To build your credit, you need to use your credit — but how do you qualify for a credit account with favorable terms if you have no credit history or a limited one? The finance industry copes with this exact problem by creating credit cards for beginners. Many are designed for students and have safety measures in place to help users learn responsible credit habits.
Whether you have no credit history or one that is limited or imperfect, you still have options that are worth considering if you’re in need of a credit card. Here’s a look at some of the best credit cards for beginners.
Secured Credit Cards
When it comes to building your credit, starting with a secured card can be a safer option for both you and the card issuer. When you are approved for a secured card, you put down a set deposit amount. Your credit line equals this amount. If you miss payments, the issuer takes your deposit.
Some of the best secured cards for beginners are the following:
Best Bank Account-Paired Card: Bank of America Customized Cash Rewards Secured
Start off right with a bank-issued secured credit card from Bank of America. The Bank of America Customized Cash Rewards Secured card lets you start building credit with a secured card that offers cash back. Your cash back will be deposited into a linked Bank of America or Merrill account.
Open the Bank of America secured card with a deposit running from $300-$4,900. Choose the category you want to receive 3% back on. You will automatically get 2% back on groceries and 1% back on other purchases.
Best Low Deposit: Capital One Platinum Secured
You can get a secured card from Capital One with a deposit of just $49. This fee-free credit line starts at $200, making it easy to build credit on an affordable starter card.
Add an authorized user such as a dependent or spouse to make use of the card as a family unit.
Best Transition to Unsecured: Sable One
The Sable One credit card knows that a secured credit card can be limiting. To get around these limits, there are a series of milestones that will get users to unsecured credit in as little as four months. The Sable Secured card does not require a credit check, and users can get approved in three minutes.
Sable’s graduation promise states that if users make on-time payments, spend at least $250 monthly, keep a limit of $500 for four months and get direct deposits from work of at least $500 a month, they can be considered for a move to unsecured credit.
Cards for Students and Young Adults
Young adults and teens must build their credit from nothing. Starting off with a card built for their specific needs is the best way to do this responsibly.
Best for College Students: Discover it Student Chrome
You don’t need to have an established credit score when you apply for the Discover it Student Chrome Card. That’s because the card is built just for students who need to build their credit.
Get 2% cash back on gas and restaurants to make the most of your frequent spending. Plus, get paid for good grades when you get a statement credit of $20 for each school year with a GPA of at least 3.0.
Best for Good Financial History: Petal 1
Even if you don’t have a credit history, you may already be good at maintaining your finances. Petal helps you qualify for a credit card by looking at your savings history and current income and giving you a Cash Score.
Petal 1’s Leap program helps users increase their credit amount at six months. To do so, they must have made on-time payments and maintained their credit score within a certain range.
Best Card for International Students: Deserve EDU
International students face the double-edged sword of most likely being young without an established credit history and coming from abroad, where any credit records they have may not transfer to the U.S. That’s why the Deserve EDU card is the best option for them.
Deserve EDU is designed specifically for international students. It does not require a Social Security number to apply.
The Deserve EDU card also comes with perks applicable to college students, such as cellphone protection, 1% cash back, and an Amazon Prime student membership for a year.
Cards With Perks
Just because you don’t have a long credit history doesn’t mean you have to miss out on perks. These cards reward you even without a great credit history:
Best for Study Abroad: Capital One Journey Student Rewards
Students headed out into the great unknown can take along their Capital One Journey card for no foreign transaction fees. No annual fees and unlimited 1% cash back make this an attractive card at home or abroad.
Students can stay on top of their accounts by texting Eno, the digital assistant that can provide real-time account updates.
Best for Cash Back: Discover it Student Cash Back
The Discover it Student Cash Back card offers a generous cash-back rate of 5% in rotating categories that reflect places students frequently shop, such as Amazon and grocery stores.
Made for college students to build up their credit, the Discover it Student Cash Back card is designed to give rewards on the typical purchases of young adults and integrates digitally with the app so the student can control it from wherever they are.
Best for Music and Sports Lovers: Capital One SavorOne Rewards for Students
For students looking to build their credit while enjoying the events they love, check out the SavorOne Rewards for Students card. Users get a whopping 8% cash back on eligible Vivid Seats purchases of tickets to sporting events, concerts and even theater events.
Users can also redeem other rewards for cash and enjoy no foreign transaction fees. Rewards can be applied directly to Amazon purchases.
What To Look For in a Starter Credit Card
When choosing a starter card, it’s important to target one that is open to low credit scores or no credit history. That’s because each application for a credit card pings your credit history. This can lower your score, so if you do have some credit history, keep in mind that frivolous applications are a bad idea.
Besides applying for cards you expect you will qualify for, look for cards with low APRs and no annual fees. You don’t want to pay more money to use your own finances.
Some starter credit cards come with tools that help you balance your new credit. Look for these types of tools, such as balance alerts or budgeting tools that help you get used to managing your debt appropriately.
Don’t Get Distracted by Rewards
There are a lot of great credit cards with rewards out there, but these are typically designed for those with a longer credit history and may come with fees. Introductory cards might have some rewards, but make sure they’re not just a distraction from higher APRs or yearly fees. Look for a card with the lowest APR you qualify for and no annual fees before you even look at rewards.
Getting the Most Out of Your Starter Credit Card
The number one job of your starter credit card is to build your credit history. Make the most of it by using it responsibly. You might be advised to only use it for emergencies, but this is counterintuitive to building your credit. You must use your card to build your score because your credit score rates how well you handle paying back debt.
Instead, use your credit card to make recurring payments that you know you can pay off every month, such as those for your Netflix account or your cellphone bill. Treat the card like cash — don’t spend on it unless you have the money in your bank account. Then pay the balance in full every single month.
Information is accurate as of Oct. 7, 2021.
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