Credit cards can be great tools for building a robust credit profile. A more robust credit score improves your chance to acquire a new card and directly affects the rates you will be provided on other financial products like house loans and mortgages. Keeping this in mind, you need to look for the credit cards that will build your credit score. You will learn about the best credit card to build credit and other facets.
Once you are ready to apply for your initial credit card, you can find it challenging to know which credit card to select. The best initial credit card you will pick will depend on various factors. They include whether you are beginning your credit score journey, you have some credit history already, and other traits like your readiness to pay an annual fee and your employment position.
Your goal line should be the same regardless of which group you’re in. The primary thing is to find the best first credit card for your distinctive needs and financial position that will aid you in establishing good credit card habits from the beginning. This article has come up with a list of credit cards that provide the best blend of features to meet the wants of anyone looking for their first credit card, whether you have no credit or have some reputable credit.
How to choose the best credit card to build credit
Before applying for any credit card, you need to check some factors. They include the following;
i) Interest rates
It would be best if you go for a low-interest credit card. A low-interest credit card has a lower-than-average APR. Moreover, it is best if you anticipate carrying a balance every time.
ii) APR percentage
You should choose a 0% APR credit card. The card has an introductory 0% APR offer on balance transfers, purchases, or both. In addition, the card is best for anyone with some standing debt considering to pay it down or has to make a considerable purchase and wants a lengthy chance to pay it off.
When looking for a credit card to choose, go for a rewards card. These cards earn rewards in points, miles, or cashback based on spending percentage. It is worth noting that rates vary from card to card, and every card will always have its special rates of earning. Rewards credit cards typically require the best credit score.
How to apply for a credit card
Choosing the best credit card to build your credit may not be easy. However, applying for the credit card you have selected is straightforward. Most credit cards can be applied online. Alternatively, you can visit the issuing bank and apply in person or contact them over the phone.
You will need the following personal information to proceed with the card application:
- You legal name
- Your Social Security or ITIN number is used to perform the solid credit pull and is essential in determining whether you will be approved. However, credit cards for building credit will not perform a credit check.
- A valid US address
- Your Income level to help the card issuer determine how much of a credit line you can meet the expense of.
After providing all the necessary information, the card issuer will make a solid inquiry into your score. If you have a bad score, you will need to get unsecured credit card cards for bad credits or a secured credit card for rebuilding credit.
What are secured and unsecured credit cards?
As mentioned earlier, after a card issuer has reviewed your credit score, you can qualify for either a secured or unsecured credit card. Well, you may ask, what is the difference between secured and unsecured credit cards? Here are the differences between the two types of cards;
- Secured credit cards need you to deposit some money into your account, while unsecured cards need scores only.
- You can apply for a secured card without any credit history, while a secured one needs a good borrowing history.
- Card issuers do not make solid inquiries when applying for a secured credit card, but they make hard inquiries for the unsecured one.
- For unsecured credit cards, scores dictate your borrowing limit while deposits does for secured cards.
Despite the above dissimilarities, both cards have the following in common;
- The cards allow you to grow your credit scores when making timely payments with any financial company. Your credit card issuer reports to credit bureaus which keep your transaction records.
- You must pay interest whether you are using a secured or unsecured credit card.
What is the best credit card to build your credit in 2022?
The article has analyzed some best credit cards for building or rebuilding your credit. You need not have a borrowing history since you can get approved for a credit card with no credit scores if you opt for unsecured ones. They include the following;
i) Petal® 2 “Cash Back, No Fees” Visa® Credit Card
This is a distinctive card issued by WebBank, a Member FDIC. The credit card takes a different methodology to the credit card application process. Instead of determining your credit score based only on credit history, they may request you to link bank accounts when applying.
At that point, the issuer uses Petal’s technology to examine your bank statements and other essential data like bill payments to ascertain your eligibility. This is useful for applicants who may have zero credit history. But, if you have some credit history, it does not influence the credit decision.
ii) Discover it® Secured Credit Card
The card gives you access to many perks and benefits available to people with good credit scores. What makes this credit card best is the straightforwardness to transition to an unsecured credit card. Beginning at seven months from the account opening date, Discover will automatically evaluate your card account to determine if you can transit to an unsecured line of credit score and have your deposit back.
This takes the guesswork out of questioning when you can transit to an unsecured credit card. We recommend this credit card for anyone who needs to rebuild their credit.
iii) Deserve® EDU MasterCard for Students
This credit card can be a good first credit card alternative for some credit beginners. Deserve EDU MasterCard is designed for American college students and international students with zero credit scores or who need to build up a profile. Moreover, the card issuer uses other data like scholarships, grants, and banking history to determine creditworthiness. It is worth noting that every purchase earns 1% cashback and zero annual fees.
iv) Deserve Digital First Card™
This card is best for international applicants. The Deserve Digital First Card™ is suitable for everyone with zero or limited credit history who can’t pay a security deposit. There are zero annual and foreign transaction fees. In addition, if you are approved for the credit card, you get prompt access and can add it to Apple Pay. Deserve Cardholders also get up to 1.5% cashback, based on the number of dollars you spend each billing period. They can redeem cash back as a statement credit to equalize their bill.
v) Discover it® Student Cash Back
Financial specialists often advise on the significance of building credit at an early age. Getting a credit card while a college student is one of the straightforward ways to establish credit. This credit card is our best pick for students who need to build good credit while in school. You must be over 18 years and a US citizen to apply for the card.
Note that the card offers a generous cash-back program. Once you activate the card, you can earn a 5% cashback on revolving categories up to a $1,500 maximum each quarter. Every other purchase gets unlimited 1% cashback inevitably.
vi) Chase Freedom Flex℠
The Chase Freedom Flex has the power to handle just about all of your credit card spending wants without an over-inflated price range. The card has zero annual fees. However, it comes with a pumped-up earnings configuration covering a broad band of expenses like travel, drugstores, and dining. In addition, rotating quarterly bonus groupings in areas most households are likely to discover appealing.
Credit cards allow cardholders to borrow money from financial institutions. Thus, we have unsecured and secured credit cards. You can use your credit card for daily transactions like purchases. The article has mainly focused on credit cards that feature high chances for building full credit by reporting to the major credit bureaus.
Some credit cards are suitable for customers with reasonable to average credit, whereas others are for poor or no credit history. Advantage points are given to credit cards with zero annual fees for cards that get rewards on expenditure.