At a Glance

Ready to start building your credit? Consider using a starter credit card! These cards are designed for people just getting into building their financial portfolios and typically have more flexible requirements than more premium-tiered cards. However, keeping an eye out for their terms and conditions is essential so you don’t get caught off guard by unexpected fees or high-interest rates.

In this article, you’ll learn:

What is a starter credit card?

A starter credit card is a type of credit card specifically designed for individuals who are just starting to build their credit. These cards typically have lower credit limits and more lenient approval requirements than other credit cards.

Types of starter credit cards 

1. Secured credit card

A secured credit card is one of the most common types of starter credit cards. With a secured credit card, you must provide a security deposit upfront, typically equal to your credit limit. This deposit acts as collateral for the card and reduces the risk for the credit card issuer. It also allows individuals with little or no credit history to be approved for a credit card.

Secured credit cards are an excellent option for building credit because they report your payment history to the credit bureaus, just like any other credit card. By consistently making on-time payments and keeping your credit utilization low, you can establish a positive credit history and improve your credit score over time.

Learn more: What Is a Secured Credit Card?

2. Unsecured credit card

Unlike a secured credit card, an unsecured one does not require a security deposit. Though these cards exist, they’re typically harder to get if you don’t have a solid credit card history, as the approval process may be more stringent than secured cards.

Unsecured credit cards designed for people with no or low credit often come with lower credit limits and higher interest rates than more premium-tiered cards. However, they can still be a valuable tool for building credit if used responsibly. 

3. Student credit card 

A student credit card is another type of starter credit card that is specifically designed for college students. These cards often have lower credit limits and more lenient approval requirements, making them accessible to students just starting to build their credit.

Learn more: What is a Student Credit Card?

How can a starter credit card help build my credit score? 

Starter credit cards are a great option for those new to credit or with a limited credit history. They allow individuals to establish a credit history and demonstrate responsible credit management. By using a starter credit card responsibly, such as making on-time payments and keeping balances low, individuals can build a positive credit history and improve their credit score.

Reasons to get a starter credit card

There are several reasons why getting a starter credit card can be beneficial:

  1. Building credit history: One of the main reasons to get a starter credit card is to start building your credit history. By using the card responsibly and making on-time payments, you can establish a positive credit history, which is vital for future financial endeavors such as getting a loan or mortgage.
  2. Establishing creditworthiness: Lenders and financial institutions often look at your credit history to determine your creditworthiness. Having a starter credit card and maintaining a good payment history can prove that you are responsible with credit and increase your chances of being approved for future credit applications.
  3. Learning responsible credit management: Using a starter credit card can teach you important financial skills, such as budgeting, managing credit utilization, and making regular payments. It allows you to practice responsible credit management habits early on, which can benefit you in the long run.
  4. Access to credit: A credit card can provide a convenient and secure way to make purchases, especially online. It can also be helpful in emergencies when you need to cover unexpected expenses.
  5. Potential rewards and benefits: Some starter credit cards may offer rewards or benefits, such as cashback, travel perks, or discounts at certain retailers. While these may not be as extensive as those offered by premium-tiered cards, they can still provide some added value.
  6. A gateway into better card options: Some banks, like Capital One and Discover, offer starter credit cards that can be upgraded into more mainstream cards with better terms and more benefits. If you’re interested in getting better rates for your credit, a starter card can be an excellent way to establish a good relationship with a credit card issuer. 

How long should I keep a starter credit card open?

The length of time you should keep a starter credit card open can vary depending on your financial situation and goals. However, there are a few factors to consider when deciding whether to keep or close a starter credit card:

  1. Credit history: Keeping a starter credit card open for a longer period can help establish a longer credit history, which can be beneficial for your credit score. Length of credit history is a factor that lenders consider when evaluating creditworthiness.
  2. Credit utilization: Closing a starter credit card can potentially increase your overall credit utilization ratio if you have other credit cards or loans. This ratio measures the amount of credit you are using compared to your total available credit, and a higher ratio can negatively impact your credit score. If your starter credit card has a low credit limit, keeping it open can help lower your overall credit utilization ratio.
  3. Annual fees: Some starter credit cards may have annual fees. If the card has a yearly fee and you are not utilizing the benefits or rewards offered, it may be worth considering closing it to avoid paying unnecessary fees.
  4. Upgrading options: Some starter credit cards offer the opportunity to upgrade to a more premium-tiered card with better terms and benefits. If your starter credit card offers this option, keep it open until you are eligible for an upgrade.


A starter credit limit is the initial credit limit assigned to a person when they first open a starter credit card. This limit is typically lower than what someone with an established credit history might receive. The credit limit is determined by the credit card issuer based on factors such as the individual’s income, credit score, and credit history (if applicable). As the individual demonstrates responsible credit management, they may be able to request a credit limit increase over time.

There are several reasons why you may not be approved for a starter credit card:

  1. Limited or no credit history: If you have never had a credit card or any other type of credit account, you may not have enough credit history for a credit card issuer to assess your creditworthiness. In this case, start with a secured credit card or explore other credit-building options.
  2. Low credit score: Your credit score is a numerical representation of your creditworthiness, and a low credit score can make getting approved for a credit card more difficult. Factors that can contribute to a low credit score include missed payments, high credit utilization, and a history of delinquencies or other negative marks on your credit report.
  3. High debt-to-income ratio: Credit card issuers may consider your debt-to-income ratio when evaluating your application. If you have a high level of debt compared to your income, it may indicate that you have a higher risk of not being able to make your credit card payments.
  4. Incorrect or incomplete information on your application: It’s important to ensure that you provide accurate and complete information on your credit card application. Any errors or omissions could result in a denial.
  5. Too many recent credit inquiries: If you have recently applied for multiple credit cards or loans, it can raise red flags for credit card issuers. They may see this as a sign that you are in financial distress or trying to obtain too much credit too quickly.

If you are having trouble getting approved for a starter credit card, review your credit report, address any negative factors, and consider alternative options such as a secured credit card or becoming an authorized user on someone else’s credit card.

Deciding when to cancel your starter credit card can be a tricky decision. On one hand, keeping it open can help build your credit history and increase your overall available credit. On the other hand, if you’re not using the card anymore or it has a high annual fee, it might be time to move on. Before making a final decision, consider how long you’ve had the card and how it’s impacting your credit score. If you’ve had the card for a while and it’s helped you establish a positive credit history, it might be worth keeping it open. However, if the card is dragging down your credit utilization ratio or causing unnecessary fees, it could be time to cancel. Ultimately, the decision to cancel your starter credit card should be based on your financial situation and goals.