The Ultimate Guide to the Best Credit Cards To Build Credit

The Ultimate Guide to the Best Credit Cards To Build Credit

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Many people think it is impossible to build credit if you do not have a credit history. This is simply not true! You can start building your credit today with the right credit card.

You have come to the right place if you are looking for the best credit cards to build credit. We will discuss everything you need to know about credit cards and how they can help you build credit. We will cover topics such as how credit cards work, the benefits of using them, and which ones are best for building credit fast. So whether you are just starting or looking for a new card to help improve your credit score, this guide has everything you need!

How Credit Cards Work

Credit cards let you borrow money from a lender (usually a bank) and repay it over time. Once you open a credit card account, the credit card company will set a credit limit. A credit limit, also known as a line of credit, is the amount of money that an institution allows you to use for purchases and payments.

The companies that issue credit cards allow you to repay the money over a certain period of time. The interest rate on credit cards can be high, but if you make your payments on time and in full, the credit companies will not charge any interest. Also, your credit history is crucial when it comes to building credit. Major credit bureaus will pull together all your credit information to come up with a credit profile report. A strong credit profile translates into a high credit rating, which makes it easier for you to get approvals for loans and credit lines in the future.

Types of Credit Cards

The credit card industry has grown over the years. It has made spending so much easier and more convenient. Credit card companies offer various credit cards you can use to make everyday purchases and pay off bills. More so, these cards are very beneficial in building your creditworthiness. While there are many of them to choose from, the most popular ones are:

Rewards Credit Card

A rewards credit card is a credit card that gives you points, miles, or cash back for your purchases. For example, you might get one point for every dollar you spend, and then you can redeem those points for travel, merchandise, or gift cards. You might also get two miles for every dollar you spend on airline purchases, and then you can redeem those miles for free or discounted airfare. In addition, there are credit card companies that offer bonus points in primary categories, such as gas and groceries. Rewards credit cards are great because they give you a way to earn rewards while spending money.

Cash Back Credit Cards

As the name suggests, a cash back credit card is a credit card that gives you a percentage of your purchase back as cash. Cash back credit cards are great because they give you a way to earn a few bucks while spending money. And the best part is, there are no restrictions on how you can use your cash back. You can use all the cash you earn to pay down your balance, withdraw it as cash, or make future purchases.

Secured Credit Cards

A secured credit card is a credit card that requires you to put down a security deposit, which is usually equal to your credit limit. A secured card is great for people with bad or no credit because they allow you to build credit without the risk of default. And the best part is most secured credit cards will eventually convert to unsecured credit cards after you have made consistent, on-time payments.

Free Annual Fee Credit Cards

As the name suggests, a free annual fee credit card is a credit card that does not charge an annual fee. Card companies typically charge cardholders an annual fee to offset the costs of providing cards with many features and benefits. Some credit card companies have dropped annual fees to encourage more people to apply for one of their cards. In return, credit cardholders get to save money instead.

Travel Credit Cards

A travel credit card is a credit card that offers rewards or perks for spending on travel-related expenses. Some travel credit cards offer redeemable points or miles for free or discounted travel. Meanwhile, other travel credit card companies offer perks like free checked bags or priority boarding. If you are a frequent traveler, a travel credit card can help you save money and earn rewards you can use for future travel-related spending.

Benefits Of Using A Credit Card

A credit card is a beneficial product. It makes purchasing and paying bills so much more convenient. Without carrying cash, you can pay for things over the counter. You can also use it to buy items and pay bills online. But apart from these, there are a few more significant benefits that having a secured credit card offers. This includes:

Cash Back, Rewards, and One-Time Bonuses

Many credit card companies offer cash backs and rewards. Others even provide one-time bonuses for credit card applicants with excellent credit history. These are effective marketing strategies to attract more people to get one from them. Cashback credit cards let you earn cash from spending. You can use it for your future purchases or paying bills. The same goes for rewards points. Credit cardholders earn points, which become redeemable when you reach a specific threshold. You can use these points to buy certain items or for travel purposes.

Credit Card Fraud Protection

It is easier for you to avoid fraud losses when using a credit card. Should your card be stolen or lost, you can immediately notify your bank so the thief cannot use your card. Fraudulent transactions can affect your credit score, even if they are not your fault. However, a credit card allows you to notify your credit card provider easily and avoid paying for any unauthorized transactions.

Increases Your Credit Score

Your credit score is a number that represents your creditworthiness. It is based on information in your credit report, which comes from one of the three major credit bureaus. The lenders use the credit report to determine whether you are an excellent candidate for a loan or not. A higher credit score means you are at a lower risk to the lender. In addition, it increases the probability of getting a loan with a lower interest rate.

Higher Credit Line

If you have a positive credit file (paying your credit card bill on time and regularly), credit card companies are likely to give you a credit limit increase. There are many benefits of having a higher credit line, but one of the most important is that it can help you improve your credit score. Your credit utilization- the amount of credit you’re using compared to your credit limit – makes up 30% of your credit score. So by increasing your credit line, you can lower your credit utilization and improve your credit score.

Helps Build Credit

Credit cards are ideal not only for spenders or borrowers. It benefits those with a limited credit history or no credit profile at all. Having a credit card enables you to establish credit history. As you know, having a positive credit history is essential to getting high credit scores.

Authorized User Tradeline

An authorized user tradeline is a credit account listed on your credit report with you as an authorized user. This means that you are not responsible for the debt on the account, but major credit bureaus will include the account history on your credit report. Authorized user tradeline can help build credit because it shows lenders that you have a history of managing credit responsibly. All primary credit card account holders can add authorized users to their accounts.

Things To Consider When Choosing A Credit Card

Choosing a credit card to build credit can get overwhelming. There are so many options available today. Each has its respective offerings. Most of them have really excellent offers, choosing one could get very daunting.

To help solve your dilemma, below are a few things to consider when choosing credit cards to build credit:

Interest Rate

It is vital to look for is a low-interest rate credit card. If you carry a balance on your credit card from month to month, you will be charged with interest in that balance. So, you want to make sure that you choose a card with a low-interest rate, so you don’t end up paying more in interest than you have to. Ideally, though, you pay off your debt on time to avoid interest rates and keep positive credit history.

No Annual Fee

Credit card companies are charging annual fees just for having the card. In return, they will offer rewards and bonuses. Do not be fooled, though. There are many credit card providers out there offering no annual fees. Plus, they give out rewards and bonuses. Keep looking until you find one that suits you.

Reports To All Three Major Credit Bureaus

You want to ensure that the credit card company reports to all three major credit bureaus. This includes Experian, Equifax, and TransUnion. This way, your activity on the card will be reported to all three agencies. Essentially, helping improve your credit score with each one. It is essential to know that lenders rely on these reports to determine your creditworthiness.

Rewards and Bonuses Offered

You would want to make the best out of your credit card, right? When looking for a card, check their rewards and bonuses program. Of all the credit cards available, cash back cards offer the best deals. These cards return a certain percentage of your spending to you so you can use them for future purchases or payments. Travel rewards cards are also excellent. You can earn points or miles every month, which you can use for future travels. Thus, allowing you to save a few bucks.

Penalties and Other Fees

In addition to interest rates, you should also check the cards’ fees and penalties. Sadly, some credit card companies do not disclose their fees upfront. If you will get a credit card, make sure you check these details carefully to avoid paying more than what you are supposed to. Get to know how the card works to take advantage of it without incurring fees or penalties.

Best Credit Cards To Build Credit

Finding the best credit cards to build credit can be challenging with the various options available in the market. But, some credit cards really stand out based on the factors we mentioned earlier. These are:

Discover it® Secured Credit Card

Discover It® Secured Credit Card allows you to earn cashback and does not charge an annual fee. It allows you to build your credit history with the three major credit bureaus. It is a benefit that you will not find in prepaid and debit cards. But there is a downside to it, though. It does not have an intro annual percentage rate (APR) offer on purchases. Also, the bank requires a refundable security deposit of $200 at least.

Capital One Platinum Secured Credit Card

One of the best assets of Capital One Platinum Secured Credit Card is providing quick rewards to responsible credit cardholders. You can get a higher credit line in six months as long as you make payments on time. Also, you have the freedom to pick your own payment date. Capital One Platinum Secured Credit Card does not have annual fees and only requires a $49 security deposit. The downside would be the bank charges a high regular APR at 26.99% variable.

Citi® Secured Mastercard®

With Citi® Secured Mastercard®, you can easily build your credit history. It provides monthly reporting to all three major credit bureaus. This enables you to have free access to your FICO score once available. The bank does not charge an annual fee as well. But, it requires a security deposit of $200 and no intro APR on purchases.

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

The Petal® 1 “No Annual Fee” Visa® Credit Card is perfect for those with little or no credit history. It does not charge an annual fee or require a security deposit. It also does not charge foreign transaction fees. More so, the credit card company offers bonus cash back of up to 10% at select retailers via Petal offers. Unlike many other credit card providers, Petal® may ask you to link your bank account before accepting your credit card application. 

Capital One QuicksilverOne Cash Rewards Credit Card

With Capital One QuicksilverOne Cash Rewards Credit Card, you can earn a higher credit limit in six months. That is, of course, if you are paying off your credit card bills on time. Also, they provide a 1.5% base reward on all eligible purchases. It also does not have annual fees, other hidden charges, and no foreign transaction fees. The challenging part would be the low initial credit limit of $200 and the 26.99% variable APR.

Petal® 2 “Cash Back, No Fees” Visa® Credit Card

Petal® 2 “Cash Back, No Fees” Visa® Credit Card is another card that is ideal for those with little or no credit history at all. This card does not charge annual fees, late fees, or returned payment fees. In addition, it has no foreign transaction fees as well. With 12 on-time monthly payments, you can increase your cash back rate from 1% on eligible purchases to 1.5%. The downside of it, though, is it does not allow you to make balance transfers or cash advances. Also, the card does not have an intro APR on purchases.

Discover it® Student Cash Back

Discover it® Student Cash Back is designed for individuals with little or no credit history. It does not have an annual fee, a late fee on the first late payment, and no APR change for not paying on time. With this card, the company will match all cash back rewards you earn in your first year to Discover’s Cashback Match program. You can earn up to 5% cash back on daily purchases from different merchants. However, you have to reach a certain cap to earn it.

How Many Credit Cards Do You Need To Build Credit?

With credit cards, there is no ideal number. It really depends on your individual credit situation. Sometimes, having multiple credit cards can help you build credit faster. Having many cards requires enormous responsibility, though. Ensure you pay them off on time and as much as possible, in full. Otherwise, it can put you in a more difficult situation.

How To Build Credit Fast With A Credit Card?

Credit cards allow you to build credit fast in a few different ways. This includes:

1. Get Secured Credit Card

A secured credit card is the first step in establishing credit from scratch. This type of card requires an upfront cash deposit, which is usually the same as your credit limit. Unlike other credit cards, you are not supposed to use secured cards forever. You should only use it to build your credit to qualify for an unsecured card.

2. Pay Monthly Payments On Time

Being a responsible credit cardholder, you have to make your monthly payments on time and in full every month. By doing so, lenders will recognize you as a responsible borrower. Your credit score also improves over time when you do this. 

3. Low Credit Utilization Ratio

Another way to build credit fast is to use a credit card with a low credit utilization ratio. As a result, you use less of your credit limit, which is good for your credit score. 

4. Avoid Too Much Debt

Make sure you avoid taking on too much debt by charging only what you can afford to pay off each month. This will not be good for your credit profile.

5. Be An Authorized User

You may also consider buying authorized user tradelines to build your credit fast. An authorized user tradeline refers to a credit card account where the primary account holder adds you as an authorized user. You can use this to build credit since the credit history of the primary account holder will appear on your credit report. If the account holder has an excellent credit history, it can help improve your FICO score in a matter of time. You can purchase authorized user tradelines from reliable tradeline companies like Coast Tradelines.

About Coast Tradelines

Coast Tradelines is a credit services company that offers authorized user tradelines. Coast Tradelines can help you build credit by adding you as an authorized user on one of their established credit accounts. By doing so, you can piggyback off of the good credit history of the account holder and improve your credit score.

Coast Tradelines is a great option if you are looking to build credit with an authorized user tradeline. With years of experience on our plate, we can help you improve your credit score quickly and easily. So if you are looking to build credit fast, be sure to check out Coast Tradelines today. Our lines are open daily during business hours. Call us via our customer hotline or use the contact form on our website to send a message.

Final Thoughts

There is no one-size-fits-all answer when it comes to choosing credit cards to build credit. The best credit card for you will depend on your personal credit situation. However, a few general tips can help you choose the best credit card to build credit.

Some things to consider include the interest rate, credit limit, and annual fee. You would also want to ensure the credit card reports to all major credit bureaus. By following these tips, you can choose a credit card that will suit your needs and help you build credit.

When all else fails, though, other options are available to help build your credit. You can purchase quality authorized user tradelines from us at Coast Tradelines. Buying the right tradelines can help increase your FICO score quickly and easily.