Aleksandar Georgiev / Getty Images
To build your credit, you have to use your credit – but how can you qualify for a credit account with great terms if you don’t have a credit history or a limited history? The financial industry is addressing this exact problem by creating credit cards for beginners. Many are designed for students and have security measures in place to help users develop responsible credit habits.
Whether you don’t have a credit history or it’s limited or imperfect, you always have options that are worth considering if you need a credit card. Here are some of the best credit cards for beginners.
Secured credit cards
When it comes to building your credit, starting with a secured card may be a safer option for you and the card issuer. When you are approved for a secured card, you deposit a fixed deposit amount. Your line of credit is equal to this amount. If you miss payments, the issuer takes your deposit.
Some of the best secure cards for beginners are as follows:
Best Card Paired with Bank Account: Personalized Cash Rewards Secured by Bank of America
Get started on the right foot with a secured credit card issued by Bank of America Bank. Bank of America’s Secure Personalized Cash Rewards Card lets you start creating credit with a secure 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 Secure Card with a deposit ranging from $ 300 to $ 4,900. Choose the category on which you want to receive 3% discount. You will automatically get 2% cashback on groceries and 1% cashback 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 no-charge line of credit starts at $ 200, making it easy to build credit on an affordable starter card.
Add an authorized user such as a dependent or a spouse to use the card as a family unit.
Better transition to unsecured: Sable One
The Sable One credit card knows that a secure credit card can be burdensome. To get around these limits, there is a series of milestones that will allow users to get unsecured credit in as little as four months. The Sable Secured card does not require a credit check and users can be approved in three minutes.
Sable’s graduation promise states that if users make payments on time, spend at least $ 250 per month, keep a limit of $ 500 for four months, and get direct deposits of at least $ 500 per month for their job, they can be considered to switch to unsecured credit. .
Cards for students and young adults
Young adults and teens need to build their credit from scratch. Starting with a card designed for their specific needs is the best way to do it responsibly.
Ideal for students: Check it out Student Chrome
You don’t need to have an established credit score when you apply for the Chrome Discover it Student card. This is because the card is designed only for students who need to build up their credit.
Get 2% cash back on gas and restaurants to get the most out of your frequent spending. Plus, get paid for good grades when you earn $ 20 credit for each school year with a GPA of at least 3.0.
Best for a Good Financial Story: Petal 1
Even if you don’t have a credit history, you may already be good at managing your finances. Petal helps you qualify for a credit card by reviewing your savings history and current income and giving you a cash score.
Petal 1’s Leap program helps users increase their six month loan amount. To do this, they must have made payments on time and kept their credit rating within a certain range.
Best card for international students: deserve EDU
International students face the double-edged sword of being likely young with no established credit history and coming from overseas, where the credit records they have may not be transferred to the United States. This is why the Deserve EDU card is the best option for them.
Deserve EDU is specially designed for international students. It does not require a social security number to apply.
The Deserve EDU card also includes benefits applicable to students, such as cell phone protection, 1% cash back, and an Amazon Prime student membership for one year.
Cards with benefits
Just because you don’t have a long credit history doesn’t mean you should be missing out on benefits. These cards reward you even without a credit history:
Best for Study Abroad: Capital One Journey Student Rewards
Students heading to the great unknown can take their Capital One Journey card with no transaction fees abroad. No annual fees and unlimited 1% cash back make this an attractive card at home or abroad.
Students can stay in control of their accounts by texting Eno, the digital assistant who can provide real-time account updates.
Great for cash back rewards: check out Student Cash Back
The Discover it Student Cash Back card offers a generous 5% cash back rate in rotating categories that reflect places where students shop frequently, such as Amazon and grocery stores.
Designed to allow students to accumulate their credit, the Discover it Student Cash Back card is designed to reward typical purchases by young adults and integrates digitally with the app so that the student can control it wherever they go. find.
Great for Music and Sports Lovers: Capital One SavorOne Rewards for Students
For students who want to build credit while enjoying the events they love, check out the SavorOne Rewards card for students. Users get a huge 8% cash back on qualifying purchases of Vivid Seats tickets to sporting events, concerts and even theatrical events.
Users can also redeem other rewards for cash and enjoy no overseas 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 is important to target one that is open to low credit scores or no credit history. This is because every credit card application pings your credit history. This can lower your score, so if you have a bad credit history, keep in mind that frivolous requests are a bad idea.
In addition to requesting cards that you think you qualify for, look for cards with a low APR and no annual fee. You don’t want to pay more 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, like balance alerts or budgeting tools that help you get used to managing your debt appropriately.
Don’t be distracted by the rewards
There are many great credit cards with rewards, but they are generally designed for those with a longer credit history and may incur fees. Introductory cards can have rewards, but make sure they’re not just a distraction from the higher APRs or annual fees. Look for a card with the lowest APR you’re eligible for and no annual fee before you even look at the rewards.
Getting the most from your startup credit card
The number one job of your starting credit card is to build your credit history. Get the most out of it by using it responsibly. You may be advised to only use it in an emergency, but this is counterintuitive for building your credit. You should use your card to establish your score because your credit score measures how well you manage to pay off your debts.
Instead, use your credit card to make recurring payments that you know you can repay each month, like those to your Netflix account or cell phone 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 each month.
The information is correct as of October 7, 2021.
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack Inc., an online marketing company serving leading banks, credit unions and other financial services organizations. Some of the businesses mentioned in this article may be customers of ConsumerTrack Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective and no institution, client or otherwise, is paid for specific inclusion or placement. Any opinions, analyzes, criticisms or recommendations expressed in this article are those of the author alone and have not been reviewed, endorsed or otherwise approved by the companies included in the article. All fees and rates are subject to change at the discretion of the issuers. Some interest rates may be short-term or promotional offers only, and additional conditions may need to be met in order to obtain the interest rates shown. Prices and availability may vary by region. Check the terms and conditions before opening an account.
GOBankingRates bases its assessment of âbestâ and âbestâ products on the aforementioned metrics to create a basis for comparison. This rating is an approximation of the âbestâ and âbestâ designed to help consumers find products that may be right for them. There might also be other options available. Consumers should consider a variety of options appropriate to their situation.