Credit Cards for People Looking to Build Credit

One of the most obnoxious catch-22s is the old saying, “the best way to build credit is with credit”.  In other words, the prudent use of a credit card will result in an improved credit score and consequent boost in buying power.  The catch, of course, is that if you don’t already have credit, then it is very difficult to build credit.

If you have a credit score that is considered to be ‘Good’ (660-749) or ‘Excellent’ (750-850), chances are you won’t be interested in any of the credit cards recommended in this blog.  This blog is meant specifically for those with no or limited credit history, or that are attempting to rebuild their credit after the occurrence of some financially detrimental event.  A snapshot of all credit cards I recommend for building or rebuilding credit is included in the table below; thereafter followed by details on each credit card.  You will notice that I have included several secured credit cards.  In the event you are unable to qualify for an unsecured credit card, you will need to apply for a secured credit card.  A secured credit card requires that you provide a deposit that is held by the credit card company as a guarantee that you will pay your bill.  Generally, the credit limit that a secured credit card will extend is equal to the deposit provided to the managing company.  You will need to be careful in your selection of a secured credit card as high fees often accompany them.  That being said, it is essential that you begin building your credit by any means necessary – if it means obtaining a secured credit card, then so be it.

Journey Student Rewards by Capital One

I know this one is deemed for ‘Student’, but after reading the fine print I see no requirement for applicants to provide proof of enrollment.  The card has a relatively high APR at 19.80%, but requires only a ‘Fair’ credit score. What’s more, it allows card members to earn 1.00% cash back on all purchases and an additional 25.00% bonus on their cash back for each month they pay their bill on time.

Citi Forward Credit Card

Citi Forward provides card members the opportunity to earn rewards points to be exchanged for products and gift cards offered via the Citi store.  Card members earn 5X points for every dollar spent at restaurants, on books, movies, and music.  All other purchases earn one reward point per dollar spent.  Presently, card members can earn up to 8,500 bonus points when they sign up for paperless statements and make $250 in purchases within the first 3 months.  Up to an additional 1,200 bonus points per year will be awarded to card members that pay on time and stay within their credit limit.  Citi Forward also provides up to a 2.00% purchase APR reduction to those card members that make a purchase, stay under their credit limit, and pay on time for 3 billing periods in a row.

Discover Student Credit Card

The Discover Student Credit Card is overwhelmingly voted as the best student credit card because of its generous cash back rewards and its 0% for 6-months on purchases introductory promotion.  However, as you probably know, Discover Cards have a pretty limited merchant acceptance. Because of this, I’d recommend one of the other cards.

Public Savings Secured Visa

This is overwhelmingly voted as the best secured credit card. It has a $75 application fee, but no monthly or annual fees.  The Public Savings Secured Visa allows card members to select their own credit limit between $300-$2000. It also offers a 0% APR for 6-months promotion.  However, as stated previously, secured credit cards require that you provide a deposit in the amount of your credit limit to guard the company against default.  Thus, this is an option of last resort.

Orchard Bank Classic MasterCard and Visa

The Orchard Bank Classic MasterCard and Visa are no-frills cards.  Orchard Bank has relatively lax approval qualifications, meaning it is a good card for ‘Fair’ credit scores.  You will notice that both the MasterCard and Visa were included on my list; I honestly can’t tell the difference between the two, other than the obvious fact that one is a MasterCard and one is a Visa.  I suppose it could be for personal preference.

Capital One Secured MasterCard

The Capital One Secured MasterCard is another secured card that is designed for those individuals looking to rebuild their credit.  Compared to many of the other secured and prepaid credit cards out there, the Capital One Secured Credit Card has relatively low fees.  As with most other secured cards, this one comes with an annual fee, but at $29 it is fairly nominal.