Best Credit Cards to Start Building Credit

Comparing the top credit cards for building credit

A closer look at the best credit builder cards

Chime Credit Builder Visa® Credit Card

Rewards rate: none

Annual fee: $0

Intro APR: N/A

Regular APR: N/A

Signup bonus: None

Our verdict: The Credit Builder Visa from Chime is relatively bare bones but in a good way. It has no annual fee, charges no interest, and doesn’t require a credit check. Plus, it doesn’t use a traditional deposit to back your credit line. Instead, it uses the balance available in a linked Chime account to determine how much credit you have.

Pros:

• No credit check.
• No annual fee.
• No interest charges.

Cons:

• No rewards.
• No signup bonus.
• Must be a Chime customer.

Apply now: Chime Credit Builder Visa® Credit Card

Discover it® Secured Credit Card

Rewards rate: 2% cash back at gas stations and restaurants.

1% cash back on all other purchases.

Annual fee: $0

Intro APR: 10.99% intro APR on Balance Transfers for 6 months.

Regular APR: 28.24% Variable.

Signup bonus: None

Our verdict: One of the rare secured cards to offer cash back rewards, the Discover it Secured card is a great tool for building credit and getting a few perks. Plus, responsible cardholders will find it doesn’t take that long before Discover will offer you the option of converting your card to one of their regular, unsecured credit cards which offer more perks and benefits without the need for a security deposit.

Pros:

• No annual fee.
• Balance transfer signup offer.
• Offers rewards.
• Can be upgraded to a regular Discover card.

Cons:

• No rewards rate.
• Requires minimum $200 deposit.

Apply now: Discover it® Secured Credit Card

Capital One Platinum Secured Credit Card

Rewards rate: none

Annual fee: $0

Intro APR: N/A

Regular APR: 30.49% Variable

Signup bonus: None

Our verdict: Most secured cards will require a deposit that’s at least a few hundred dollars, but Capital One’s secured card can be opened with as little as $49 (depending on your eligibility).

Pros:

• Potentially low startup deposit.
• No annual fee.

Cons:

• No signup bonus.
• No rewards rate.
• High-interest rate.
• Requires deposit.

Apply now: Capital One Platinum Secured Credit Card

Petal® 1 “No Annual Fee” Visa® Credit Card

Rewards rate: 10% cash back at select merchants

Annual fee: $0

Intro APR: N/A

Regular APR: 25.24%-34.74% Variable

Signup bonus: None

Our verdict: Petal’s 1 “Family” card works a little differently than typical secured cards because it analyzes your banking history instead of just your credit score, making it easier for those who are new to, or have had difficulty getting, credit to start building a solid history.

Pros:

• No annual fee.
• 10% cash back at select merchants.
• Using banking history to determine creditworthiness.

Cons:

• No signup bonus.
• No ability to change your due date.
• High-interest rate.

Apply now: Petal® 1 “No Annual Fee” Visa® Credit Card

What to look for in a credit card for building credit?

When looking for a credit card to start building credit, there are a few key features to consider:

1. Secured vs. Unsecured: Secured credit cards require a security deposit, which typically becomes your credit limit. This can be a great option for individuals with no credit or a low credit score. Unsecured credit cards do not require a deposit but may have higher interest rates or fees.
   Learn more: Secured vs. Unsecured Credit Card
2. Low fees: Look for credit cards with minimal fees, such as annual fees or monthly maintenance fees. These fees can eat into your available credit and make it harder to manage your finances.
3. Credit limit increases: Choose a credit card that offers the opportunity for credit limit increases over time. This can help improve your credit utilization ratio, a factor that affects your credit score.
4. Reporting to credit bureaus: Ensure that the credit card you choose reports your payment history to major credit bureaus. Regularly making on-time payments will help to build a positive credit history.
5. Rewards and perks: While not essential, some credit cards for building credit offer rewards or perks such as cashback, points, or discounts. These can be a nice bonus as you build your credit.

How to use a credit card to build credit?

Using a credit card responsibly is the key to building credit. Here are some tips on how to do so:

1. Make on-time payments: Pay your credit card bill in full and on time every month. Late payments can negatively impact your credit score.
2. Keep your credit utilization low: Aim to use only a small percentage of your available credit. Experts recommend keeping your utilization below 30%.
3. Avoid carrying a balance: While it’s important to use your credit card regularly, try to pay off the balance in full each month. Carrying a balance can result in high-interest charges.
4. Monitor your credit: Regularly check your credit report to ensure all information is accurate. You can request a free credit report once a year from each of the major credit bureaus.
5. Limit credit applications: Applying for multiple credit cards or loans within a short period can negatively impact your credit score. Be selective and only apply for credit when necessary.
6. Stay within your budget: Use your credit card for necessary expenses and avoid overspending. Creating a budget can help you manage your finances and avoid accumulating unnecessary debt.

Methodology

The methodology used to calculate the best cards for building credit relied on several factors, with the most prominent of those being:

• The required credit score to apply successfully for the card.
• The additional benefits offered by the card beyond rewards.
• The reward rate of the card, if applicable.
• Overall difficulty in securing a credit card with fair credit.
• The history of the card issuer itself.
• Any potential costs associated with owning a credit card.

The product information provided here is based on research conducted up to a specific date and may have changed. For the latest and most accurate information, we recommend you visit the respective card’s website before proceeding.

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