You might feel overwhelmed to choose from all the credit cards available in the market today, especially if you have no or a poor credit score. However, building or repairing credit is wise to create new opportunities with banks, landlords, and employers. So let us get to know about the best credit cards to build credit.
Secured vs. Unsecured Credit Cards
What is a Secured credit card?
All credit cards will offer credit (obviously!), rewards, and charge interest. Secured credit cards require an initial deposit, typically $200, which will become your credit limit. So the more credit you want, the greater your deposit will be! This deposit is collateral to the card issuer and gives them security in the event of delayed payments. It is also refundable when you settle all your expenses and close your account.
What is an Unsecured credit card?
On the other hand, unsecured credit cards do not require a deposit for those who cannot make a deposit or do not wish to. They have the same features as a secured hard but charge higher than average interest rates and additional fees.
What is bad credit?
Bad credit is usually a credit score lower than 579. This category will typically hold those who have defaulted on loans or failed to make credit card payments. It may also include people who have no credit history; these are people who have never taken a loan or had a credit card. This is a quick read for you to discover the best credit cards to build or rebuild credit. Learn about the best credit card that will suit your needs and credit history. Here are the most popular credit cards available for all categories of consumers.
Best For Students
It is crucial to start building credit from a young age in your journey to achieve financial freedom when most of us are students. Further, we have presented pros and cons regarding popular student credit cards.
Deserve® EDU Mastercard for Students
This is even suitable for all the international students out there who lack a credit history.
Pros:
- No annual fee
- A social security number is not required
- Cell phone protection benefits
- No foreign transaction fees
Cons:
- Cash-back rewards do not exceed 1%
Discover it® Student Cash Back
Pros:
- Earn 5% cash-back on everyday purchases at various stores.
- Attractive welcome bonus
Cons:
- Compulsory to be a US citizen and college student
- Cash-back categories must be activated each quarter
Best For International Applicants
Deserve Digital First Card™
Pros:
- There is no annual fee
- You do not need to make security deposit
- No prior credit history needed
- There is no charge for purchases made outside of the United States
Cons:
- The amount of cash-back you earn is divided into tiers based on how much you spend each billing cycle.
Best For Those With Average Credit History
Capital One® Platinum Credit Card
This is designed for those with an average credit score and considering building up their credit score.
Pros:
- No annual fee
- Travel accident insurance, auto rental collision damage waiver, and roadside assistance are just a few of the perks available.
- After your first five monthly payments, you can access a higher credit limit.
- There is no charge for purchases made outside of the United States.
Cons:
- No rewards program
Best For Low Deposits
Secured Mastercard® from Capital One
This is for those seeking a secured card but cannot afford the typical $200 deposit; you can find varying options of minimum security deposits.
Pros:
- No annual fee
- There is no charge for purchases made outside of the United States
- Flexible payment due dates
Cons:
- It takes 2-3 weeks to get your card after applying
- No rewards program
Best for those new to credit
Petal® 1 “No Annual Fee” Visa® Credit Card
This is for the newbies and does not require an upfront security deposit.
Pros:
- No annual fee
- No security deposit required
- Rewards program
Cons:
- Rewards available only at selected merchants
Best for established credit
Chase Freedom Flex℠
Pros:
- No annual fee
- Up to 5% reward rate
- Attractive rewards rate in several other categories
Cons:
- 5% cash-back on travel bookings made via Chase
How To Build Your Credit Score Over Time?
With time and the right credit card, one can improve their financial standing.
- Have a plan
Always try your best not to spend beyond your limits and, most importantly, make all your credit payments on time.
- Free yourself of debts
Always stick to a plan and delay your other indulgences when dealing with debt.
- Check for credit report errors.
Always be alert for errors in reports as they are familiar and submit a dispute in the event of discovering mistakes.
- Be patient
The journey of building a credit score can be long, but the key is to maintain responsible financial behavior, and with time you will enjoy the rewards. After securing a credit card, brace yourself for the learning process of managing your spending within the credit limit. As long as you spend responsibly and settle all your payments on time, you are good to go!
