Credit Cards to Build Credit: Your credit score plays a huge role in your financial future. Whether you’re applying for a loan, renting an apartment, or even getting a new job, your credit history can be a determining factor. But how do you start building credit if you have little to no history? One of the best ways is by using a credit card responsibly.
Credit cards, when used wisely, can help establish and improve your credit score over time. They provide a simple yet effective way to prove your ability to manage debt, make on-time payments, and handle financial responsibilities.
In this guide, we’ll explore the best credit cards to build credit, how to use them effectively, and mistakes to avoid along the way.
How Credit Cards Help Build Credit
Before diving into which credit cards to choose, it’s important to understand how they impact your credit score. Your credit score is determined by five main factors:
- Payment History (35%) – Paying your credit card bill on time is crucial. Late payments can severely impact your score.
- Credit Utilization (30%) – This refers to how much of your available credit you use. Ideally, you should keep this below 30%.
- Length of Credit History (15%) – The longer you have a credit account open, the better it is for your score.
- New Credit (10%) – Opening too many accounts in a short period can lower your score.
- Credit Mix (10%) – Having different types of credit (loans, credit cards, etc.) can help your score.
When you use a credit card responsibly by making on-time payments and keeping your balance low, you gradually improve these factors, leading to a better credit score.
Choosing the Right Credit Card to Build Credit
Not all credit cards are created equal—especially when you’re just starting out. The best credit cards for building credit typically fall into two categories: secured credit cards and unsecured credit cards for beginners.
Secured Credit Cards
Secured credit cards are one of the best tools for people with no credit or bad credit. They require a security deposit, which acts as collateral and sets your credit limit. Here’s how they work:
- You deposit a refundable amount (e.g., $200–$500), which becomes your credit limit.
- You use the card like a regular credit card and make payments on time.
- After months of responsible use, you may qualify for an upgrade to an unsecured card.
Pros of secured credit cards:
+ Easier approval for those with no or poor credit
+ Helps establish credit history
+ Some issuers offer graduation to unsecured cards
Cons of secured credit cards:
* Requires an upfront deposit
* Usually has lower credit limits
Best secured credit cards for building credit:
- Discover it® Secured – Offers cashback rewards and a path to upgrade.
- Capital One Platinum Secured – Allows you to increase your credit limit over time.
- Citi® Secured Mastercard® – Great for international use with no annual fee.
Unsecured Credit Cards for Beginners
Unsecured credit cards don’t require a deposit, but they usually come with stricter approval requirements. However, some beginner-friendly options cater to those with limited or no credit history.
Pros of unsecured credit cards for beginners:
+ No security deposit required
+ Can offer higher credit limits over time
+ Some include rewards and cashback benefits
Cons:
* Harder to qualify for with no credit history
* Might have higher interest rates
Best unsecured credit cards for beginners:
- Capital One QuicksilverOne – Cashback rewards with a relatively easy approval process.
- Petal® 2 “Cash Back, No Fees” Visa® Credit Card – No annual fees and reports to all three major credit bureaus.
- Chase Freedom® Student Credit Card – Specifically designed for students looking to build credit.
Responsible Credit Card Usage
Getting a credit card is just the first step. To truly build credit, you must use it wisely. Here are some best practices:
- Always pay on time – Late payments hurt your score significantly.
- Keep your balance low – Aim to use less than 30% of your available credit.
- Avoid carrying a balance – Paying in full each month prevents interest charges.
- Don’t apply for too many cards at once – Each application results in a hard inquiry, which can temporarily lower your score.
By following these steps, you’ll not only build a solid credit history but also set yourself up for better financial opportunities in the future.
Best Practices to Improve Credit Score with a Credit Card
Using a credit card wisely is the key to boosting your credit score. Here are some best practices to help you get the most out of your credit card while building a strong credit history:
Set Up Autopay for Bills
One of the biggest factors affecting your credit score is payment history. Even a single missed payment can significantly damage your credit. To avoid this, set up autopay for at least the minimum payment each month. This ensures you never miss a due date and consistently build positive credit history.
Keep Your Credit Utilization Low
Credit utilization—the percentage of your credit limit that you use—should ideally be below 30%. For example, if your credit limit is $1,000, try not to use more than $300 at any given time. Keeping a low balance shows lenders that you’re responsible with credit and not reliant on borrowing.
Keep Old Credit Accounts Open
The length of your credit history plays an important role in your score. Even if you don’t use an old credit card often, keeping the account open can help maintain a long credit history. If you close an old account, it shortens your average account age, which can negatively impact your score.
Manage Multiple Credit Accounts Wisely
Once you’ve successfully managed one credit card, you might consider opening another to further build your credit. However, don’t open too many at once, as multiple hard inquiries can lower your score. Instead, space out applications and focus on responsible usage.
Common Mistakes to Avoid When Using a Credit Card to Build Credit
Even with the best intentions, many people make mistakes that end up hurting their credit instead of helping it. Here are some common pitfalls to avoid:
Late Payments and Their Impact
A single late payment can remain on your credit report for up to seven years. This can significantly reduce your score and make it harder to get approved for future credit. If you ever miss a payment, try to pay it as soon as possible and contact your issuer to see if they can waive any fees.
Carrying a High Balance
Many people believe that carrying a balance on their credit card helps build credit. This is a myth. Carrying a high balance increases your credit utilization, which can actually hurt your credit score. Always aim to pay off your balance in full to avoid interest charges and maintain a healthy credit score.
Applying for Multiple Credit Cards at Once
Each time you apply for a new credit card, the issuer conducts a hard inquiry, which can temporarily lower your credit score. Applying for too many credit cards at once can make you look risky to lenders. Space out applications and only apply for cards that match your credit profile.
Best Credit Cards to Build Credit
If you’re looking to build credit, some credit cards are better suited for the job than others. Here are some of the top credit cards for credit-building in 2024:
Top Secured Credit Cards
- Discover it® Secured – Offers cashback rewards and a path to upgrade to an unsecured card.
- Capital One Platinum Secured – Requires a low deposit and has no annual fee.
- Citi® Secured Mastercard® – Great for building credit with responsible use.
Best Beginner-Friendly Unsecured Credit Cards
- Petal® 2 “Cash Back, No Fees” Visa® – No fees and reports to all three credit bureaus.
- Capital One Platinum Credit Card – A solid choice for those with limited credit history.
- Chase Freedom® Student Credit Card – Ideal for students looking to build credit.
Credit Cards with No Annual Fees
- Discover it® Student Cash Back – Offers cashback and no annual fee.
- Bank of America® Customized Cash Rewards – Great for earning rewards with no annual cost.
- Petal® 1 Visa® Credit Card – Designed for those new to credit, with no fees.
Student Credit Cards: A Great Option for Young Adults
If you’re a student, getting a student credit card can be a great way to start building your credit early. These cards are specifically designed for young adults with little to no credit history.
Benefits of Student Credit Cards
+ Easier Approval – Designed for students with no prior credit history.
+ Lower Credit Limits – Helps prevent overspending and debt accumulation.
+ Rewards and Perks – Many offer cashback, sign-up bonuses, and discounts.
Best Student Credit Cards Available
- Discover it® Student Cash Back – 5% cashback on rotating categories.
- Chase Freedom® Student Credit Card – No annual fee and a $50 bonus after first purchase.
- Capital One SavorOne Student Cash Rewards – Earns rewards on dining and entertainment.
Tips for Students to Manage Credit Wisely
- Use your card for small, regular purchases like groceries or gas.
- Always pay your balance in full each month to avoid interest charges.
- Set up alerts and reminders to avoid missing due dates.
Retail and Store Credit Cards: Are They Worth It
Retail store credit cards are tempting, especially when stores offer discounts for signing up. But are they really a good option for building credit?
Pros of Store Credit Cards
+ Easier Approval – Many retail credit cards have lower approval requirements.
+ Exclusive Discounts – You can save money on store purchases.
+ Can Help Build Credit – If used responsibly, store cards report to credit bureaus.
Cons of Store Credit Cards
* High Interest Rates – Many store cards have APRs above 25%.
* Limited Use – Some store cards can only be used at specific retailers.
* Lower Credit Limits – These cards often have low limits, increasing utilization.
Best Retail Credit Cards for Building Credit
- Amazon Prime Rewards Visa Signature – Great for Amazon shoppers.
- Target RedCard™ Credit Card – Offers 5% off Target purchases.
- Best Buy® Credit Card – Financing options for electronics.
Credit Cards for People with No Credit History
If you have no credit history, you may have difficulty getting approved for a traditional credit card. Fortunately, there are options available:
Best Starter Credit Cards
- Capital One Platinum Credit Card – No annual fee and helps build credit.
- Petal® 2 Visa® Credit Card – No fees and no prior credit history required.
- Discover it® Secured – Best for earning rewards while building credit.
How to Qualify Without a Credit History
- Consider getting a secured credit card with a deposit.
- Become an authorized user on a family member’s credit card.
- Use a credit-builder loan to establish credit.
How Long Does It Take to Build Credit with a Credit Card
Building credit takes time, but with responsible use, you can start seeing improvements within a few months. The exact timeline depends on various factors.
Factors That Influence Credit-Building Speed
Several factors determine how quickly your credit score improves:
- Starting Point – If you have no credit history, it may take longer to establish a score.
- Payment History – Making on-time payments every month builds credit faster.
- Credit Utilization – Keeping your balance low helps improve your score more quickly.
- Length of Credit History – The longer you maintain your account, the better.
- Number of Credit Inquiries – Applying for too many credit cards at once can slow progress.
Estimated Timeline for Different Scenarios
- New credit users – Expect to establish a fair credit score (around 650–700) in 6–12 months.
- Rebuilding credit after damage – If you have bad credit, it can take 12–24 months to see significant improvement.
- Building excellent credit – Getting a 750+ score may take 3–5 years of responsible credit usage.
Steps to Speed Up the Process
To accelerate your credit-building journey:
+ Make at least the minimum payment on time every month
+ Keep your credit utilization below 30%
+ Avoid unnecessary hard inquiries on your credit report
+ Keep old credit accounts open to lengthen credit history
Myths About Using Credit Cards to Build Credit
There are many misconceptions about how credit cards impact your credit score. Let’s debunk some of the most common myths:
Myth: You Must Carry a Balance to Build Credit
Reality: Paying your balance in full each month is actually the best way to build credit. Carrying a balance only leads to unnecessary interest charges.
Myth: Closing Old Credit Cards Improves Your Score
Reality: Closing an old credit account can hurt your score by shortening your credit history and increasing your utilization ratio.
Myth: Applying for Multiple Credit Cards Boosts Your Credit Score
Reality: Applying for multiple credit cards in a short period results in hard inquiries, which can lower your score. It’s best to apply for credit strategically.
Myth: Checking Your Credit Score Hurts Your Credit
Reality: Checking your own credit score is considered a soft inquiry and does not affect your score. However, a lender checking your score for approval is a hard inquiry, which can temporarily lower your score.
Alternative Ways to Build Credit Without a Credit Card
While credit cards are a great tool, they’re not the only way to build credit. Here are some alternative options:
Credit-Builder Loans
- Offered by credit unions and online lenders.
- Works by making small monthly payments, which get reported to credit bureaus.
- At the end of the loan term, you get your money back (minus interest).
Rent Reporting Services
- Some services allow you to report your rent payments to credit bureaus.
- Examples include Experian Boost, Rental Kharma, and RentTrack.
- This helps build credit if you don’t want to open a credit card.
Becoming an Authorized User
- If a friend or family member with good credit adds you as an authorized user on their card, their positive payment history can help boost your credit.
- You don’t even have to use the card—just being listed can help improve your score.
FAQs About Credit Cards to Build Credit
1. How do credit cards help build credit?
Credit cards help build credit by reporting your payment history to credit bureaus. By making on-time payments and keeping your credit utilization low, you can improve your credit score over time.
2. What type of credit card should I use to build credit?
A secured credit card or a student credit card is often a good choice for building credit. These cards are designed for individuals with little to no credit history and can help establish a positive credit record.
3. How long does it take to build credit with a credit card?
It typically takes a few months of responsible usage to see improvements in your credit score. However, building a strong credit history can take several years.
4. Can I build credit without a credit card?
Yes, you can build credit through alternative methods such as credit-builder loans, rent reporting services, and becoming an authorized user on someone else’s credit card.
5. What happens if I miss a payment?
Missing a payment can hurt your credit score and may lead to late fees or higher interest rates. It’s best to set up automatic payments or reminders to ensure on-time payments.
6. How much should I spend on my credit card to build credit?
It’s recommended to keep your credit utilization below 30% of your total credit limit. Ideally, using less than 10% can have an even more positive impact on your credit score.
7. Should I apply for multiple credit cards to build credit faster?
Opening too many credit cards at once can negatively impact your credit score. It’s best to start with one card, use it responsibly, and gradually expand your credit profile over time.
Conclusion
Building credit with a credit card is a smart financial move, but it requires responsibility. By choosing the right credit card, making timely payments, and keeping your balance low, you can steadily improve your credit score.
Remember:
+ Always pay your bill on time
+ Keep your credit utilization low
+ Don’t apply for too many cards at once
+ Be patient—credit building takes time
A good credit score opens doors to better financial opportunities, such as lower interest rates on loans, higher credit limits, and easier approvals for housing and other services. Take small, consistent steps today, and your credit will thank you in the future!
