by John Terry |
Last Updated: February 19, 2019 A good credit score is required for many of the cards we write about on this website. So what happens if you need to build your credit first? We have a list of the best credit cards for building your credit.
Understanding Your Credit Score
Before applying for a credit card, you should understand what goes into a credit score. The one downside to travel credit cards is that you will need a good credit score, typically over 690. Even if your score is lower than that, or you’re still trying to build your credit, there are many options.
There are many different ways to check your credit score. Using a credit card responsibly – paying off in full each month – will actually increase your credit score. Many people think more credit cards equals a lower credit score – that just isn’t true.
We have an entire article about the details of what makes up your credit score. In, general it is payment history (35%), how much you owe (30%), length of credit history (15%), new credit (10%) and types of credit (10%).
Best cards to build your credit
The most important thing when identifying cards for building your credit is easy approval cards and cards that add benefit to you. If the cards below don’t excite you, we suggest checking out Nerdwallet for more in depth information.about credit cards.
Once you’ve built up your credit score, check out our list of the best starter credit cards and Points and Miles Beginner’s Guide. Our favorite cards are those with transferable points.
Capital One Quicksilver One
The Capital One Quicksilver One card might be the best card for those with fair-good credit scores. Because of the fee and 1.5% cash back rate, you need to spend $7,800 per year to make it worth it.
- Annual Fee: $39
- Sign-up Bonus: None
- Earning Potential: 1.5% cash back on all purchases.
When it comes to the best credit cards for building your credit, a cash back rate of 1.5% is tough to beat. Given the low annual fee, if you put most of your daily spend on this, you should end up with some cash at the end of the year.
Discover it Miles
The Discover it Miles card is the only mile-earning card on this list. It has an interesting earning model for the first year which gives cardholders a 3% return for the first year. Redeeming your miles comes in the form of statement credits on travel purchases made with your Discover it Miles card. The fact that this card has no annual fee makes it a great credit card for building your credit.
- Annual Fee: None
- Sign-up Bonus: None
- Earning Potential: 1.5% cash back on all purchases; All miles earned will be matched after the first year
Discover it for Students
Students are in luck when it comes to building credit – the number of credit cards for building your credit are much greater. The Discover it for Student is an easier approval for students and also has a very rewarding earning structure. Not only does it not have an annual fee,
- Annual Fee: None
- Sign-up Bonus: Get $20 statement credit each school year your GPA is 3.0 or higher for up to next five years.
- Earning Potential: 5% cash back certain categories such as travel, gas, restaurants based on each quarter (up to $1,500 per quarter), 1% on all other purchases.
Discover it Chrome for Students
Similar to the Discover it for Students, the Discover it Chrome for Students is just as rewarding. Instead of quarterly category bonuses, it earns 2% on gas and restaurant purchases up to $1,000 each quarter and then 1% on all other purchases. It also comes with the first year bonus and it matches all cash back earned through the first year.
- Annual Fee: None
- Sign-up Bonus: Get $20 statement credit each school year your GPA is 3.0 or higher for up to next five years.
- Earning Potential: 2% cash back certain categories such as gas and , restaurants up to $1,000 each quarter, 1% on all other purchases, all cash back earned will be matched after the first year
Discover it Secured
Secured credit cards aren’t a great option, but it if you have bad credit, the Discover it Secured might be one of the only ways to build your credit back up. While this is one of the only secured credit cards that doesn’t rack up fees, this card requires a $200 deposit to open, but the cardholder will get that back when the card is closed. The card has similar bonuses to the Discover it Chrome card – 2% cash back on gas and restaurants and the first year match bonus, so there is some upside.
- Annual Fee: None, but requires $200 deposit
- Sign-up Bonus: None
- Earning Potential: 2% cash back certain categories such as gas and , restaurants up to $1,000 each quarter, 1% on all other purchases, all cash back earned will be matched after the first year
Final Thoughts
When identifying credit cards for building your credit, it’s important to understand that the sign-up bonuses aren’t great. But, once your credit is built up, you’ll be able to apply for other cards like the Chase Sapphire Preferred or the American Express Gold Card.