What are the Best Credit Cards to Build Credit?

By: Eliana Sagarin

Whether you’re building credit from the ground up or repairing your credit after a few mistakes, the right credit card can put you on the path of a credit-worthy future!

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Fair is Fair

Unless you’re one of the rare few that has a picture-perfect credit score of 800-850, you have important choices to make when considering your credit options. Many consumers have “fair credit” at around 580-669, which isn’t bad, but certainly isn’t ideal.

When looking to acquire a new card, you should keep your eyes on the prize: perks and a higher credit score. This won’t happen overnight with fair credit, but it’s good to have goals.

A simple credit card without annual fees is great for building credit. If you’re willing to pay an annual fee, you’re more likely to get a card with purchase rewards like airline miles, dining rewards and cash back. Spend some time crunching numbers to decide if the annual fees are worth the perks. If you continue to build up your credit, a world of credit card rewards will open up to you in the not so distant future. Patience is a virtue.

Bad to the Bone

If you have a credit score of below 600, you have what is considered “bad credit”. Because credit card companies don’t want to take the risk, it might be hard for you to get approved for an unsecured credit card – but it’s not impossible.

Credit cards offered by specific retailers tend to be more lenient with their approval processes. Making small purchases using a store credit card and paying off the full amount each month is an easy way to build credit. Think carefully about which store makes the most sense for your lifestyle. If you end up making unnecessary purchases for the sake of building credit, it’s not worth it.

Subprime credit cards are specifically designed for those with low or poor credit. They usually come with lower credit limits and higher interest rates. Like a store credit card, if you’re willing to keep your spending low and pay off your debt at the end of each month, you’re golden.

Secure your Future

Secured credit cards are the easiest type of credit cards to obtain. That’s because cardholders put up a cash deposit that acts as collateral on the account. While policies may vary, if you put $200 down on a secured credit card, for example, that’s $200 you can spend on credit every month—and build up your credit score in the process.

Card issuers are much more flexible with secured credit cards, because they don’t have to put their own money on the line. Think of a secured credit card as a debit card with flexibility. Over time, you might be able to convert your secured credit card into an unsecured credit card after a set number of on-time payments. Should you decide to close your account, your deposit is fully refundable if you have a $0 balance.

University of CC

College students often find themselves in a strange in-between place on their way to financial independence. Credit card companies are sympathetic to college students and have card offerings specifically for students looking to build credit with a starter credit card. Student cards tend to come with lower fees and better perks than credit card offerings for those with subprime or poor credit.

Some of the perks offered include cash back on good grades (getting an A has never felt so good) as well as discounts on streaming services (treat yourself to a series binge of Russian Doll after all that hard work) and cash back on all purchases. In the process you’ll build up your credit score and have an extra incentive for getting that perfect 4.0. You see? It really does pay to stay in school.