The 6 best starter cards for building your credit

Aug 21, 2020

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Starting from scratch with credit cards can be a daunting task. At TPG, we want to give you the confidence to take control of your financial journey — wherever you might happen to be. Remember, everyone started as a beginner at one point or another.

(Photo by Shutterstock)
(Photo by Shutterstock)

From simple rules to stay out of card debt to debunking myths about your credit score, we’re here to help along the way. And whether you’re building credit from the get-go — or looking to rebuild — this guide will help you consider the best credit card for you.

New to the credit card world? Sign up for our daily newsletter and check out our beginner’s guide.

Today, let’s take a closer look at six of the best starter cards for building your credit to bring more stability to your financial future. From entry-level first cards to secured cards, these products will help those who lack an extensive credit profile — or need to repair some financial mistakes from the past.

Note: The Discover it Secured is not currently available through The Points Guy and the information about it may be out of date.

In This Post

Comparing the best cards to build credit

Card Best for Bonus Annual fee 
Capital One® Platinum Credit Card Starting out with some credit None $0
Chase Freedom Unlimited Future value $200 bonus after spending $500 in the first three months, plus earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year. $0
Discover it Secured Beginner rewards At the end of your first year, Discover automatically matches all the cash back you earned $0
Bank of America® Cash Rewards Credit Card for Students Students $200 cash rewards bonus after making at least $1,000 in purchases in the first 90 days of your account opening $0
Citi® Double Cash Card Flat-rate cash back None $0
OpenSky® Secured Visa® Credit Card No credit check None $35

The information for the Capital One Platinum, Chase Freedom Unlimited, Discover it Secured and Bank of America® Cash Rewards Credit Card for Students has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

As you can see, these cards run the gamut from household names like Chase to much more niche players in the secured card landscape. Let’s take a closer look at each of these cards that are available to see which may fit the bill for you.

Best cards to build credit

Capital One® Platinum Credit Card: Best for average credit

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Sign-up bonus: None

Rewards: None

Who should apply: This card is designed for both credit card novices and those that are looking to build up their credit. In fact, Capital One designates (and markets) the Platinum for consumers with average credit. Taken directly from the Capital One website, this card is a fit for you if:

I have limited credit history. I’ve had my own credit card or other credit for less than 3 years (including students, people new to the U.S., or authorized users on someone else’s credit card).

When you have an average credit score or limited credit history, you likely won’t be accepted for reward or travel cards that require good to excellent credit for approval. Therefore, there’s no need to shoot for the stars just yet if the likelihood of getting a card is low.

It’s likely in your best interest to open a card — even a basic one — to get positive information flowing into your credit reports and build up a credit history.

Chase Freedom Unlimited: Best for future value

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Sign-up bonus: $200 bonus after spending $500 in their first three months, plus earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year.

Rewards: Earn unlimited 1.5% cash back on purchases

Why we like it: The Chase Freedom Unlimited may be a good fit if you have some initial credit to start out. It’s also a great starter card because it’s buildable.

When you have this card by itself, you’re earning 1.5% cash back on purchases. There are no bonus categories to worry about or complicated points systems. However, as you get more comfortable with credit card rewards, this is an easy card to pair with certain other Chase cards to round out a more complete credit card strategy.

When you have this card and either the Chase Sapphire PreferredChase Sapphire Reserve or the Ink Business Preferred Credit Card, you can combine the rewards you earn on the Freedom Unlimited with your other point balances to effectively convert the cash-back earnings into Chase Ultimate Rewards points — which means you can transfer the points you earn on it to one of Chase’s 10 airline and three hotel partners or redeem them for added value directly in the Ultimate Rewards travel portal. Ultimate Rewards points are some of the most valuable points when it comes to redeeming for travel.

Discover it Secured: Best for beginner rewards

Earn rewards at restaurants with this Discover card. (Photo by Nick Ellis/The Points Guy)
Earn rewards at restaurants with this Discover card. (Photo by Nick Ellis/The Points Guy)

Sign-up bonus: At the end of your first year, Discover automatically matches all the cash back you earned

Rewards: 2% cash back at gas stations and restaurants up to $1,000 each quarter

Who should apply: The Discover it Secured is one of the few secured credit cards that earns rewards. With this card, you can earn 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter you enroll and 1% cash back on everything else. Plus, Discover will match all the cash back you’ve earned at the end of your first year. This means you can earn rewards while you work to build your credit by using your card responsibly and paying your bill each month.

As a cardmember, you can check your FICO score for free and you won’t pay any foreign transaction fees when you use your card abroad. After you’ve been a cardholder for eight months, Discover will automatically review your account monthly to see if you are eligible to get your security deposit back and move to an unsecured card. Discover also will waive the late payment penalty fee the first time you pay late.

Related reading: Your ultimate guide to Discover cards

Bank of America® Cash Rewards Credit Card for Students: Best for students

(Photo by Parinda Yatha / EyeEm / Getty Images.)
(Photo by Parinda Yatha / EyeEm / Getty Images.)

Sign-up bonus: $200 cash rewards bonus after making at least $1,000 in purchases in the first 90 days of your account opening.

Rewards rates: 3% cash back in the category of your choice and 2% cash back at grocery stores and wholesale clubs (up to $2,500 in combined spending each quarter at choice category, grocery stores and wholesale clubs, then 1%); 1% on everything else

Who should apply: The Bank of America Cash Rewards credit card for Students is unique in the sense that it offers a lot of flexibility in its award earning structure.

The card has a 3-2-1 cash back arrangement, and the cardholder can select which category they want to earn a 3% bonus on each month. Your options include gas, online shopping, dining, travel, drugstores, home improvement and furnishings. The card also earns a consistent 2% back at grocery stores and wholesale clubs and 1% elsewhere. However, it’s important to note that the 3% and 2% bonus categories are limited to your first $2,500 in combined purchases each quarter. Once you reach that threshold in a quarter, all your purchases revert to 1% cash back.

Unlike many others on this list, the card offers a decent sign-up bonus: $200 in cash rewards after you spend at least $1,000 on purchases in the first 90 days of account opening.

Citi® Double Cash Card: Best for flat-rate cash-back

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Sign-up bonus: None

Rewards: Earn 2% cash back on every purchase (1% when you buy, plus 1% as you pay)

Who should apply: If you’re looking to earn a solid cash-back return on everyday purchases beyond your first year, you may want to consider the Citi Double Cash Card. As its name suggests, the card earns 2% cash back on all purchases (1% when you buy, plus 1% as you pay). While other mid-tier credit cards may have more valuable perks, 2% back on everything leads the pack in terms of flat-rate rewards for cash-back credit cards. Plus, there’s no limit on the amount of cash back you can earn.

Like the Freedom Unlimited, opening the Double Cash card now could unlock more valuable rewards in the future. Cardholders who also have the  Citi Premier® Card or Citi Prestige® Card can effectively convert their Double Cash earnings into fully-transferable Citi ThankYou points — which TPG values at 1.7 cents apiece. As a result, even though the card may be slightly easier to get approved for without extensive credit history, the flat but respectable 2% earning rate plus the potential to pair it with a higher-end Citi card ranks it among one of our best rewards credit cards here at The Points Guy.

Related: What credit score do you need to get the Citi Double Cash Card?

While the Citi® Double Cash Card is part of the Mastercard network and is thus more widely accepted than Discover, it does have a 3% foreign transaction fee, so you won’t want to use it outside of the U.S.

The information for the Citi Premier and the Citi Prestige card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

OpenSky® Secured Visa® Credit Card: Best for no credit check

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Sign-up bonus: None

Rewards: None

Who should apply: Looking to build credit and don’t mind paying an annual fee? While the card lacks any perks or rewards, the OpenSky Secured Visa Credit Card can increase your credit rating without needing a credit check. With an easy approval process, this card may provide the key to a better financial path.

This is a foundational beginner’s card meant for individuals that are looking to build credit by making on-time payments. In terms of secured cards, the OpenSky Visa is one of the few that you can qualify for without a bank account or credit check. That means if you’re grappling with past financial mistakes, or just have bad to poor credit, this is a card that might be on your radar. Additionally, those without any credit history, like students, can build credit from scratch.

Once approved, your card usage is reported to the three major credit card agencies — TransUnion, Equifax and Experian. When you have a solid credit score — “good” or higher is 690 and above — it’ll unlock the door to higher-profile cards with more generous rewards and perks.

Related reading: Your FICO score and which credit cards offer it for free

It’ll also open opportunities for car loans and mortgages with lower interest rates. This makes a secured card, such as the OpenSky Visa, a much better option than using cash or prepaid cards, since those payment methods don’t help in developing credit.

How to build credit with a credit card

If you’re looking to build or repair your credit with a credit card, you’ll want to make sure the card you get will report your payment activity to the credit bureaus. All of the cards described in this guide do so.

Related: 5 ways to use cards responsibly

Your credit report (which includes your payment history, accounts and more stats about your past relationships with borrowing money) and credit score are what lenders look at when deciding to approve you for lines of credit. This includes things like mortgages, small business loans, car loans, credit cards and even apartment rentals. The better your score, the more likely you are to be approved — and the better your interest rates on accounts.

Credit cards aren’t the only way to build credit, but they are one of the easiest ways.

Related: 7 things to understand about credit before applying for cards

Featured photo by kizilkayaphotos via Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,600

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.