Best Credit Cards For Beginners

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Best Cards For Beginners

One of the most frustrating adventures for young people, particularly when coming out of school, is getting that first credit card. With no credit history, the deck is clearly stacked against you. But that doesn’t mean you’re without options. You can get a student credit card, or a secured credit card, even with no credit history.

And if those cards aren’t available for whatever reason, there are some strategies you can use to build sufficient credit and get your first credit card.

Student credit cards

There are credit cards available specifically for students. They have lower credit limits, but relaxed credit guidelines. They recognize a student’s limited financial experience and capacity. Banks will offer these cards as a way of getting the jumpstart on the student’s business after graduation.

Some popular student credit cards include:

Journey® Student Rewards from Capital One®

This offer requires Average/Fair/Limited credit.

    Card Highlights

    • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
    • There’s no limit to the amount of cash back you can earn, and rewards won’t expire for the life of the account
    • Get access to a higher credit line after making your first 5 monthly payments on time
    • View Journey® Student Rewards from Capital One® details and how to apply »

This card comes with an APR of 24.99% (Variable), but $0 annual fee. You can also earn one percent cash back on all your purchases. If you pay on time for the month, you’ll get 1.25 percent cash back.

Expect to start with a low credit limit, but your line can be increased after making your first five monthly payments on time. The card gives you regular access to your credit report, as well as $0 fraud liability if your card is ever lost or stolen. It also provides collision damage waiver coverage when you rent a car.

Discover it® for College Students

This offer requires Fair credit.

    Card Highlights

    • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
    • Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants or Amazon.com up to the quarterly maximum each time you activate. Plus, 1% unlimited cash back automatically on all other purchases.
    • Good Grades Rewards: $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.
    • View Discover it® for Students details and how to apply »

This card also has no annual fee, and comes with an introductory purchase APR of 0% for the first six months. After that, a variable APR ranging from 14.24% – 23.24% Variable applies.

You’ll get five percent cash back each quarter on revolving categories, like gas stations, grocery stores, restaurants or Amazon.com. All other purchases come with one percent cash back.

The card will provide $20 cash back for each school year your GPA is 3.0 or higher. You’ll also get access to your free FICO credit score.

Secured credit cards

You can get a credit card secured by a savings account. The credit line usually matches the amount in your savings account. You’re charged interest on your purchases, and you must make monthly payments. But your payment history will be reported to the credit bureaus, enabling you to build your credit. In the meantime, you’ll have access to a fully usable credit card.

Our favorite secured credit cards include:

Discover it® Secured Card

This offer requires Please refer to issuer’s website credit.

    Card Highlights

    • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
    • Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
    • We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
    • View Discover it® Secured Card – No Annual Fee details and how to apply »

The Discover it® Secured Card comes with no annual fee, and a standard purchase rate of 24.24% Variable APR. You must put up a security deposit for the credit line, which can be refundable in as little as eight months.

You’ll get 2 percent cash back at restaurants and gas stations, for up to $1,000 in combined purchases per quarter. You’ll also get 1 percent cash back on all other purchases. The card comes with your free FICO credit score and $0 fraud liability on unauthorized purchases.

Capital One® Secured Mastercard®

This offer requires Limited/Bad credit.

    Card Highlights

    • No annual fee, and all the credit building benefits with responsible card use
    • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
    • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
    • View Capital One® Secured Mastercard® details and how to apply »

The Capital One® Secured Mastercard® comes with $0 annual fee, and a 24.99% (Variable) APR purchase rate. You’ll be required to make a security deposit of $49, $99 or $200, which may be refundable.

You’ll get an initial credit line of $200, which will be increased any time you deposit more money. If you make your first five monthly payments on time, your credit line can be increased with no additional deposit needed.

When looking for a secured credit card, don’t overlook local banks and credit unions.

For example, DCU Visa Platinum Secured Credit Card is offered with a reasonable APR and no annual fee. DCU also doesn’t charge fees or higher rates for cash advances and balance transfers. You’ll have the benefit of free auto rental collision damage waiver. The card works with Apple Pay, Android Pay and Samsung Pay.

Other strategies to build credit so you can get a credit card

If you’re not a college student, or you don’t have savings available to make a collateral deposit to get a secured credit card, there are other ways you may be able to build your credit to the point where you will be eligible for a credit card.

Co-signed loans

This usually involves a car loan or some other type of installment loan. If you don’t have a credit history, you can often get a loan approved if it is co-signed by someone with a high credit score. You’ll make the monthly payments, and the pay history will be reported to the credit bureaus. It might take a year or more of on-time payments before you have a credit score sufficient to get a credit card.

Become an authorized user on someone else’s credit card

This will usually be a parent. You’ll have to be added as a fully authorized user, which means they’ll ask for your Social Security number. As long as the monthly payments are made on time by you or the primary user, it will help to build your credit rating.

Credit Builder loans

These work like secured credit cards, but you don’t have to have money in a savings account or for a security deposit.

This is how it works: You take out a credit builder loan for $1,000. The money is immediately deposited into a savings account in your name, but acts as collateral for the loan. Monthly payments are deducted from the savings account. As the months passed, and payments are made, you begin to build a credit history and credit score, even though you never actually make a direct payment.

Summary

Having a credit card can help you build a credit history. But you do need some sort of a history to even qualify for most cards. Here’s the steps you can take to start building credits. Plus, some cards that don’t require a credit history.

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