Money Management

Best Starter Credit Cards for Building Credit

The Best First Credit Cards
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While credit cards have risks — namely, they make it easy to accumulate high-interest debt — establishing a credit history that shows responsible debt management is a key aspect of your financial health.

This article outlines the key factors that you should look for in a first credit card and lists some of the best options available today, broken down into the following categories:

Why Do You Need a Credit Card?

A credit history, especially a good one, can help set you up for financial success. Financial and business institutions rely on credit history to assess their risk for loans, leases, and sometimes even employment. 

For most people, credit cards are the primary way to begin building that credit history. That’s because responsible credit card use — i.e., keeping your balance low relative to your available credit, and making your monthly payments on time — gets reported to the credit bureaus and is reflected in your credit score. As a general rule, the longer you have a positive credit history, the better your credit score will be.

This can save you tens of thousands of dollars over your lifetime, because a good credit score means you’ll be offered lower rates on loans — such as car loans and mortgages.

On the other hand, interest, fees and late payments can have a negative impact on your financial health by lowering your credit score.

What Makes For a Good First Credit Card?

  1. Longevity. A good credit card is one you can keep (and use) for a long time. Lifetime account length is one of the factors that impacts your credit score. So when you’re choosing your first few cards, look for those with no (or low) annual fees. Some of the credit cards marketed to people with little or no credit history are easy to get but have annual fees of $100, $200 or more; try to avoid picking a card that costs so much you’ll want to close it after a year or two.
  2. Issuing bank. Opt for a major credit issuer like Chase or Discover. These companies provide cards even for those with limited credit history. Consider secured cards (which require a deposit) as a stepping stone to unsecured credit cards.
  3. Upgrade options. If you get a secured card in order to establish your credit, check if it can be transitioned into a non-secured one from the same issuer when your credit improves. Most issuers mention upgrade options on their application pages. 
  4. No frills. Higher-tier cards that come with loads of perks and rewards are typically reserved for those with high credit scores and not someone getting a credit card for the first time. They often come with annual fees, which are not ideal considering you want to keep this credit card open. Even though airline miles or reward points may be enticing, starting with a basic card is a good idea. More important benefits for a first-time card are no annual fee, fraud protection and a form of cash-back rewards. You can always tackle things like travel hacking later on in your credit journey.
  5. Credit score. Even without a credit card, one might still have a credit score. It’s important to check this before applying. Use tools like Credit Karma or Credit Sesame to check your score and understand the factors that impact your creditworthiness.
  6. Special groups. Students, active military members and veterans may have access to unique card options. Search the credit card issuer’s website to see what special offers may be available.

Best Overall First Credit Cards

If you don’t have any credit history or credit score, you will almost certainly be limited to a secured credit card. The good news is you can quickly get off of “secured” status — and get your deposit refunded — with responsible payments. 

Editor’s note: Due to linking restrictions from credit card companies, we can’t provide direct links to specific cards. Instead, you’ll find them on “best of” pages linked below. Our rankings may differ from those pages, but each card we discuss is featured there.

#1. Discover IT Secured Credit Card 

Type of card:Secured.
Annual feeNo annual fee.
Cash-back:2% on gas and restaurants, up to $1,000 each quarter. 1% on all other purchases. 2X cash-back match on your earnings in the first year. 
Additional notes:$200 minimum security deposit, $2,500 maximum. Automatic review for upgrade.

The Discover IT Secured credit card is a great place to start building credit if you have no credit score or history. 

This card requires a minimum security deposit of $200 or more (up to $2,500). Discover will then decide your maximum credit limit based on your security deposit amount and income.

After seven months, Discover will begin automatic monthly account reviews to see if you qualify to upgrade to an unsecured card. If you upgrade, you will get your deposit back. These reviews are based on responsible credit management across all of your credit cards and loans, not just your Discover card. 

How to apply: For a comprehensive list of the best secured credit cards, including the Discover IT Secured Credit Card, you can visit Cardratings.com’s Best Secured Credit Cards.

#2. Capital One Quicksilver Cash Rewards Secured Credit Card 

Type of card:Secured.
Annual feeNo annual fee.
Cash-back:1.5% cash-back on everything.
Additional notes:$200 minimum security deposit. Automatic review for upgrade.

Capital One Quicksilver makes it easy to open a secured credit card. Simply make the $200 minimum deposit and your account will open, with an initial credit line of $200. You can raise your credit line by depositing more before activating your card.

You are automatically considered for a higher credit line in as little as six months (with no additional deposit). 

One standout feature of Capital One’s secured cards is the potential for upgrading to their suite of no-annual-fee cards. 

While many users report that the most common upgrade is to the standard Quicksilver card, which doesn’t offer cash-back, it’s also possible to transition to one of the Venture Rewards cards (or eventually upgrade your Quicksilver unsecured card to a Venture Rewards card). Depending on which Venture Rewards card you get, you can earn 1.25% back in points or miles without paying an annual fee. 

How to apply: If you’re interested in applying for the Capital One Quicksilver Cash Rewards Secured Credit Card or exploring other options, you can visit Cardratings.com’s Best Secured Credit Cards for a comprehensive list and detailed reviews.

Best When You Have a Limited Credit History/Score

Even if you don’t have an unsecured credit card, it’s possible you do have a credit score. Many people have a credit score from being an authorized user on another person’s account, taking out student loans, or having an auto loan. If you have credit history, this may open up the ability to get an unsecured credit card. 

#1. Discover IT Cash Back

Type of card:Unsecured.
Annual feeNo annual fee.
Cash-back:5% in rotating categories each quarter. 1% on everything else. Cash-back match after the first year.
Additional notes:Offers a pre-approval tool (which does not require a hard credit pull). Rewards never expire.

The Discover IT Cash Back card has a solid rewards program, making it ideal to carry in your wallet long-term. Discover doesn’t list the exact credit score needed, but you’ll want to have at least a 600 score. 

The rewards for this card consist of 5% cash-back in various categories that rotate on a quarterly basis. These will be things like gas stations, groceries, restaurants, etc. You also get 1% cash-back on everything else you buy with your Discover card. 

Plus, they offer a great one-time, cash-back bonus on the first year of use. If you earn $150 cash back during the year, they will automatically give you another $150 at the end of your first year.

How to apply: If you’re interested in the Discover IT Cash Back card, or if you’re looking for other cash-back options, you can visit Cardratings.com’s Best Cash-Back Credit Cards for a comprehensive list and in-depth reviews.

#2. Chase Freedom Unlimited

Type of card:Unsecured.
Annual feeNo annual fee.
Cash-back:Varies depending on category.
Additional notes:Having a Chase bank account may increase your odds of approval.

The Chase Freedom Unlimited card includes many cash-back opportunities with a minimum of 1.5% on all purchases. This is an excellent credit card for long-term use, if you qualify. 

While not required, having a prior relationship with Chase bank may help increase your odds of approval. Chase states on their website, “If you have a checking account, you may be more likely to receive pre-qualified offers for credit cards.” 

This is also an ideal card for those who want to get into travel rewards down the line, as Chase has one of the best ecosystems for earning and redeeming travel rewards. 

How to apply: To learn more about this card and other cash-back options, you can visit Cardratings.com’s Best Cash-Back Credit Cards for a comprehensive list and detailed reviews.

Best First Credit Cards for Students

College student credit cards are often unsecured credit cards, so even without a credit history, you may qualify. 

#1. Discover Student Cash Back

Type of card:Unsecured.
Annual feeNo annual fee.
Cash-back:5% in rotating categories, 1% on all other purchases.
Additional notes:May be upgraded to a non-student card.

The Discover Student Cash Back card is a good all-around credit card for college students. There is no minimum credit score needed, but if you do have a credit score, that will be used in your credit evaluation. 

Students earn 5% cash-back in rotating categories each quarter, including places like Amazon.com, grocery stores, gas stations and restaurants. All other purchases are eligible for 1% cash-back. 

Eventually, the Discover Student Cash Back card can be upgraded to Discover IT Cash Back.

How to apply: For more information on this card and other options tailored for students, you can visit Cardratings.com’s Best Student Credit Cards for a comprehensive list and in-depth reviews.

#2. Chase Freedom Rise

Type of card:Unsecured.
Annual feeNo annual fee.
Cash-back:1.5% on all purchases.
Additional notes:A Chase checking account with $250 will increase your chances of being approved.

Chase has a better ecosystem of credit cards than most companies. If you eventually want to get into travel rewards, the Chase Freedom Rise credit card is a great place to start for students with no credit history.

When it comes to getting this card, Chase states that “having a Chase checking account with at least $250 will increase your chances of getting approved.”

The Chase Freedom Rise credit card offers 1.5% cash-back on all purchases. They may offer additional cash-back bonuses with promotional partners (ie. Lyft, Doordash, Instacart) throughout the year. 

Best Credit Builder Cards

These cards are ideal for people with bad credit, or those who want to quickly increase their credit scores. However, they don’t offer cash-back and more limited options to upgrade to secured cards, which may not be ideal in the long run. 

#1. Chime Credit Builder

Type of card:Secured.
Annual feeNo Annual Fee.
Cash-back:None.

To qualify for the Chime Credit Builder you must have a current Chime checking account and a monthly direct deposit of $200 or more. Unlike other secured credit cards, this card does not have a minimum deposit, making it highly accessible. 

While this card doesn’t offer points or cash-back, Chime does not report credit utilization to the three major credit bureaus. This allows you to use the full available amount, without worrying about negative effects on your credit. They do still report payment history and account status, so make sure you’re budgeting to pay back your debts. 

How to apply: While this card varies a bit from traditional secured cards, you can still find details on it and learn more by visiting Cardratings.com’s Best Secured Credit Cards for a comprehensive list and in-depth reviews.

#2. Cred.ai

Type of card:Secured.
Annual feeNo annual fee.
Cash-back:None.

This card — called the Unicorn Card — doesn’t require a hard credit pull or a direct deposit to get started. It doesn’t offer cash-back or points, but they do have some additional security features that may appeal, such as generating a temporary card number. This allows you to use your credit card without sharing your actual card information, keeping you protected if the merchant’s data becomes compromised. 

The big benefit of using the Unicorn Card is that by linking it to your Cred.ai deposit account, you agree to automatic payments for each purchase. If you sign up for this feature, you never pay interest or fees, and you keep your credit utilization very low.

How to apply: For a comprehensive analysis of the Unicorn Card, read our Cred.ai review. For additional details and to apply directly, you can visit Cred.ai.

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Summary and Final Thoughts

There’s a misconception that if you’re trying to get a card without any credit history, risky options like buying tradelines or high-annual fee-secured cards are your only options.

While it is possible to go through life without a credit card, having a healthy history of good credit can prove you can manage your obligations well. It can also open financial doors, saving you time and money in the long run. 

Plenty of good long-term options exist to help you build your credit. Comment below if you have any questions about what’s right for you.

Holly Humbert
Holly Humbert is a Utah-based freelance author and social media strategist who writes about entrepreneurship, women in business and financial education. Connect with her on Linkedin and Instagram.

    2 Comments

    1. Nice coverage, Holly!
      Isn’t the cred.ai card unsecured?

      I just finished a 50+ hour study on credit builder cards and hesitated to call cred.ai secured.

      Ended up calling it unsecured because the cardholder experience is much closer to “normal” cards than the lockup period on secured cards.

      Anyway agree with you including it. Great option for people to build credit!

      1. Hey Noah.

        Good observation. While not a traditional secured card, with Cred.ai you can only spend with what’s in your checking account. So, in the middle, but more so leans towards secured.

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