Tuesday, September 27, 2022

What Is The Best Credit Card To Start Your Credit

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Best Secured Credit Cards For No Credit

The 5 BEST Credit Cards For Beginners in 2020

To get a credit card for the first time, you must be at least 18 years old and have enough income to afford monthly credit card payments, in addition to your other expenses. The minimum payments on a starter credit card usually are around $15 per month.

The two basic steps involved in getting a credit card for the first time are to: 1) compare credit card offers designed specifically for people with limited or no credit history and 2) apply for one with no annual fee, if available rewards and APRs can be the tiebreaker.

There are plenty of other things about the process of picking, applying for and getting your first credit that are important to learn, too. Well walk you through them below, step by step.

We Analyzed 27 Credit Cards That Are Marketed Toward Consumers With No Or Poor Credit To Determine The Best Cards For Building Or Rebuilding Your Credit

Selects editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

If you lack a credit history or have poor credit, opening a credit card can be a smart way to build or rebuild credit as long as you practice responsible financial behavior.

While there are thousands of credit cards available, most require some sort of credit history in order to qualify. This can make it hard for people with less than stellar credit , or no credit at all, to qualify for a card.

Secured credit cards are one of your best chances at qualifying for credit. They’re similar to traditional cards but require you to make a deposit in order to access a credit limit. Whatever amount of money you deposit becomes your credit limit. If you want a higher credit limit, you’ll need to deposit more money.

Your security deposit acts as collateral if you fail to make payments. But don’t worry about losing that money your deposit is refundable if you pay your balance in full and close your account.

Select analyzed 27 credit cards that are marketed toward consumers with no or poor credit to determine the best cards for building or rebuilding your credit. We considered a number of factors, including security deposit minimums, fees, rewards programs and APR.

Here are Select’s picks for the top credit cards for building or rebuilding your credit:

Keys To Building Credit With A Credit Card

  • Pick the Right Credit Card. Its important to do research before you apply. Consider your needs, then compare the terms of cards that cater to those needs. You can use WalletHubs credit card comparison feature to help.
  • Always Pay On Time. Missing a payment is one of the worst things you can do to your credit. A good payment history is essential for future approvals and credit limit increases, so make sure to always make at least the minimum payment before its due.
  • Pay In Full Whenever Possible. Paying just the minimum required will keep your account in good standing, but it wont save you on interest. Paying in full by the due date does, though. And you dont want to get in the habit of spending more than you can afford to repay.
  • Dont Max Out Your Limit. Using more than 30% of your credit risks damage to your score. 1%-10% utilization will help your score the most. And, of course, dont spend beyond your means, regardless of what our limit is.
  • Check Your Credit Score & Report Regularly. You can check your latest credit score and report for free on WalletHub. This will help you make sure you stay on the right path. It also allows you to catch errors on your report and dispute them, which can help your score.

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Scotiabank Momentum Visa Infinite Card Vs Tangerine Money Back Credit Card

Scotiabanks Momentum Card has a similar cash-back structure to Simplii Financials. You rack up 4% for groceries and recurring payments, 2% for gas and daily transit and 1% on everything else.

All of this is great but only for the first year. Starting on the second year, the card starts charging a $120 annual fee. Depending on how much you spend per month, you may not be able to offset or benefit from your cash-back services after the first year.

It is also important to note that Scotiabank is not a digital bank, and has physical branches all over the country.

In cases where you prefer to speak with someone in person about your credit card or make cash payments towards your balance, Simplii Financial or Tangerine will not be able to offer what Scotiabank can as they are both digital-only banks.

Apply For The Card That Offers You The Highest Overall Value

The 5 Best First Credit Cards

Narrowing your choices is the easy part, but deciding between two or three similar cards can be quite difficult. If you’ve already found a clear winner after Step 3, go with that one. If not, its time for a tiebreaker round.

Look closely for differences. All other values being equal, here are some factors that might set a card apart:

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Deserve Edu Mastercard For Students

Our pick for: Student card international students

The Deserve® EDU Mastercard for Students doesnt require applicants to have a co-signer or security deposit, and international students don’t need a Social Security number. That makes it a little easier to get approved even for students with limited credit histories. Plus, it comes with a solid 1% back on all purchases. Read our review.

» NO-DEPOSIT STARTER CARDS

It’s possible to qualify for these cards without a U.S. credit history if you meet other criteria.

How Do Credit Cards Work

Its important to understand exactly what credit cards do, so you can use them to maximum advantage without falling into financial trouble. There are lots of benefits that come along with having a credit card. For example, they offer credit that can be used when you make a purchase, for balance transfers and/or cash advances. Essentially, your credit is like a short-term loan with a balance that comes due every month. As you pay down your balance, the credit available to you the following month starts to go back up to the maximum credit limit on your card.

A credit cards strongest advantage is convenience. Simply pay for your purchase with your credit card and you will be billed for the outstanding balance the following monthno cash in your wallet required. Other benefits include the ability to accrue rewards and pointssuch as cash back or travel pointsbased on a percentage of your purchases each month, usually between 1% to 4%, depending on which credit card you choose. You can then redeem those points for gift cards, travel or other items offered through the credit card companys online rewards catalogue.

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Should You Pay An Annual Fee To Earn Cash Back Or Points

One of the most common factors youll need to consider when looking for a new credit card no matter how many cards you have is whether any given card is worth paying an annual fee to own.

Outside the subprime card realm, most credit cards with annual fees charge the fee to help pay for purchase rewards or other card benefits. This means youll need to objectively look at the real value of what the card offers you and your spending habits.

For example, consider hypothetical credit cards Card A and Card B. Card A offers 2% cash back and has a $50 annual fee, while Card B only offers 1% cash back, but it has no annual fee. In this case, whether it is worth paying the $50 annual fee to unlock a higher rewards rate will depend entirely on how much spend you put on the card.

As the table below shows, Card A definitely earns more cash back, but, when you subtract the $50 annual fee from your earnings, the rewards from Card B actually come out ahead until the point at which you reach $5,000 in spending.

So, if youre a light spender who wont use your card much, youll actually be better off with the lower rate and lower fees of Card B. However, if you know youll use your card frequently and will likely put more than $5,000 a year of spend on the card, then Card A may present the better value, even with an annual fee.

How To Apply For A Credit Card For Bad Credit

Best First Credit Card – Starter / Beginner Cards for No Credit History

1. Know your credit score

One of the biggest mistakes people make with credit card applications is choosing cards they don’t qualify for. Applying for a card that requires good credit when you have a score of 580 is a guaranteed rejection. That wouldn’t be so bad except that each application goes on your credit report and can hurt your score. Multiple applications can just compound the damage. Before you apply, know where you stand. You can get your free credit score through NerdWallet.

2. Find a card that suits your score

Cards on this and other NerdWallet pages have a “recommended credit score” graph that shows what kind of credit you’ll need to qualify. If you’re logged in to NerdWallet with your free score, you’ll be able to see where your score lands on that graph. If you’re not logged in but know your score, check how it compares to the recommended range.

3. Apply

4. Fund your security deposit

With a secured credit card, the issuer won’t open your account until you’re provided your security deposit. Most cards have a minimum in the range of $200 to $300. Your deposit typically determines your credit limit, so if you deposit $500, you’ll have a credit limit of $500 deposit $1,000, and you’ll get a credit line equal to that amount. Issuers let you fund the deposit with a direct transfer from a checking account some allow you to pay by money order if you don’t have a bank account.

5. Receive your card

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How To Qualify For A Business Credit Card For Startups

Small business credit cards are one of the few business loans available to startups without at least a year in business or strong business revenues. There are a few business credit cards with minimum business revenue requirements but most will accept income from all sources, and will ask questions about the business as well as personal finances to qualify. Almost every card requires a personal guarantee.

Capital One Platinum Credit Card: Best No

Why we picked it: This credit-builder card is top-notch in addition to no hidden fees , theres also no annual fee.

Pros: With the Capital One Platinum, you can pay by check, online or at a local branch without paying a fee. Also, you can pick your monthly due date.

Cons: Unfortunately, this card has no sign-up bonus or ongoing rewards, making it a tough choice if you are looking for a multi-purpose card for the long haul.

Who should apply? If your main objective is to build credit while keeping costs to a minimum, this pared-down no-annual-fee card checks off all the boxes.

Read our Capital One Platinum Credit Card review

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Faqs On Best Credit Cards

  • Which credit card is the best for online shopping in India?

    You have a lot of options for shopping credit cards in India. Depending on your need, you can choose SBI SimplySave Credit Card, Citi Cashback Card and or HSBC Visa Platinum Credit Card, to name a few.

  • Which is the safest credit card in India?

    Most credit cards in India are safe. Credit cards like HSBC Visa Platinum Card and Citi Cashback Card are a few of the safe credit cards.

  • Which credit card in India has rewards program?

    The system of reward points varies from one credit card to another. For the best reward points you can choose HDFC Freedom Credit Card, IndusInd Bank Platinum Card or Citi Cashback Card to name a few.

  • Which credit card in India offers the best travel benefits?

    Many credit cards in India comes with basic travel benefits which include lounge access at the airport, accelerated reward points on travel bookings, etc. However, there are many credit cards which offer added benefits on travel such as the MakeMyTrip ICICI Bank Credit Card, HDFC Bank Regalia credit card, etc.

  • Do top credit cards have higher annual fees?

    No, there is a range of credit cards offered by different banks which offer many benefits at a nominal annual and joining fee. Some of the credit cards are the HDFC Bank Moneyback credit card, ICICI Bank Platinum Credit Card, etc.

  • Indian Oil Citi Credit Card

    Best First Credit Card to Start With 2019

    This fuel credit card helps you save money on fuel and, at the same time, earn rewards on all your purchases.

    Benefits of Indian Oil Citi Credit Card

    • With Indian Oil Citi Credit Card avail annual fee waiver on spend of Rs.30,000 p.a.
    • Earn 4 Turbo Points on every Rs.150 spent on the purchase of fuel at IndianOil outlets across India.
    • Fuel surcharge waiver at IndianOil outlets.
    • Earn 2 Turbo Points on every Rs.150 spent at supermarkets and grocery stores.
    • Earn 1 Turbo Points on every Rs.150 spent on all other purchases.
    • Redeem Turbo Points for free fuel at IndianOil outlets. 1 Turbo Point is equal to free fuel worth Re.1. Points can also be redeemed at selected merchant outlets and for gift vouchers at major brands.

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    For Flat Rate: Td First Class Travel Visa Infinite Card*

    Some people want to earn points when they travel, as well as on an ongoing basis. If this sounds like you, then the TD First Class Travel Visa Infinite Card is our top choice. You can rack up TD Rewards points throughout the year and then easily make a redemption through Expedia for TD. With this card, youll get 3 points per $1 spent on all your everyday purchases and 9 points per $1 spent when you make online purchases through Expedia for TD. That means youre earning a 1.5% and 4.5% return respectively in travel points. Expedia For TD is just like the regular Expedia platform, so youll have no problem finding ways to redeem your points.

    With the annual fee of $120 rebated for the first year and a welcome bonus of up to 100,000 pointswhich has a travel value of up to $670 $500 when you book travel purchases through ExpediaForTD.comthis is one of the best travel credit card offers available right now.

    How Do I Choose The Right Starter Card

    It really depends on your credit score and where you’re at in your credit journey. If you’ve never had a credit card before, it’s likely you’ll have to get started with a secured credit card that requires a cash deposit in order to shore up a small line of credit.

    If your FICO credit score is at least “fair,” or above 580, on the other hand, you may qualify for a card geared to consumers with average credit.

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    How To Use A Credit Card

    Whether your credit card helps or hurts you all depends on how you use it. To ensure that your credit card provides value and doesn’t get you in debt, here are a few key guidelines:

    • Use your credit card regularly: To build your payment history and increase your credit score, you need to use your credit card for at least one purchase per month. That’s just a minimum, though. If you have a rewards card, consider putting your purchases on your credit card to earn as much back as you can.
    • Only charge what you can afford: It’s safest to only purchase what you can afford with the money you have your bank account. This will help you avoid overspending and debt. The exception is when you have a card with a 0% intro APR on purchases, since those are designed for financing expenses.
    • Pay on time and in full: Late payments can lead to fees, interest charges, and a lower credit score. Missing a payment does not help your credit score carrying a balance does not help your credit score. It’s important to always pay on or before the due date. Once again, 0% intro APR credit cards are an exception. You can carry a balance on those during the intro period without interest .
    • Take advantage of your card’s perks: All of the good credit cards have their share of benefits. Spend some time learning what your card’s benefits are so that you can use them when you need them.

    How Old Do You Have To Be To Get A Credit Card

    The BEST 3 First Credit Cards To Build Your Credit Score

    You have to be at least 18 years old to open a credit card on your own. If you’re younger, a parent or other relative may offer to add you as an authorized user on one of their cards. Being an authorized user might help your credit, but the account won’t be in your name.

    If you’re under 21 years oldeven if you’re a full-time studentthe federal requires you to have enough independent income or assets to afford the card’s minimum payment. You’ll also need enough income or assets to support a higher minimum payment if you want a credit limit increase.

    The independent income could be from a part- or full-time job or a regular allowance that a relative sends. However, unless someone cosigns your credit card application , you can’t include their income.

    Once you’re 21 or older, you can include another person’s income on your application if you have a reasonable expectation that you can access the funds. A common example is a stay-at-home spouse who uses their working partner’s income to qualify for a credit card.

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