Updated: Nov 21, 2024

Building or rebuilding your credit takes time, but the right credit card can help speed up the process. Check out ways to improve your financial future by choosing a card that fits your specific credit needs, whether you’re starting fresh or trying to recover from past financial missteps.

Credit cards can be powerful tools for building or improving your credit score when used responsibly. However, not all credit cards are designed for those with limited or damaged credit histories. Some are specifically tailored to help you build a strong foundation, while others reward you for consistent, responsible use. In this article, we’ll dive into the best credit cards for every stage of the credit-building journey, from secured cards to options that offer rewards as you progress.

1. Secured Credit Cards: The Best Starting Point

If you’re new to credit or looking to rebuild a damaged score, secured credit cards are a great place to start. A secured card requires a cash deposit, which acts as your credit limit. While this might seem like a drawback, the deposit protects the issuer, making it easier for people with no credit or bad credit to get approved.

Top Secured Cards:

• Discover it® Secured Credit Card
  This card offers something rare among secured cards: cash back rewards. You earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter) and 1% on all other purchases. Plus, after seven months, Discover reviews your account to see if you qualify to transition to an unsecured card, returning your deposit if approved. This is ideal for someone looking to build credit while earning rewards at the same time.

• Capital One Platinum Secured Credit Card
  One of the standout features of this card is the ability to qualify for a higher credit line after making your first five monthly payments on time. The security deposit starts as low as $49, depending on your creditworthiness. It’s perfect for those seeking a path to improve their credit without tying up too much money in a deposit.

Secured cards are the simplest way to start building credit since they report to the major credit bureaus. The key is using them responsibly by keeping balances low and paying off your bill on time every month.

2. Credit Cards for Limited Credit: Building a Credit History

Once you’ve started building your credit with a secured card, or if you already have limited credit history, you might be ready for an unsecured credit card designed for beginners. These cards typically offer lower credit limits but often come with no deposit requirement and may even provide some basic rewards.

Top Cards for Limited Credit:

• Capital One Platinum Credit Card
  This card is an excellent option if you have limited credit history. While it doesn’t offer rewards, it’s designed to help you build credit with responsible use. One perk is that you can be considered for a credit line increase after just six months of on-time payments.

• Petal® 2 “Cash Back, No Fees” Visa® Credit Card
  Petal® 2 is unique because it uses both traditional credit scores and other factors like your banking history to approve applicants, which can be great for someone without a long credit history. It offers 1% cash back on purchases, which increases to 1.5% after 12 on-time monthly payments. The best part? There are no fees—no late fees, annual fees, or foreign transaction fees—making it one of the most user-friendly cards for beginners.

Using cards for limited credit responsibly helps you establish a positive credit history. With a good payment track record, you can see your score improve steadily over time.

3. Credit Cards for Rebuilding Credit: Recovering from Financial Setbacks

If your credit has taken a hit due to missed payments, high credit card balances, or other issues, you might be in the rebuilding stage. Cards designed for credit repair can help you regain control, often providing tools to monitor your progress and help you form better financial habits.

Top Cards for Rebuilding Credit:

• Credit One Bank® Platinum Visa® for Rebuilding Credit
  This card is aimed at people with poor or fair credit who are actively working on rebuilding. It offers 1% cash back on eligible purchases, which is a nice incentive for responsible card use. Be aware that this card does have an annual fee, but it’s a solid option if you need a card that reports to all three major credit bureaus to track your rebuilding progress.

• Mission Lane Visa® Credit Card
  With no hidden fees and a straightforward approach, the Mission Lane Visa® is an excellent choice for rebuilding credit. While it has a higher APR, it is designed for people with low credit scores and doesn’t require a security deposit. Regular on-time payments can help improve your credit over time, making this card a good option for those looking to bounce back from credit damage.

Rebuilding your credit is about patience and persistence. These cards give you the tools to get back on track, but paying attention to your spending and making consistent payments is key.

4. Credit Cards with Rewards for Good Credit Behavior

Once you’ve built or rebuilt your credit and your score is in better shape, you may want to explore credit cards that reward you for your responsible credit behavior. These cards typically offer perks like cashback, points, or miles, along with competitive interest rates and no annual fees.

Top Reward Cards:

• Citi® Double Cash Card
  This card offers one of the best cash-back deals available: 2% back on every purchase—1% when you buy and 1% when you pay. It’s an excellent choice for those with good credit looking for a simple, no-frills rewards card that incentivizes paying off balances on time.

• Chase Freedom Flex℠
  If you’re ready for more robust rewards, the Chase Freedom Flex℠ offers 5% cash back on rotating categories each quarter (up to a quarterly maximum) and 1% on all other purchases. With no annual fee, it’s a great card for those who want to earn rewards while maintaining responsible credit use.

5. Tips for Using Credit Cards to Build or Rebuild Credit

Choosing the right credit card is just the first step in building a strong credit history. Here are a few tips to ensure you get the most out of your credit-building efforts:

• Pay on time, every time.
  Your payment history makes up 35% of your credit score. Even one missed payment can significantly hurt your score.

• Keep your balances low.
  Credit utilization (the amount of credit you’re using compared to your credit limit) is another important factor. Aim to keep your balances below 30% of your total credit limit.

• Don’t apply for too many cards at once.
  Each time you apply for a new card, the issuer performs a hard inquiry on your credit report, which can temporarily lower your score. Only apply for cards that you’re likely to be approved for.

• Monitor your credit score regularly.
  Many credit cards offer free credit score monitoring as part of their services. This can help you track your progress and spot any potential issues early.

Building or rebuilding credit doesn’t happen overnight, but with the right card and responsible use, you’ll see progress. By focusing on payment consistency, low balances, and thoughtful card choices, you can steadily grow your credit score and unlock better financial opportunities.