If you need help building your credit, the right credit card can make all the difference. Unfortunately, it can be challenging to pick through the advertisements to find the right credit card for your situation.
Luckily, Tradeline Supply Company, LLC is here to help. We’ll cover what you should know about credit card credit-building—you’ll see beyond the credit card advertisements and learn smart and easy credit-building strategies that will save you a substantial sum of money over the course of your life.
It is natural to shy away from credit cards if you have bad credit, particularly if you’ve had issues managing your credit cards in the past. But when used correctly, a credit card can be a handy financial tool to improve your credit.
What makes a credit card a useful tool? If you can spend within your means and make on-time monthly payments each month, your credit score is likely to improve. However, credit cards are a double-edged sword. If you can’t keep up with your monthly payments, then your credit report could suffer.
Before you open a credit card, take a minute to be honest with yourself. Are your finances in a place to consistently make on-time payments in full for the charges you put on your credit card? If not, it might not be a smart move to open a credit card.
But if you are ready to manage your credit responsibly with regular on-time payments, then a credit card could be the best step. However, not all credit cards are created equally. With literally thousands of credit card opportunities out there, it can be difficult to determine the best option. That’s especially true when you consider all of the advertisements trying to steer you in their direction.
The good news is that we don’t have any conflicts of interest with credit card advertisers. Instead, we can provide our honest opinion about which credit cards might be the right fit for your situation. Without further ado, let’s jump into the top credit card choices on the market for those trying to build their credit score.
We searched high and low for the best credit cards on the market. Below, you’ll find out the top credit card options for each award category. With this guide, it should be easy to find the right credit card for your situation.
Here are our top picks for each category.
If you have no credit history or report at all, you aren’t alone. According to the Consumer Financial Protection Bureau, around 26 million Americans were ‘credit invisible’ in 2015. Without a credit history of any kind, it can be tough to make major purchases because you may not be able to get a loan.
But even if you don’t have any credit history now, you can start building your credit profile today. The good news is that your credit history is a blank slate. Although you may not have a credit record yet, that means no bad marks are already working against you.
Here are two top cards for credit invisible consumers looking to establish a credit history.
Who It’s Best For: Credit invisible consumers that want to build credit.
How to Use: The Capital One Platinum Secured Credit Card is not a traditional credit card. Like other secured credit cards, you’ll have to make a security deposit to open your account. With this card, you’ll need to make an initial deposit of $49, $99, or $200 to get started.
Once the account is open, you can raise your credit limit by depositing more money. You can build credit by making on-time payments as you use the card. Over time, you may earn your deposit back. Plus, Capital One may help you upgrade to an unsecured Platinum card if you prove that you can consistently make on-time payments.
The biggest downside to this card is that your monthly income must exceed mortgage or rent payment by at least $425. Unfortunately, that could be a dealbreaker for some.
Who It’s Best For: Credit-builders who want to enjoy some rewards.
How to Use: The Discover It Secured Credit Card offers the rare opportunity to earn cash back with a secured credit card. You’ll earn 2% cash back on purchases at gas stations and restaurants. The limit on cash back is 2% for the first $1,000 in combined purchases in these categories. For purchases over that limit, you’ll earn 1% cash back. Plus, you’ll earn 1% cash back on all other purchases.
Like other secured cards, a security deposit is required to set up a credit limit. With the Discover It Secured Credit Card, you will have to make a minimum security deposit of at least $200.
As you build credit, you can start by making a deposit of at least $200 with this credit card. Once the card is open, as with any form of credit, it is important to make on-time monthly payments. After seven months as a customer, Discover may refund your security deposit if you’ve maintained ‘good status’ on your credit accounts for the prior six months.
There are many reasons why you might just be starting to build your credit score. One common reason is that you are a student who is dipping their toes into smart money management. Here is a great card to help you start building your credit.
Who It’s Best For: Students seeking to build credit. As a student, you are just starting out on your financial journey. Even if your income is not very large, college can be a good time to start building up your credit.
How to Use: The Discover It Student Cash Back card doesn’t have any annual fees to contend with. But you have the chance to earn up to 5% cash back on your purchases. That could make a difference for any budget! Although the cash back categories rotate each quarter, you’ll find the chance to earn 5% cash back on up to $1,500 of purchases over the course of each quarter. The available categories include grocery stores, gas stations, restaurants, Amazon, and more. Plus, you also get 1% cash back on all other purchases.
Use this card responsibly to build your credit. In addition to the credit-building opportunity, don’t forget to take advantage of the cash back options.
Buying a car is a major financial commitment. A high credit score can unlock more attractive financing offers when purchasing a vehicle. Additionally, if you have a good credit score, you may be able to unlock additional savings with the help of the right credit card.
In fact, you may save hundreds of dollars by choosing to put part of your car purchase on a particular credit card. Here is one option to consider if you want to pocket points or cash back in exchange for your car purchase.
Who It’s Best For: Those with good credit seeking to enjoy cash back on a major purchase.
How to Use: You’ll need good credit to tap into the rewards offered by the Chase Freedom Unlimited card. Although not all dealerships will allow you to put your car purchase on a credit card, it could be worth asking about. As a Chase Freedom Unlimited cardholder, you would earn 1.5% cash back on that purchase. Depending on the vehicle, that could add up quickly!
For example, let’s say that a car dealership allowed you to put $10,000 of your car purchase on the card. That would equate to a savings of $150 on your vehicle purchase. If you have great credit and want to save some money on your car purchase, opening this credit card ahead of time could be a smart move.
A home purchase is a major expense that most homeowners choose to finance with the help of a mortgage. But typically, lenders are only willing to work with borrowers that have a reliable credit history.
If a home purchase is on your horizon, then beefing up your credit now can pay off big time. Even improving your credit score by a small amount could lead to a better home loan offer, potentially saving you thousands of dollars.
Here’s a credit card that can help you boost your credit score ahead of searching for a home loan.
Who It’s Best For: Future homeowners working to build a credit history.
How to Use: Petal 2 is a credit card offered by Petal. What Petal lacks in name recognition; it makes up for in features. The card offers a path to start building your credit history without any annual fees.
Importantly, you won’t have to make a security deposit with this card. Instead, you can keep building your savings for your home purchase.
Even without a security deposit, Petal will look beyond your credit score when evaluating your application. After a full evaluation of your savings, income, and spending, Petal will decide if it is able to issue a card. Depending on what they find, Petal may issue you a card with a credit limit ranging from $300 to $10,000.
Beyond the ability to build credit, you can earn up to 1.5% cash back on all purchases!
If you are starting a business, building credit is essential. The right credit score can help unlock financing that could take your business to the next level. But to get there, you’ll need to start by building your business credit with a card designed to do just that.
Here’s one option that offers business owners the chance to build credit from the ground up.
Wells Fargo Business Secured Credit Card
Who It’s Best For: Business owners looking to build credit.
How to Use: In terms of credit, a new business offers a blank slate, so you’ll need to start from the ground up. And one of the best moves you can make is to get a secured credit card for your business.
Wells Fargo offers a secured credit card with credit lines that range from $500 to $25,000. If approved, you’ll make your deposit to start spending. Each month, you can pay off your bill on time to start your business credit history on the right foot.
Plus, you’ll enjoy 1.5% cash back on your purchases.
Bankruptcy is a forceful financial event that can drastically change the course of your finances. After experiencing bankruptcy, you need to start rebuilding your credit. And one way to do that is by opening the right credit card.
Here are some options to help you move your credit forward after bankruptcy.
Who It’s Best For: Those looking to build credit after bankruptcy.
How to Use: Bankruptcy is undeniably a black mark on your credit history. But the only way to move forward is to reestablish your credit history with responsible credit management. You can start this process with this OpenSky credit card without having to answer any uncomfortable questions about your bankruptcy.
OpenSky doesn’t even run a credit check before issuing your card. Instead, you’ll have to provide a security deposit of at least $200. But you can make a deposit of up to $3,000 to boost your credit limit.
Once your application is approved and the card is delivered, start using the card to make small purchases each month. Always make on-time payments and be sure to keep up with any fees. Although there is an annual fee involved, it is relatively reasonable at $35 per year.
Who It’s Best For: Those looking to build credit after bankruptcy without an annual fee.
How to Use: The Citi Secured Mastercard provides an option for credit builders to work on their credit without an annual fee. You’ll have to make a security deposit of at least $200. But when used responsibly, the card can be a key component of responsible credit building.
If your application is approved, you will then make your security deposit to start using the card. From there, your activity will be reported to the three major credit bureaus. With on-time payments, you can significantly impact your credit for the better.
If you have great credit, you can absolutely capitalize on it as an opportunity to pad your budget through credit card rewards. There are many cards out there that provide worthwhile rewards to cardholders with excellent credit. With on-time payments, you can take advantage of these opportunities without dealing with any interest charges along the way.
You can even choose to treat your credit card choice like a side hustle. Depending on your credit, you can potentially unlock an exceptional deal.
Here’s my personal favorite rewards credit card that offers a boost to my budget in the form of travel miles.
Who It’s Best For: Those with great credit looking to maximize their rewards opportunities.
How to Use: The Capital One Venture Rewards Card offers an extensive selection of rewards for users with great credit. You’ll especially love this card if you enjoy traveling. I’ve used the Capital One Venture Rewards Card for several years. In that time, I’ve been able to turn my rewards into vacations near and far.
You’ll need good credit to get this card. But if you are approved for the card, you have the potential to earn 60,000 bonus miles if you spend $3,000 on purchases in the first 3 months. Plus, you’ll earn 2 miles with every dollar your spend.
Ultimately, this card is best for someone with great credit who wants to capitalize on it to earn travel perks. Depending on your spending, you could pay for some or all of your travels each year. You’ll have to decide if it is worth it to you. But this card has been worth it for me!
Building credit now can set you up better for the life events on your horizon. If building credit is your goal this year, don’t wait to open the right card for your situation.