner up* that can work to your advantage if you keep track of which spending categories are featured each quarter
• A really simple, straightforward credit card* bonus and rewards program

Rules you MUST follow as a credit card user

First things first, engaging in this kind of credit card activity ONLY makes sense if you are responsible with money. In order for this to be worth it, you MUST follow these simple rules:

• Know when and how much money you are spending
• Have enough willpower to not blow your money, i.e. ALWAYS make sure you have enough funds to cover for your spending
• ALWAYS pay your credit card balance in FULL, not just the minimum balance
• ALWAYS pay the FULL balance by the due date

Credit cards can be your best friend

There are tons of benefits to having a credit card, when used responsibly.

There’s convenience and also cash and travel rewards you can get for using them. They help you build credit history and improve your credit score, which is important when you want to make larger purchases like buying a house or starting a business.

Ways credit cards can be your worst enemy

But when used irresponsibly, they can be your downfall.

You end up paying a much higher price for an item if you are charged interest. This price goes up if you’re tacked with late fees as well. It will affect your credit history and credit score negatively if you don’t keep up with payments.

This will hurt you down the road when you want to borrow money from the bank.

If you have the habit of NOT paying your card in full each month, then please focus on paying off what current debt you already have.

However, if you have a good handle on tracking your credit card purchases and not carrying any balance with each passing month, then you should TOTALLY use them to their full advantage.

The best perk of all

The best way to make money from credit cards, and yes, I do mean MAKE money from credit cards, is by focusing on sign-up bonuses.

Our family loves opening credit cards as a side hustle. It has helped us earn thousands effortlessly. I want to share a beginner guide so that you can dip your feet into reaping the benefits of great credit card rewards programs.

How our family earned $1,000

Here was a simple breakdown of how our family earned $1,000 just from signing up for 2 different credit cards:

Chase Freedom:

• $150 sign up bonus, $100 referral bonus, 3 members in our family signed up for the card:
• $150 x 3 + $100 x 2 = $500

Chase Freedom Unlimited:

• $150 sign up bonus, $100 referral bonus, 3 members in our family signed up for the card:
• $150 x 3 + $100 x 2 = $500

Add the two together and that makes $1,000.

Is this safe to open multiple cards?

Yes and no.

This is safe to do as long as you use credit cards responsibly, which means paying off your full balances on all your cards by their due date. If, however, you already have credit card debt, then no, this is not a safe option. Also, see the next point below.

How does it affect your credit score?

In the short term, your credit score may go down a few points, but if you generally have good credit, then this isn’t really a problem.

In fact, in can help you in the long run because it looks good when you pay off your balance every single month. It helps you to build a good credit history.

One situation a responsible credit card owner may not want to do this, though, is if you plan to take out a loan in the near future (within a year or two).

When you ask a bank to loan you money, they will check to see your credit history. If they see you have opened a bunch of credit cards recently, then that might affect their decision to approve the loan or not.

If you want to check your credit score, you can do that through a site like Credit Sesame*. It’s totally free to sign up.

Spend strategy

In order to get the greatest benefit from these welcome bonuses, you'll want to charge expenses that you already incur on your credit card, NOT spend more than you need. Some ideas for what to charge on your credit card:

• Bills, such as water, electric, car insurance
• Budget grocery shopping
• Gifts for other people (make sure you're getting cash back from Rakuten* and discounts from Raise.com* to get the best deals!
• Donate to charity
• Pay taxes (note that a convenience fee is charged for using a credit card, so you will need to gauge if it's worth it to charge on a card)
• Pre-pay for future expenses: you can pay extra towards your bills and utilities or buy gift cards to stores you regularly visit to use later on after the 3 month spending period to qualify for your bonus is up

Best credit card rewards programs for beginners

Here are my top three picks that I want to share with an overview of the perks of each credit card.

Chase Freedom Unlimited

• Welcome offer: $150 when you spend at least $500 within the first three months of opening an account
• Annual fee: $0 for as long as the account is open
• Rewards: 1.5% cash back on all purchases
• Referral bonus: $100 when the person who signs up through your link successfully completes the welcome offer, receive up to $500 in referral bonuses per calendar year

This is a solid card to start off with because it offers a nice across-the-board cashback incentive for any purchase you make. It keeps things simple by not having to remember what type of purchase you are making (eg. paying a bill versus shopping at a hardware store, etc) to get the maximum credit card cashback.

Additionally, a low spending threshold to meet the bonus requirement makes it easier to use your credit card on necessities rather than being tempted to buy things you may not necessarily have bought if that $100 bonus wasn't on the table.

>> Link to sign up for Chase Freedom Unlimited* <<

Chase Freedom

Note this one is called the Chase Freedom Flex card now.

• Welcome offer: $150 when you spend at least $500 within the first three months of opening an account
• Annual fee: $0 for as long as the account is open
• Rewards: 5% cash back on purchases in activated bonus categories that change by the quarter and 1% cash back on all other purchases
• Referral bonus: $100 when the person who signs up through your link successfully completes the welcome offer, receive up to $500 in referral bonuses per calendar year

This is a runner up only because the cashback incentive is dependent on the category of your purchase. For someone who is just starting out with credit cards, this may be a bit confusing to keep up with, but if not, then this too is a solid option to go with.

Similarly to the Unlimited card above, a low spending threshold to meet the bonus requirement means you're more likely to spend it on things you would have already bought, not be pressured to buy more things just to meet the minimum spend requirement.

>> Link to sign up for Chase Freedom* <<

Discover IT

• Welcome offer: $50 when you make your first purchase within the first three months of opening an account
• Annual fee: $0 for as long as the account is open
• Rewards: 5% cash back on purchases in activated bonus categories that change by the quarter and 1% cash back on all other purchases
• Referral bonus: $50 when the person who signs up through your link successfully completes the welcome offer, receive up to $500 in referral bonuses per calendar year

This is a nice card to dip your feet into using credit cards if you haven't done so before and are unsure if credit cards are a thing for you.

With a smaller referral bonus and rotating categories for getting the highest cash-back, it will take a little bit more brainpower to maximize the benefits of this card than with the Chase ones.

>> Link to sign up for Discover IT<<

A note about referral programs

With both Chase credit cards, you are not notified when someone signs up for a card under your link. If someone does sign up and meet the requirements, you will see the bonus when you log into the rewards program dashboard.

The junk thing is that you will have to manually check on this. Also, it is unclear if the $500 maximum is for each card or if it’s combined on all Chase products.

For example, if you signed up for the Chase Freedom and referred 5 people and signed up for the Chase Freedom Unlimited and referred 5 people, I couldn’t tell from the terms and conditions if you will get $1,000, or if the max is $500 since they are both Chase products.

How these cards compare to each other

If you're feeling overwhelmed by the options and just want a straight recommendation on which card to get started with, here is what I suggest:

Chase Freedom Unlimited: If you can easily spend $500 within 3 months (not shopping sprees, but real costs like groceries, bills, utilities), but don't want to keep track of the different bonus categories so you get 1.5% across the board on any purchase.

Chase Freedom (Flex): If you can easily spend $500 within 3 months (not shopping sprees, but real costs like groceries, bills, utilities) and are able to keep up with the special 5% bonus categories.

Discover IT: If you don't want to worry about spending $500 in 3 months and just want to get a bonus with an eligible purchase.

Recap

This is a long post, so let’s go over the important points of this post:

• Be honest with yourself about your credit card habits. If you are in credit card debt, then pay off that first before you try out any of these.
• If you are responsible with credit cards, figure out if you plan to apply for loans in the near future. If so, you may want to hold off on this until you’ve been approved.

If you have the green light to try this out, these are the three I recommend:

• Chase Freedom Unlimited*
• Chase Freedom (or Freedom Flex)*
• Discover IT*

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