Best Credit Cards for Establishing Credit in 2024

Establishing an excellent credit score is crucial for building a promising financial foundation. From young adults who have just started their financial journey to someone looking to rebuild their credit score, the right credit card can make all the difference.

In 2024, the market is brimming with credit builder card options designed to cater to those with limited or no credit history. These cards provide a platform to showcase responsible credit use and offer a range of benefits such as cashback, rewards, and low interest rates. 

Navigating through good credit cards for beginners can turn into a daunting task. However, awareness of the offerings and card details can simplify the process.  Let us discuss the list of credit cards that are useful for credit building.

Furthermore, we will highlight the features, benefits, and ways to build a robust credit history. Whether you’re aiming to secure your first credit card or enhance your credit score, these recommendations will guide you toward making an informed decision.

Key Takeaways

• Understanding credit building; involves demonstrating responsible financial behavior to improve creditworthiness, which is crucial for obtaining loans and favorable interest rates.
• Selecting the right card involves checking your credit status, deciding between secured, student, or credit-builder cards, comparing fees and interest rates, evaluating credit limit requirements, and more.
• The best credit cards for building credit include secured cards, student cards, and credit-builder cards. Secured cards require a deposit but are accessible with no credit history.
• Emphasis on responsible credit use includes making on-time payments, keeping credit balances low, and avoiding excessive debt, which are essential for improving credit scores over time.

What does ‘building credit’ mean?

It is the process of building and improving one’s creditworthiness. The fair representation of creditworthiness is popularly known as credit score. It is the numerical assessment value to evaluate the risk of lending money or extending credit to an individual.

Building an excellent credit score is crucial for any individual who wishes to obtain loans, secure favorable interest rates, or want to occupy specific jobs. 

Building credit involves demonstrating responsible financial behavior, for those new to credit or looking to repair their credit history. It includes responsible financial activities, such as timely payment of bills, maintaining low balances on credit cards, and avoiding excessive debt. Furthermore, promising credit-building strategies include using credit cards wisely, taking out small loans, and ensuring all payments are made on time. 

What’s the best credit card for building credit?

The best credit card type for building credit is typically the one that is secured. The best credit cards for starting credit require a cash deposit as collateral, which is generally your credit limit.

This way, these cards are accessible to individuals with no credit history or poor credit scores, as the risk to the issuer gets minimized. If you keep using a secured credit card responsibly, making timely payments and keeping balances low, your credit score improves significantly. 

Another excellent option is a student credit card. These card options are specifically designed for college students, who are new to credit. These are good starter credit cards which often come with lower credit limits and fewer fees.

Moreover, some cards even offer rewards programs tailored to student spending habits. If you already have some credit history and wish to improve it, a credit builder card can be a good option.

These are the unsecured cards aimed at individuals with fair credit and typically come with higher interest rates and lower credit limits. However, they report to all three major credit bureaus, which is crucial for credit building.

Ultimately, the best credit cards to build credit depend on your specific situation, but secured cards, student cards, and credit-builder cards are generally the top choices.

How to select the best credit card for building credit?

Choosing the best credit cards for starting credit out of all the available options is challenging. Here’s a pointwise guide on how to select the best credit card for building credit. 

• Check your current credit status and determine your credit score to check which cards you qualify for. 
• Identify your requirements and decide between secured student or credit builder cards. 
• Compare fees and interest rates; look for cards with low or no annual fees and competitive interest rates.
• Evaluate credit limit and deposit requirements, ensuring you can afford the required deposit.
• Dig deeper to learn about the additional features. Check for benefits like rewards, cash back, credit score tracking, and financial education resources.

The idea is to choose a card that offers the potential to graduate to an unsecured card in the future.

Best Credit Cards to Build Credit in 2024

To help you make a fair decision, we have listed the best credit cards for establishing credit. Learn all the details and decide which card would be most favorable for you. 

Discover it® Secured Credit Card

This card offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Additionally, earn 1% cash back on all other purchases, with no limit on how much you can earn. Moreover, it reports to all three major credit bureaus and provides 24×7 customer support. 

Ideal For

Discover it Secured Credit Card is a credit builder card and it is an excellent option for those looking to build or rebuild their credit with no annual fee or additional fees involved. 

Pros

• The card has no annual fee, making it an affordable option for those looking to build credit.
• You can access your FICO® Credit Score for free, allowing you to monitor your credit progress.
• The deposit, which ranges from $200 to $2,500, is refundable when you close the account or upgrade to an unsecured card.

Cons

• The card requires a cash deposit, which might be a barrier for some individuals.
• The card has a relatively high variable APR, which can be costly if you carry a balance.

Citi® Secured Mastercard®

This card requires a refundable security deposit, which determines your credit limit. With no annual fee, this card is an affordable option for people who have just begun their credit journey. It reports to all three major credit bureaus, helping you establish a positive credit history. The card also provides access to your FICO® Score online, allowing you to monitor your credit progress.  

Ideal for

Among all the credit cards for establishing credit, the Citi Secured Mastercard is ideal for responsible credit management. The Citi® Secured Mastercard® offers a straightforward path to improving your financial standing. 

Pros 

• There is no annual fee or expense related to maintenance, making it an affordable option.
• It reports to all major credit bureaus, helping rebuild your credit. 
• It offers a flexible credit limit, allowing you to choose a credit limit that suits you. 

Cons

• The card requires an upfront deposit amount, which might become a barrier for a few users.
• It does not offer cashback or rewards, unlike some other secured cards. 
• There is no introductory 0% APR on purchases or balance transfers.

OpenSky® Secured Visa® Credit Card

The card also offers online tools and resources to help you manage your account and track your credit-building progress. It requires a refundable security deposit ranging from $200 to $3,000, which determines your credit limit. The security deposit helps minimize risk for the issuer, making approval easier for applicants.  

Ideal For

OpenSky Secured Visa Credit Card is a practical choice for those seeking to build credit without the hurdle of a credit check, offering essential features and the opportunity to improve creditworthiness through responsible use.

Pros

• The card has a relatively low annual fee of $35.
• No credit card check is required; approval is accessible even for those with poor or no credit history.
• It offers a flexible security deposit, between $200 and $3,000, which determines your credit limit.

Cons

• There is no option to graduate to an unsecured card. So, you may need to apply for a different card as your credit improves.
• The card has a relatively high variable APR, which can be costly if you carry a balance.

Petal® 1 “No Annual Fee” Visa® Credit Card

It lets the cardholders earn cash-back rewards ranging from 2% to 10% at select merchants. Moreover, it offers a unique approval process that considers your banking history alongside traditional credit scores, making it accessible to more people. Furthermore, it offers tools for managing finances, including a mobile app for tracking spending and monitoring credit score progress.

Ideal For

Petal 1 No Annual Fee Visa® Credit Card is ideal for individuals with limited or no credit history. 

Pros

• There is no cost to maintain the card, making it budget-friendly.
• Eligible for credit limit increases over time with responsible use.
• Offers mobile banking tools, including a mobile app for tracking spending and managing finances.

Cons

• Does not offer a 0% APR introductory period on purchases or balance transfers.
• Approval and credit limits are based on creditworthiness, which may limit access for those with poor credit. 

Capital One QuicksilverOne Cash Rewards Credit Card

It features a straightforward rewards program with unlimited 1.5% cash back on every purchase. This makes it a reliable choice for everyday spending without the hassle of rotating categories or earning caps. It also has an annual fee of $39, which is relatively low compared to other rewards cards. Additionally, the Capital One QuicksilverOne card includes travel accident insurance and 24/7 roadside assistance, adding value beyond cash-back rewards.

Ideal For

Capital One QuicksilverOne Cash Rewards Credit Card is ideal for those looking to build credit while earning consistent cash back on all purchases, with benefits that cater to frequent travelers and everyday spenders alike.

Pros

• Eligible for credit line increases after making your first five monthly payments on time.
• Rewards are straightforward with no categories to track or activate.
• Eligible for credit line increases after making your first five monthly payments on time.

Cons

• The card has an annual fee of $39, which may not appeal to those looking for a no-fee card.
• While unlimited, the 1.5% cash-back rate may be lower than other cards with higher rewards in specific categories.

Bank of America® Customized Cash Rewards Secured Credit Card

It is one of the best credit cards for beginners that require a refundable security deposit. This card determines your credit limit, starting from $300. It stands out with its customizable cash back rewards program, allowing you to earn 3% cash back in a category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings). Additionally, you get 2% cash back at grocery stores and wholesale clubs. 

Ideal For

Bank of America Customized Cash Rewards Secured Credit Card is perfect for individuals looking to establish or rebuild their credit history as it reports to all three major credit bureaus. Moreover, people who prefer a card with no annual fee, provide affordability while they work on improving their credit.

Pros

• The card does not charge an annual fee, making it cost-effective for building credit.
• Reports to all three major credit bureaus (Experian, Equifax, TransUnion), helping to establish or improve your credit history.
• Bank of America® may periodically review your account for possible transition to an unsecured card based on your creditworthiness.

Cons

• Requires an upfront security deposit, which may be a barrier for some individuals.
• Does not offer a 0% APR introductory period on purchases or balance transfers, which may be a drawback for those looking to save on interest initially.

Chime Credit Builder Visa® Credit Card

For this card, you require a Chime Spending Account but do not require a credit score or minimum credit history for approval. This makes it accessible to those who may have difficulty qualifying for other credit cards. The card does not charge any annual fees or interest, as it operates as a secured card linked to your Chime Spending Account balance. 

Ideal For

It’s perfect for individuals looking to establish or improve their credit history, especially if they have limited or no credit history. Moreover, people who prefer a card with no annual fees or interest charges can also opt for it.

Pros

• It operates as a secured card linked to your Chime Spending Account balance, with no additional costs.
• This card provides convenient management of your finances, including budgeting tools and transaction tracking.

Cons

• You need to have a Chime Spending Account to qualify for the card, which may not be ideal for those who prefer traditional banking.

Self-Credit Builder Account + Secured Visa® Credit Card

It is a unique combination designed to help individuals build or rebuild their credit. It consists of two parts: a Credit Builder Account and a Secured Visa® Credit Card. Together, these tools offer a comprehensive approach to credit building. They do not require a credit check for approval, making them accessible to those with limited credit history or poor credit.

Ideal For

It is one of the best credit cards for starting credit ideal for anyone looking to establish or improve their creditworthiness through responsible financial management.

Pros

• Offers a dual approach with a Credit Builder Account and a Secured Visa® Credit Card, designed to help you build or rebuild credit.
• Approval does not require a credit check, making it accessible to those with limited or poor credit history.

Cons

• The Secured Visa® Credit Card may have a higher APR compared to unsecured credit cards, potentially increasing costs if you carry a balance.
• Your spending limit with the Secured Visa® Credit Card is typically equal to the amount of your security deposit, which may restrict your purchasing ability.

Deserve® EDU Mastercard for Students

The card is for students, offering a range of benefits to support their financial journey. You wouldn’t need a credit history or a Social Security number. Thus, this card is accessible to international students and those new to credit. The card provides 1% unlimited cash back on all purchases, helping students earn rewards on everyday expenses. There are no annual fees or foreign transaction fees, making it a cost-effective choice for students studying abroad or traveling. 

Ideal For

The card is designed to meet the needs of students, including those without a credit history or Social Security number.

Pros

• Offer 1% unlimited cash back on all purchases, allowing students to earn rewards on everyday spending.
• There is no annual fee associated with the card, making it cost-effective for students.

Cons

• Initial credit limit may be lower, depending on individual creditworthiness and financial history.
• Requires meeting spending requirements to qualify for the complimentary year of Amazon Prime Student membership.

This is the list of recommended credit cards for beginners, out of which you can choose the ones that match your requirements and build an excellent credit history. 

Conclusion

In conclusion, choosing the best credit cards for beginners for establishing credit in 2024 requires careful consideration of your financial goals and current credit standing. There are tailor-made solutions for everyone, students who have just started their financial journey or individuals who plan to rebuild their creditworthiness.

Popular credit builder card options, like the Discover it® Secured Credit Card and Citi® Secured Mastercard®, offer a structured approach with benefits like cash back rewards and reporting to credit bureaus, ideal for building credit responsibly. You can pave the way towards a stronger financial future and improve creditworthiness by choosing wisely and using your card responsibly.

FAQs

1. How do I build my credit?

You can build your credit by making on-time payments on credit accounts, and keeping your credit utilization low, demonstrating responsible financial management to lenders.

2. How long does it take to build credit with a new credit card?

Building credit with a new credit card can vary based on individual financial behaviors and credit history. You may start seeing positive impacts within a few months of responsible use. However, it generally takes about six months to a year to establish a noticeable improvement in your credit profile.

3. Are there any credit cards with no annual fee for those establishing credit?

Yes, there are several credit cards with no annual fee designed specifically for those establishing or rebuilding credit. Some popular options are the Discover it® Secured Credit Card, Capital One Platinum Credit Card, and Petal® 1 “No Annual Fee” Visa® Credit Card. 

4. Do credit cards for establishing credit offer rewards?

Yes, some credit cards designed for establishing credit, such as secured and student cards, offer rewards like cash back or points on purchases. These rewards can incentivize responsible spending habits while building or rebuilding credit.