Secured Credit Cards: Best Option for New Credit Card Users with Limited Credit History
Starting with no credit history can be a bit of a challenge, but there are still options available to you. For beginners looking to start building their credit, a secured credit card is a great choice. Specifically, cards like the Discover it Secured Credit Card and the Citi Double Cash Card offer both a reliable way to build credit and the opportunity to earn rewards.
Discover it Secured Credit Card
The Discover it Secured Credit Card is an excellent choice for those just beginning to establish their credit. This card requires a security deposit which acts as your credit limit, making it easier to get approved even with no credit history. One of its standout features is its cash back reward program, offering 1% cash back on all purchases and an additional 1% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter. Moreover, after eight months, Discover reviews your account and you have the potential to receive your security deposit back, should you qualify for an unsecured card.
Citi Double Cash Card
Another solid option is the Citi Double Cash Card, which comes with no annual fee and offers 2% cash back on all purchases. The card pays cash back on purchases, and then again when you pay off those purchases. This makes it a highly efficient way to earn cash back without the hidden fees often associated with other rewards cards. Both cards are designed to help you build credit while offering the opportunity to earn valuable rewards.
Additional Options for New Credit Card Users
Starting with no credit history can be difficult, but there are still several credit cards that are often recommended for beginners with little to no credit history:
1. Secured Credit Cards
These cards require a security deposit, usually equal to the credit limit. They're designed for people with little to no credit history and can help you build credit. Some popular secured cards include the Discover it Secured Credit Card and the Capital One Secured Mastercard.
2. Student Credit Cards
If you're a student, you may qualify for a student credit card. These cards often have lower credit requirements and come with perks like cash back on purchases relevant to students, such as groceries and textbooks. Examples include the Discover it Student Cash Back and the Journey Student Rewards from Capital One.
3. Starter Credit Cards
Some credit cards are designed specifically for individuals with limited or no credit history. These cards may have lower credit limits and fewer perks, but they can be a good starting point. Examples include the Petal 1 "No Annual Fee" Visa Credit Card and the Capital One Platinum Credit Card.
Choosing the Right Card
When choosing a card, look for one with no annual fee if possible. This will help you minimize costs while you're building credit. Additionally, make sure to use your credit card responsibly by paying your bill on time and in full each month to avoid interest charges and build a positive credit history. Over time, as you build your credit, you'll become eligible for cards with better perks and rewards.