Having a credit card opens the door to more financial freedom and credit building opportunities. However, the best part is it helps you establish a solid credit history. With proper use and discipline, such as prompt payments, lenders will be more willing to entrust you with higher credit limits and even competitive rates as well as other loan packages.
What is the Best Credit Card to Start With?
Shopping for your first credit card can be frustrating, especially when you don’t have an established credit history yet – this usually applies to students and young adults. You’ll be glad to know that there are still very good credit card deals that are available for consumers with a limited amount of credit.
In selecting your first credit card, select the one that has the rewards or perks that is suitable for your needs. Take your time in making the best selections as some credit cards are too costly to maintain.
Here is a shortlist of some of the best credit cards to start with:
|Card||Best For||Min Credit Score Required|
|Capital One® QuicksilverOne® Cash Rewards Credit Card||Cash Back||
Average / Fair / Limited
(600 – 699)
|Capital One® Platinum Credit Card||No Annual Fee|
|Discover it® Student Cash Back||Students|
|Discover it® Secured||Cash Back – No Credit||Poor (300 – 599)|
|Capital One® Secured Mastercard®||First Credit Card – Credit Builder|
What are the Best Credit Cards to Build Credit?
Secured credit cards are your best choice for qualifying for credit if you have no credit history. They will require you a fully refundable deposit amount that will serve as your credit limit. If you want a higher credit limit, you only have to deposit more money.
But there are also credit cards that are offered to consumers with low or poor credit scores and are unable to make a deposit. Here is a short list of the best credit cards for building or rebuilding your credit. These card companies do not require credit checks to apply, and reports to all 3 credit bureaus.
OpenSky® Secured Visa® Credit Card
- OpenSky is supportive in giving credit opportunities to everyone so there is no credit check necessary to apply.
- Your security deposit that is as low as $200 also becomes your credit line limit on your Visa card.
- Annual fee is at $35, while regular APR is at 17.39% variable
Self – Credit Builder Account + Secured Visa Credit Card
- The card’s best feature is the combined credit builder account and secured card products, helping you build credit while saving
- Make 3 monthly on time payments and have over $100 savings progress in your account to automatically qualify for a Self Visa Credit Card without a credit check.
- Annual fee for secured card is $25, while pay only a one-time fee of $9 for the credit builder account
- Regular APR is at 21.74% variable
First Progress Platinum Elite Mastercard® Secured Credit Card
- Apply quick and easy, and receive your card with their New Expedited Processing Option.
- Full-feature Platinum Elite Mastercard that is honored anywhere credit cards are accepted
- Annual fee is $29, while regular APR is at 19.99% variable
Self — Credit Builder Account
- Comes with a CD savings plan that lets you build it with as little as $25 per month, that is fully refundable at the end of your account term
- Self helps you acquire a loan with your CD as security deposit once you have reached at least 12 or 24 monthly deposits
- One-time account fee ranging from $9 to $15 depending on product type
- Regular APR ranges from 12.03% to 15.98% depending on the product type
Discover it® Secured
- Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.
- After 8 months of disciplined use, you may be eligible for a quick transition to an unsecured line of credit with your deposit refunded.
- No annual fee, while regular APR is at 22.99% variable
Assent Platinum 0% Intro Rate Mastercard® Secured Credit Card
- Enjoy 0% APR on purchases for 6 months
- Fully refundable deposit required is as little as $200
- Full-feature Platinum Mastercard and honored anywhere credit cards are accepted
- 24/7 Online access to your account
- Annual fee is $49, while regular APR is 12.99% variable
First Progress Platinum Prestige Mastercard® Secured Credit Card
- Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
- Complete online application process
- Full-feature Platinum Mastercard
- Annual fee is $49, while regular APR is at 9.99% variable
What to Look For When Choosing Credit Cards?
Applying for too many credit cards or regularly switching cards can affect your credit score. That is why it is important to choose the right credit cards at the onset.
In selecting the best credit card for your need, consider the following factors and what you should look for in each:
Annual Percentage Rate
This is the cost of borrowing money from the credit card company when you don’t pay off the balance in full each month. You could negotiate with a lower APR later on once you’ve built a good credit or raise your credit score.
If you aren’t capable of paying your full balance each month, you’ll be asked to pay only a minimum amount, which is usually 3% of your balance or a fixed amount whichever is higher.
This is the fee you pay each year for using the card. This amount is added to your card balance when it is due for payment, and is also charged with interest. If you can, pay this amount in full each time so as not to build on interest charges.
Your credit card also comes with a list of different penalty charges that apply when you go over your credit limit, use your card abroad, or make late payments among others.
Introductory Interest Rates
Introductory interest rates are 20 – 30% lower than the regular APR. When considering this factor, determine how long the introductory rate lasts before the rate starts to increase. You would normally see introductory rate offers in balance transfers.
Loyalty Points and Rewards
Some credit cards are high on rewards in lieu of high APR. Some rewards are relevant only to the user after gaining huge points that in turn encourage you to spend or use the card more. Think about how likely you are to use them.
Check how you may qualify for a cash back – some cards will require you to pay your balance in full each month, or require a purchase amount within a given time prompting you to spend more.
What is the Best Way to Manage Credit Cards?
Your credit cards give you the easiest access to credit when you need it, but if you use it irresponsibly and you’ll see yourself spiral out of control in debt.
Follow these tips on how to properly use your credit card and manage your expenses effectively. When followed diligently, they could also help increase your credit score.
- Keep all your credit card details secure, especially your PIN
- Check your bills and dispute any errors on it
- Pay your balances in full each month. If it’s possible, pay more than your minimum amount due. This will lessen the interest charges on your balances.
- Always pay on time
- Use only 30% of your credit limit
- Avoiding cash withdrawals or credit card cheques
- Avoiding recurring payments on your credit card
You can take advantage of your credit card when building your credit history. Choose among the best that suits your needs and do your best not to misuse them or accumulate debt.