A good credit score is important for many reasons. It can help you get approved for loans, qualify for lower interest rates, and even get a job. If you don’t have a good score, don’t worry. There are many things you can do to improve your rating.
One of the best things you can do is to look at the credit card for good credit instant approval and for building credit and use them responsibly. But with so many options out there, it can be hard to know which one is right for you. Specifically, cards can help you build financial standing by reporting your repayments to the financial reporting bureaus. This article will give you an overview of the best credit cards to build credit in 2024.
Credit Cards to Build Credit: Best Offers
Credit is important. A good score can help you get a loan, a mortgage, or a job. A bad score can make it difficult to get approved for anything. If you’re looking to build your report, you’re in luck. Several cards are designed for people with bad or no credit.
If you’re trying to build financial credibility, you might wonder if using a card is the best way to do it. The answer is that it depends. Using one can help you build financial stability, but only if you use it responsibly. That means paying your bills on time and keeping your balance low.
In the future, you’ll be able to get better interest rates and get approved for loans if you build a good borrowing history. The following will give you an overview of some of the best credit cards to build credit found on the market today.
Petal® 1 “No Annual Fee” Visa® Credit Card
The Petal® 1 “No Annual Fee” Visa® Card is a top option for those who are looking for best credit cards for fair credit 2024 and to build or rebuild their financial situation. It has no annual fee and offers 2%- 10% cash back at select merchants. Additionally, customers can increase their borrowing limit in as little as six months. There is also no foreign transaction fee, so it’s a great option for those who travel abroad.
The Petal® 1 “No Annual Fee” Visa® Card also offers cash back rewards. You’ll earn 1% cash back on all purchases, and you can earn up to 10% cash back when you shop through the Petal Marketplace.
- Annual Fee: $0
- Interest Rates: 22.24%-31.74% variable APR
- Credit Score: Bad/fair
- Pros: Reports to the three major reporting bureaus, no annual fee or deposit, no foreign transaction fees
- Cons: No balance transfer option available, no intro APR offer
Discover it® Secured Credit Card
A secured credit card is a type of card that requires a deposit, which is used as collateral for the loan limit. The deposit is usually a percentage of the limit, and it’s held in a savings account. The Discover it® Secured Card is a good option for people who are looking to build or restore their financial history.
Anyone looking for credit cards for building credit won’t go wrong with this one. It offers 0.99% intro APR on balance transfers for 6 months. With no annual fee, you can earn cash back on your purchases. Plus, you can get your deposit back after 12 months if you manage your account responsibly.
- Annual Fee: $0
- Interest Rates: 25.24% variable APR
- Credit Score: Bad/fair
- Pros: Reports to the three major reporting bureaus, earns rewards, new customer bonus offer
- Cons: High APR, requires a minimum deposit (amount varies)
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Card is a top option for people with bad financial backgrounds, with almost instant approval. The card has a $0 annual fee and a $49 minimum security deposit for a $200 line of credit. When you close your account or use your card responsibly, such as making payments on time, the deposit amount is refundable.
Capital One also offers a grace period of 25 days and a 0% APR on purchases for the first 6 months. This is an excellent option for people who are restoring or building their financial history because it has no annual fee and flexible security deposit requirements.
- Annual Fee: $0
- Interest Rates: 26.99% variable APR
- Credit Score: Bad/fair
- Pros: Reports to the three major reporting bureaus, no annual fee, 0% balance transfer
- Cons: Requires a minimum deposit ($49 minimum), no foreign transaction fees
Discover it® Student chrome
The Discover it® Student chrome is a great cash back card for students who want to earn cash back on their everyday purchases. With no annual fee and a 0% APR for the first six months, this card is a great option for students who are looking to build their borrowing power.
On up to $1,000 in combined purchases each quarter, the Discover it® Student chrome card offers 2% cash back at food outlets and gas stations. As an added bonus, all other purchases will earn you 1% cash back. The Discover it® Student chrome is a great option, especially if you spend a lot on gas and at restaurants, but there are other cards that offer much better rewards.
- Annual Fee: $0
- Interest Rates: 15.24%-24.24% variable APR
- Credit Score: Fair/average
- Pros: No annual fee, rewards system, no foreign transaction fee
- Cons: Reward earnings are capped at $1,000 in purchases per quarter, balance transfer fee (3%)
Deserve® EDU Mastercard for Students
The Deserve® EDU Mastercard for Students is a card designed for students who want to build their financial history and earn cash back on their everyday purchases. The card offers 1% cash back (but no more than that) on all purchases, entertainment, and dining. The offer includes cell phone protection for up to $600, as well as an unlimited refer-a-friend program in which you and your referral will receive $30.
There’s no annual fee, and cardholders can get a free year of Amazon Prime Student. If you’re a college student looking for a card, the Deserve EDU Mastercard for Students is a great option.
- Annual Fee: $0
- Interest Rates: 20.99% variable APR
- Credit Score: None
- Pros: No annual fee or deposit, no foreign transaction fee, international students can apply
- Cons: Low rewards, only 1% cash back
Bank of America® Cash Rewards for Students
The Bank of America® Cash Rewards card for students is a great option for students who want to earn cash back on their everyday spending. The card offers 3% cash back in the following categories: travel, shopping online, restaurants, gas, home furnishings, or drug stores.
In the first 15 billing cycles, there is no annual fee and an introductory APR of 0% on purchases. The amount of cash back you can earn is unlimited, and you can redeem your cash back for statement rebates, gift cards, or merchandise. The card also offers a number of other benefits, including access to Bank of America® Preferred Rewards, which can help you save on interest, fees, and more.
- Annual Fee: $0
- Interest Rates: 16.24% – 26.24% variable APR
- Credit Score: None
- Pros: No annual fee or deposit, high rewards rate, free financial report
- Cons: Foreign transaction fees, spending caps on rewards, balance transfer fee
Citi® Double Cash Card
The Citi® Double Cash Card is a top choice for anyone who wants to earn cash back while building their financial situation. With this card, you’ll earn 2% cash back on all your purchases – 1% when you buy and 1% when you pay your bill. There’s no limit to the amount of cash back you can earn, and you can redeem rewards for statement rebates, gift cards, or merchandise.
You’ll also get a 0% intro APR on balance transfers for the first 18 months, so it’s a great but simple cash back card with no annual fee. You can use it for everyday purchases or in conjunction with bonus category cards.
- Annual Fee: $0
- Interest Rates: 16.24%-26.24% variable APR
- Credit Score: Good
- Pros: No annual fee, no limit on cash back rewards
- Cons: good score needed, foreign transaction fee, balance transfer fee
Read More: How Many Credit Cards Should I Have?
What is Bad Credit?
Credit score is a measure of how reliable a person is with their finances. The report reflects your financial history, such as missed, late payments, or bankruptcy filings. Understanding bad ratings and how they can affect your financial future is important.
Without the proper knowledge, improving your financial standing will be difficult. In addition to higher interest rates, bad credit can also increase insurance premiums. Also, it determines whether you are likely to default on a loan or make late payments. An unfavorable rating makes you a high-risk borrower, and you’ll likely have trouble getting a loan or another type of financing.
How to Build Credit With a Credit Card: 5 Ways
Is there anything you’d like to accomplish financially? Getting your credit back on track, for example. There are several ways to achieve both goals by using a card responsibly. Your report will not be built or rebuilt by simply using your card for purchases. Instead of focusing on building or rebuilding your score right away, you can work on improving your rating by using your debit card responsibly over time.
As well as getting a better financial score, you could qualify for a mortgage and even get a job. Below are listed some tips that will assist you in building credibility as a cardholder.
Pay On Time, Every Time
Making payments on time is one of the most important steps you can take to boost your credit. Payment history is the biggest factor in your financial report, so it’s essential to ensure you always pay your bills on time. If you have trouble remembering to pay your bills on time, you can do a few things to make it easier.
In order to avoid forgetting to pay your bill every month, you can choose to set up automatic payments so that you do not have to do that. As an alternative, you can also set up a reminder to ensure that you do not forget to pay your bill.
Whenever you are having trouble making your payments on time, you should speak with your lenders and explain your situation. This will avoid any potential defaulted payments on your account.
Keep Your Utilization Low
Credit utilization is one of the most important factors in your report. It is the percentage of a loan limit that you use. For example, if your limit is $1,000, and you have a balance of $500, your utilization is 50%. The lower your utilization, the better.
That’s because it shows lenders that you’re a responsible borrower who doesn’t max out your credit cards. A low utilization rate also means you have more available funds, which can be helpful in an emergency. There are a few things you can do to lower your utilization. You can ask for a higher limit, pay down your balances, and spread your card debt across multiple cards.
Read More: How To Use A Credit Card – The Smart Ways
Limit New Credit Applications
Applying for credit can be a great way to get the financial products and services you need. But did you know that every time you apply for a loan, it can have a negative impact on your score? That’s because each time you apply for money, the lender will make a hard inquiry on your report. This can lower your score, and it can also make you look like a higher-risk borrower.
Limiting your applications for financing is one of the best ways to build your report. Furthermore, if you’re rejected for a line of credit, it can damage your score even further. To build your score, it’s best to limit any new applications to those you’re confident you’ll be approved for.
Use Your Card Regularly
If you want to establish credit, you need to use your card regularly. This may seem like common sense, but many people don’t realize that you need to use your card to build financial credibility. Just having a card and not using it won’t help your report.
Instead, you need to use your card. To do this, you need to charge something to your card every month and pay your balance off in full and on time. If you do this, you will be able to build up a good payment history, which is one of the most important factors in determining your score. But, don’t just charge anything to your card. You must be strategic about what you buy and make sure you can afford to pay off your balance.
Increase Your Credit Limit
One of the best ways to build financial credibility is to use a credit card responsibly. But if you have a low limit, it can be difficult to use your card without maxing it out. And if you max out your card, you’ll damage your score. So, what can you do if you have a low borrowing limit? One option is to ask your issuer for a credit limit increase.
A credit limit is the maximum amount of money you can borrow from a lender. Understanding your limit is essential because it can affect your score. You can also improve your score by increasing your limit. That’s because a higher limit can help you keep your utilization ratio low.
Your utilization ratio measures how much money you’re using compared to the amount you have in your account. Aiming to keep your utilization ratio below 30% is a good idea. Therefore, with a $1,000 limit, make sure your balance is below $300.
Sources Used in Research for the Article:
- Platinum Secured Credit Card from Capital One, Capital One, https://www.capitalone.com/credit-cards/platinum-secured/
- Build your credit history while earning rewards, Discover, https://www.discover.com/credit-cards/secured/
- Credit Scores, Federal Trade Commission, https://consumer.ftc.gov/articles/credit-scores