4 Best Credit Cards to Build Credit [March 2024] (2024)

• What are the best credit cards to build credit with?
• Best credit cards to build credit compared
• Methodology
• Sources
• Beginner’s guide to the best credit cards for building credit
• About the author
• User questions & answers
• Expert opinions

What Are the Best Credit Cards to Build Credit With?

There are two main types of credit cards to build credit with:secured credit cardsandunsecured credit cards for people with limited or no credit. Astudent credit cardmay also be an option if you’re in college. We recommend seeking out the cheapest offer that you can get approved for. Your goal at this stage should be to start building your credit as soon as possible. If you’re looking for a card to rebuild your credit with, check out thebest credit cards for bad credit.

Best Credit Cards for Building Credit Compared

Check out our editors’ picks for the year’s best starter credit cards for more money-saving offers. Ourguide on how to build credit also has plenty of pointers to help get you started on the right foot.

Methodology for Selecting the Best Credit Cards to Build Credit

To identify the best credit cards with which to build credit, WalletHub’s editors regularly compare 1,500+ credit card offers based on key WalletHub Rating components, including their approval requirements, fees, rewards, initial bonus, and interest rates. We also take some key secondary factors into account, such as whether a security deposit is required or an applicant must be a student to qualify.

We start by identifying the cards with the lowest annual fees, preferably $0 per year, as it is best to keep costs low while building credit. We then identify the cards with the best rewards, using low APRs as a tiebreaker, because people working to build credit should strive to pay their credit card bill in full every month. Finally, the cards with the lowest two-year cost are selected.

How Two-Year Cost Is Calculated

Two-year cost is used to approximate the monetary value of cards for better comparison and is calculated by combining annual and monthly membership fees over two years, adding any one-time fees or other fees (like balance transfer fees), adding any interest costs, and subtracting rewards. Negative amounts indicate savings. When fees or other terms are presented as a range, we use the midpoint for scoring purposes.

Rewards bonuses and credits have been taken into account for two-year cost calculations. However, bonuses applicable to only a very small portion of cardholders are not considered. For example, credits and bonuses awarded for spending or redeeming rewards through a company portal with non-co-branded cards have not been taken into account. Similarly, bonuses and credits related to spending with specific merchants using a non-co-branded card have not been taken into account (for example, if Card A offers credits with DoorDash, this feature would not be factored into calculations because it is hard to assess how many cardholders would use the benefit or exactly how much value they'd get from it).

Cardholder Spending Profiles

Given that different users have different goals and are likely to use their credit cards differently, we identified spending profiles that are representative of different users’ financial priorities and behaviors. For each cardholder type, we have assumed a specific amount of monthly spending by purchase type (e.g., groceries, gas, etc.), as well as an average balance, balance transfer amount, amount spent on large purchases and average monthly payment. Spending assumptions are based on Bureau of Labor Statistics data.

Sources

WalletHub actively maintains a database of 1,500+ credit card offers, from which we select the best credit cards to build credit for different applicants as well as derive market-wide takeaways and trends. The underlying data is compiled from credit card company websites or provided directly by the credit card issuers. We also leverage data from the Bureau of Labor Statistics to develop cardholder profiles, used to estimate cards’ potential savings.

Beginner’s Guide to the Best Credit Cards for Building Credit

How to Build Credit With a Credit Card

To build credit with a credit card, all you need to do is get a credit card in your name and then use it responsibly. Most importantly, you need to pay the bill by the due date every month, since payment history is the most important component of your credit score. The process is actually pretty simple, despite what you may have heard.

To ensure you always pay on time, you could set up automatic monthly payments from your bank account. You can choose to pay the full amount due, the minimum amount required, or a custom amount. Alternatively, you could simply pay any membership fees your card charges and lock it in a desk drawer. As long as there’s no balance, you’ll continue getting credit for paying the bill on time even if you don’t use the card.

You’ll build credit faster if you have your own credit card account and manage it well, but you can also build credit as an authorized user on a credit card account. This is a great strategy for parents who want to give their kids a leg up before they can qualify for their own account.

Learn more about how to build credit with a credit card.

Can You Build Credit With a Debit Card?

No, you cannot build credit with a traditional debit card. A normal debit card does not report to the credit bureaus, so it will not add information to your credit file or affect your credit score.

New products such as the Experian Smart Money Digital Checking Account and Debit Card are an exception, though. This unique type of account allows you to build credit by paying bills like rent and utilities. But it only affects certain types of credit scores.

Learn more about how to build credit and the differences between credit cards and debit cards.

Pros and Cons of Using a Credit Card to Build Credit

The benefits of using a credit card to build credit ultimately outweigh the potential drawbacks. Simply owning a credit card is the most efficient way to build credit history because maintaining a $0 balance will result in positive information flowing into your credit report each month. In other words, you don’t need to actually use the card to make purchases as long as you make sure any fees are paid.

Opting for a credit card over a credit-builder loan also gives you many more options to choose from, and a credit card doesn’t force you into debt like a personal loan would.

Plus, the potentially negative aspects of credit card use can be managed and avoided. Paying the bill in full monthly will prevent expensive interest charges from rearing their ugly head, and if you need to remove the temptation to overspend, you could always lock your card in a drawer somewhere.

Learn more about the advantages and disadvantages of credit cards.

Why Using a Credit Card Responsibly Is the Best Way to Build Credit

• Credit Cards Don’t Have to Cost You a Thing: There are plenty of no annual fee credit cards for people with no credit or bad credit. And credit building doesn’t require making purchases. Even a credit card with zero balance will help you. That’s key because loans will generally force you into debt.
• Credit Cards Report Monthly to Credit Bureaus: All major credit cards report information to the three major credit bureaus on a monthly basis, usually at the end of your billing cycle. This gives you the opportunity to quickly establish credit history from scratch or reduce the impact of previous mistakes. You just have to pay your bill on time.
• Credit Cards Are Pretty Easy to Get: The easiest credit cards to get, which are generally secured cards, offer nearly guaranteed approval. You just need to be at least 18 years old with enough income or assets to make monthly minimum payments. In other words, there isn’t much standing in the way of you building credit.

It might seem like a bit of a chicken-and-egg situation, but building credit with no credit isn’t as hard as you might think. All you really need is a credit card, and there are many cards you can get without any credit experience. There are ways to build credit without a credit card, too. But credit cards provide the most direct route to better credit.

Types of Credit Cards You Can Build Credit With

Any type of credit card can help you build credit. Credit cards from major issuers all relay account information to your credit reports with the three major credit bureaus on a monthly basis. As long as the information being reported is positive, reflecting on-time payments and reasonable credit utilization, it will add to your credit history in a good way and build up your credit score.

If you’re starting from scratch or rebuilding damaged credit, however, not just any credit card will do because you won’t be able to get approved for most cards. For your convenience, we’ll summarize the most common types of cards used for building credit below.

• Starter credit cards – These are just normal credit cards for beginners. You don’t need any credit history to get approved, but you will need enough income to afford the monthly bill payments.
• Student credit cards – These are unsecured starter credit cards specifically for people who are enrolled in school. The best student credit cards tend to be the best credit cards for people with limited credit overall.
• Secured credit cards – These cards require you to place a refundable security deposit, the amount of which usually becomes your spending limit. They are easy to get with limited or bad credit, and they can help you build credit just like any other credit card.
• Store credit cards – These cards are easy to get if you have fair credit or better (a 640+ credit score), and they often provide valuable rewards. Store cards usually have $0 annual fees, too, and they can help you build credit if you pay the bills on time.

If you’re not quite sure where to turn, there are some pretty clear-cut rules of thumb about which types of cards to target in different situations.

For students, the best type of credit card to build credit with is a student credit card. You might be able to get a better deal from a student credit card than you’d get from a standard starter credit card because students tend to have above-average earning potential. Credit card issuers want to start a relationship with them to earn future business.

For other newcomers, the best type of credit card to build credit with is an unsecured starter credit card because you won’t have to place a security deposit and you might not have to pay an annual fee. You might be able to get a card that rewards you for making purchases, too.

For people rebuilding their credit after past mistakes, the best type of credit card to use is a secured credit card. Secured cards are easy to get, and having to place a refundable security deposit helps minimize fees and maximize rewards.

Learn more about the different types of credit cards.

What to Look for in a Credit Card for Building Credit

The most important things to look for in a credit card for building credit are low fees and high approval odds. Those features will enable you to start building credit as soon as possible as well as save as much money as possible in the process. It’s usually not worth paying extra for things like better rewards until you have good credit.

To find the right card, you should:

1. Compare credit card offers for people with no credit or bad credit.
2. Identify the cards with the lowest annual and monthly fees.
3. Use rewards as a tiebreaker to select the best card.

Most beginners should not worry about interest rates because it’s good to get in the habit of paying your bill in full monthly when you’re just starting out. This helps with budgeting, and interest doesn’t apply when you pay in full monthly.

Alternatively, you can use WalletHub’s CardAdvisor tool to quickly get some recommendations based on your answers to some simple questions. Or you can get even more sophisticated recommendations by signing up for a free WalletHub account.

Learn more about what to look for when comparing credit cards.

How Many Credit Cards Should I Have to Build Credit?

If you want to build credit, you should have at least one credit card account that reports to all three major credit bureaus each month. This will ensure information is being relayed to your credit reports, which builds your credit history. This will help your credit score if the information is positive, showing on-time payments and responsible spending, if you even use the card to make purchases.

How many credit cards you have beyond one depends on how you do with the first account, how organized you are, and how much hassle you want to deal with. Having multiple credit card accounts can help you save more money, thanks to rewards and features such as 0% introductory APRs, but there’s risk involved, too. You don’t want to rack up a bunch of expensive debt or miss payments and hurt your credit score.

Learn more about how many credit cards you should have to build credit.

How Long Does It Take to Build Credit With a Credit Card?

If you don’t already have a credit score, you should have one within 1-6 months of opening a new credit card account. From there, it will likely take a few years to build a consistently good credit score, and you will need to continue managing your credit responsibly to maintain such a score.

You can get a better sense of how long it will take you to build a good credit score by trying WalletHub’s free credit score simulator. A lot depends on the moves you make, after all.

Learn more about how long it takes to build credit with a credit card.