The Best Starter Credit Cards for Building CreditPosted:
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Your credit score is used by lenders to determine everything from eligibility for loans and mortgages, to setting interest rates and more.
But if you’ve never had a credit card before, then you also haven’t had a credit score.
Not having a credit score can make it tougher to get buy a car, a home, get a loan and to make other major purchases. Having a credit card can be great for covering emergency expenses, making it through to your next payday, and for earning rewards and cash back.
Unfortunately, many credit card companies won’t give a standard credit card to someone with no credit or bad credit. However, there are plenty of starter credit cards that you can get that can help you start building or improving your credit score.
Keep reading to learn a few of the best starter credit cards for every type of cardholder.
Best Secured Credit Cards
When you don’t have a credit history, even obtaining a credit card in order to start building a credit score can be a challenge. After all, one thing that banks look at to determine how much of a credit line you’ll be eligible for is your existing credit history.
A high enough yearly income and other factors may be enough to help offset your lack of credit history. But if you’re like many first-time credit card owners, you may not have this either.
Luckily there’s a solution. Secured credit cardsoffer a way for those with bad credit or no credit at all to obtain a credit card.
Rather than using your credit score to determine a line of credit. Instead, you’ll make a cash deposit. This deposit often then becomes your credit line. You may be able to add cash later to increase your credit line.
If you think that a secured card is for you, check out these great secured starter credit cards available today.
Discover It Secured Card
To open a Discover it Secured Card, you’ll need to put up a minimum of $200 or a maximum of $2,500 as a deposit. Once your account has been open for eight months, Discover will review your account. If they find it stable and without concerns, they’ll then return your security deposit.
One major benefit of the Discover it Secured Card that makes it one of the best starter credit cards is that cardholders can earn rewards. This trait is unique among most other secured credit cards.
You can earn 2 percent cash back for the first $1,000 you spend on gas and restaurant purchases each quarter. You’ll also earn 1 percent cash back on all other purchases.
Another perk that is beneficial to first-time credit card users is that Discover will waive your first late-fee. While you will certainly want to do your best to avoid paying late, this is a nice fall back if you do forget.
Plan to travel? This credit card has no foreign transaction fees. It also has no annual fee and cardholders get a free Fico score, making it easier for new credit card holders to start learning about credit scores and building their own without spending a lot of money on fees.
Capital One Secured MasterCard
If you do have a small amount of prior credit history, then the Capital One Secured MasterCard might be the right choice for you.
Depending upon your credit history, you will need to pay a $49, $99, or $200 security deposit in order to open your account. Once you’ve been approved, you can then increase your security deposit in installments, up to $3,000.
This security deposit will become your credit line. The more you put towards it, the more you will be able to borrow on later.
If you don’t want to pay to increase your credit line and don’t mind waiting, simply make your first five monthly payments on time. After that, Capital One will increase your credit line.
This is one of the best starter credit cards for several reasons. It has no annual fee, no foreign transaction fees, and gives you access to CreditWise, which provides free credit scores, credit reporting, and other tools to help you manage and build your credit score.
Best Unsecured Credit Cards
If you don’t have money to put up for a security deposit, then secured cards might not be the right starter credit cards for you.
While you will need some sort of credit history or proof of financial stability, unsecured credit cards won’t cost you anything to open.
Unfortunately, that also means that they have higher requirements for prior credit history or proof financial stability. But if you have one or the other, unsecured cards can be a great way to get a higher credit line and other benefits.
Here are a few of the best-unsecured starter credit cards for anyone looking to build and improve their credit.
CreditOne Bank Unsecured Visa
No credit score at all yet? No problem.
The CreditOne Bank Unsecured Visa makes it possible for anyone to request a card, whether you have no credit or a bad credit score.
You can request this card without negatively affecting your credit score.
Once you’re a cardholder, you’ll earn rewards for purchases that you already make every day. You’ll earn 1 percent cash back for purchases made at gas stations, grocery stores, and on services like internet, mobile phones, cable, satellite, and more.
CreditOne Bank makes it easy for new credit card owners to work to build a good credit history. You can sign up for text or email notifications when your bills are due or your credit runs low. You can even choose your monthly payment due date to ensure its one you’ll be more likely to remember and stick to.
You’ll also get free access to your credit score and credit summary to watch your credit grow.
The CreditOne Bank Unsecured Visa may carry an annual fee, ranging from $0 to $99 depending upon your finances.
Capital One Platinum Credit Card
Not sure whether you have enough credit or a good enough score to open an unsecured credit card? Then the Capital One Platinum Credit Card is a good choice.
Capital One allows you to enter your information and request a decision on whether you’re eligible for the card.You can find out whether or not you would be eligible for the card before your information gets recorded. Unlike with other credit cards, this information won’t get reported, so it won’t hurt your credit.
Once you’ve been approved for the Capital One Platinum Credit Card, you’ll get an assigned credit line. Like with the secured Capital One card mentioned earlier in this list, if you make five monthly payments on time, you’ll get an increase on your credit line.
This card features no annual fee and no foreign transaction fees. There are also other cardholder perks you’ll enjoy, like extended warranties on purchases, fraud protection, and even travel accident insurance.
Also, like with the secured Capital One credit card, you’ll get access to the resources on CreditWise. This includes free credit scores, credit management, and more.
Best Student Credit Cards
Banks know that many college students haven’t had the chance to start building their credit. They often don’t have house payments, car payments, or sometimes even rent payments if they’re still living in a dorm or are still living on their parents’ money.
That’s why many banks offer student credit cards. With fewer fees and lower credit lines, these are designed for students looking to build credit before graduation.
Plus, you’ll be earning points and cash back that can be used to buy textbooks, eat in dining halls, or to pay for any other expenses or splurges that you choose.
Keep reading to learn about a few of the best starter credit cards for students.
Bank of America Cash Rewards for Students
Students looking to build their credit without having a strong credit history or a big income should consider the Bank of America Cash Rewards Card for Students.
This card doesn’t require the security deposit of a secured credit card. It has no annual fee and a 0 percent introductory APR for the first year.
This is one of the best starter credit cards for students for a variety of reasons. With no foreign transaction fees, you can easily take this card with you on a study abroad trip or a semester-break adventure.
Bank of America gives you a free credit score so that you can watch yours grow. You’ll also get access to their streamlined online and mobile banking apps. These make it easy to pay your bills online and plan ahead for your finances.
As a bonus, you’ll also enjoy rewards. You’ll get 3 percent cash back on gas, 2 percent on grocery store purchases, and 1 percent on everything else.
If you spend $500 in your first three months as a cardholder, you’ll also get a bonus $150 statement credit.
Citi ThankYou Preferred Card for College Students
Another of the best starter credit cards for students is the Citi ThankYou Preferred Card. Offered only to students with a valid student email address, this card features no annual fee and an introductory 0 percent APR for 7 months.
Spend $500 in your first three months as a cardholder and you’ll get 2,500 bonus points. Those are redeemable for a $25 gift card, electronics, or other rewards.
You’ll also earn additional points on your everyday purchases. You’ll earn 2x points on all dining and entertainment expenses. You’ll also earn 1x point on all other purchases.
Your points have no expiration date and no limit to the number of points you can earn each quarter or year.
Journey Student Rewards from Capital One
With no annual fee, no foreign transaction fees, and unlimited fraud protection, the Journey Student Rewards Card from Capital One is another of the best starter credit cards for students looking to build good credit.
From the start, you’ll earn 1 percent cash back on all purchases. Make all of your payments on time and you’ll have the chance to increase your cash back earning to 1.25 percent.
Plus if you make five monthly payments on time, you can gain access to a higher credit line. This will give you a chance to continue to prove that you are handling your finances well, and can further boost your credit score.
But be careful not to let the increase in credit go to your head. Falling behind on payments will be costly, and it can be easy to get overwhelmed.
If your finances are deemed eligible, you’ll also get access to Visa Platinum Benefits. Some benefits include extended warranty coverage, auto rental insurance, 24-hour services, and more.
The Journey Student Rewards Card from Capital One is also great for students who are new to having a credit card because it offers a 25 day grace period to make your payments.
While you should start practicing paying on time to build good habits, this can be great for excusing the occasional mistake as you’re learning to make your payments.
Choosing the Best Starter Credit Cards to Start Building Credit
Any of the starter credit cards on this list can be beneficial to start on your journey to build or improve your credit score.
By making your payments on time, never spending more than you can pay off within a reasonable amount of time, and monitor your financial situation carefully, these starter credit cards can act as stepping stones.
Once you’ve built up your credit score little by little, you’ll be able to get other credit cards or increase your credit line with ease.
To begin working on your credit score, start by choosing any of the starter credit cards on your list. If you don’t want a secured credit card, then consider one of the cards with an option for requesting a decision without reporting it to creditors.
This will keep you from further damaging your credit score if you happen to not get approved for your chosen starter credit cards.
Now that you’ve chosen the right starter credit cards and began working on your credit history, you might be wondering what other cards you’re eligible for. Check out our other recommendations for great credit cards to start searching for your next one.
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