A rule of thumb writers are taught is to use first person sparingly in stories. There’s a very good reason for this. Often, first person stories can read more like someone’s journal than like a story. The temptation in first person stories is to talk more about the main character’s experience of the world than action, telling instead of showing.
Done well, however, it can also make the story more immediate and emotional. Using third person can remove the read from the story, but first person can be a way of drawing the reader in.
While most books don’t use first person, several successful ones do, like Twilight, 50 Shades of Gray, and Odd Thomas. When trying to sell stories to magazines, it’s not uncommon for them to state that they do not buy stories written in 1st person.
In first person, you’re writing from only one point of view, and everything is filtered through the narrator’s perspective. Like most people, the narrator sees things happening only one dimensionally, and the narrator can only guess at what happens offscreen. It’s a limited viewpoint, much like life. If I want my friend how her day went, I have to call her and listen to her perspective. It’s never going to be 100% accurate, because it’s filtered through her perceptions.
In contrast, there are several different ways to write in 3rd person. There’s third person omniscient, limited third person, or multiple narrators. A third person limited narrative is when the story follows one person primarily, but a less knowledgeable point of view than a first person narrative. Third person omniscient narration is a God-like perspective that can see all, including all characters’ thoughts and feelings. Romance novels are frequently told from this perspective so that we can “hear” both our hero and heroine’s thoughts. In third person, instead of hearing about my friend’s day, I could “see” it, in live action.
Multiple narrators can be told from either a first or third person point of view, and it is up to the narrator to decide whose perspective is more accurate. I tend to dislike stories told from a first person, multiple narrator, as all the “I” can be dizzying.
I think that third person, in general, is more useful, though I have written short stories in first person when I think it’s most appropriate. Part of what I like about writing is that there are no hard and fast rules, but I think it’s important to know basic guidelines. If I’m going to do something differently, it’s important to know why.