Best Credit-Building Credit Cards
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Whether you’re just starting with new credit or are trying to get a second chance and improve your poor credit, credit cards can help you build credit.
Not every credit card is right for everyone, of course, with features that may be helpful for some people but not others. We’ve compiled a list of the 10 best credit cards for building your credit score, whether you have no credit, a low credit score, great credit, or something in between.
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Overview of the best credit-building credit cards
Credit card | Best for |
|---|---|
Discover it Secured | Secured card |
Discover it Student Chrome | College students |
OpenSky Secured Visa | Unbanked with poor or no credit |
Capital One Platinum Secured Credit Card | Low deposit of $49 |
Petal 1 | High credit limit |
Citi® Secured Mastercard® | No annual fee |
Chime Credit Builder Secured Credit Builder Visa Card | Building credit for free |
AvantCard | Bad credit |
Upgrade Cash Rewards Card | Fair credit or higher |
Prosper Mastercard | No security deposit |
Join Over 4 Million Members Nationwide
- Borrow up to $40,000
- Receive money fast, upon approval
- Competitive fixed rates and fixed monthly payments
- No prepayment fees
- Automatic payment withdrawals
Best credit-building credit cards
No matter how great a credit card is at helping you build credit, your credit history is determined by how you use your credit. Making on-time payments, not just the minimum payment, and paying the card off in full each month are signs of responsible use and should help your credit score grow.
It also helps not to use all available credit on a card. This impacts your credit utilization ratio, which measures how much of the credit available to you that you’re using. Lenders typically prefer that you use no more than 30% of the total revolving credit available. For example, a $1,000 credit limit is only $300 in spending.
The cards we reviewed all have a variable APR, or annual percentage rate, except for Upgrade. Upgrade charges a fixed-rate APR that doesn’t change and is paid through a personal loan. With a variable rate, the interest rate you're charged for carrying a balance can change monthly. The APRs listed are accurate as of late June 2023.
Discover it Secured credit card
Discover It® Secured Credit Card
Card Name
Discover It® Secured Credit Card
APR
28.24%
Recommended Credit Score
N/A
Annual Fee
$0
Rewards Rate
Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Earn unlimited 1% cash back on all your other purchases automatically. 2x cash back with Cashback Match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
Why We Like It
- Credit-building credit card with limit you set with your deposit.
- Automatic review in 7 months to see if you can transition into an unsecured line of credit and return your deposit.
Discover it Student Chrome
Discover it® Student chrome
Credit Card Issuer
Discover
APR
18.24% - 27.24%
Annual Fee
$0
Intro Offer
0% intro APR for 6 months on purchases.
Rewards Rate
Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
Why We Like It
- Unlimited cashback match on all cash back you've earned at the end of the first year.
- Redeem for cash in any amount, any time. Even use your rewards to shop for whatever you need at Amazon.com or at millions of online stores with PayPal.
- Your cash back never expires.
OpenSky Secured Visa
OpenSky Secured Visa Credit Card
Card Name
OpenSky Secured Visa Credit Card
APR
25.64%
Annual Fee
$35
Why We Like It
- No credit check required
- Credit limit from as low as $200 and as high as $3,000
- Reports to all three credit bureaus
- 85% average approval rate
Capital One Platinum Secured Credit Card
Capital One Platinum Secured Credit Card
Card Name
Capital One Platinum Secured Credit Card
APR
29.99%
Recommended Credit Score
Limited, Bad
Annual Fee
$0
Special Offer
No annual or hidden fees.
Special Offer Terms
See if you're approved in seconds.
Rewards Rate
N/A
Terms
Why We Like It
- No annual or hidden fees.
- You could earn back your security deposit as a statement credit by making on-time payments.
- Be automatically considered for a higher credit line in as little as six months with no additional deposit needed.
- Monitor your credit score for free with CreditWise from Capital One.
Petal 1
Petal 1 "No Annual Fee" Visa® Credit Card
Card Name
Petal 1 "No Annual Fee" Visa® Credit Card
APR
28.49% – 35.74%
Recommended Credit Score
N/A
Annual Fee
$0
Why We Like It
- No security deposit required
- Bad and poor credit possible
- No annual fee
Card Details
Get a credit limit of $300 to $5,000 with $0 annual membership fee. You can earn 2% to 10% at select local and national merchants.
Citi® Secured Mastercard®
Citi® Secured Mastercard®
Card Name
Citi® Secured Mastercard®
APR
26.74%
Recommended Credit Score
Limited History, No Credit, New-to-Credit
Annual Fee
$0
Special Offer
N/A
Special Offer Terms
Rewards Rate
Why We Like It
- No annual fee.
Chime Credit Builder Secured Credit Builder Visa Card
Chime® Credit Builder Secured Credit Builder Visa® Card
Card Name
Chime® Credit Builder Secured Credit Builder Visa® Card
APR
29.99%
Recommended Credit Score
N/A
Annual Fee
$0
Rewards Rate
Credit Builder is a secured credit card. The money you move to the Credit Builder secured account is how much you can spend with the card. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account.
Why We Like It
- No annual fee or interest
- No credit check to apply
- No minimum security deposit required
AvantCard
AvantCard
Card Name
AvantCard
APR
29.24%–35.99%
Annual Fee
$0 - $59
Why We Like It
- Pre-qualification doesn't affect credit score
Card Details
No hidden fees, no hassle. Pay for what you need while building your credit with responsible use with credit limits ranging from $300 to $3,000.
Upgrade Cash Rewards Card
Upgrade Cash Rewards Card
Card Name
Upgrade Cash Rewards Card
APR
14.99% to 29.99%
Annual Fee
$0
Rewards Rate
1.5% cash back rewards on all purchases
Why We Like It
- No annual fees or late fees
- Pay down balances at a fixed rate and term
- Credit lines up to $25,000
Card Details
- No annual fee
- Credit lines from $500 to $25,000
Prosper Mastercard
Prosper Mastercard
Card Name
Prosper Mastercard
APR
24.24% to 35.24%
Recommended Credit Score
Welcomes less-than-perfect credit
Annual Fee
$0 for the first year with AutoPay
Why We Like It
- No security deposit required
- No ATM fees for cash withdrawals
- Get automatic reviews for credit line increases* and regular credit bureau reporting
Card Details
- Initial line of $500-$3,000 with automatic reviews for increases
- 50% of your credit line on approval and the rest when your card arrives
Join Over 4 Million Members Nationwide
- Borrow up to $40,000
- Receive money fast, upon approval
- Competitive fixed rates and fixed monthly payments
- No prepayment fees
- Automatic payment withdrawals
Best credit-building credit cards summary
Credit card | Annual fee | Credit limit | APR | Top rewards |
|---|---|---|---|---|
Discover it Secured | $0 | $200-$2,500 | 28.24% | 2% cash back on gas, restaurants |
Discover It Student Chrome | $0 | $500 | 18.24% - 27.24% | 2% cash back on gas, restaurants |
OpenSky Secured Visa | $0 or $35 | $200-$3,000 | 22.64% | None |
Capital One Platinum Secured Credit Card | $0 | $200-$1,000 | 29.99% | Deposit returned if payments on-time for 6 months |
Petal 1 | $0 | $300-$5,000 | 25.24% – 34.74% | 2-10% cash back at select merchants |
Citi® Secured Mastercard® | $0 | $200-$2,500 | 26.74% | None |
Chime Credit Builder Secured Credit Builder Visa Card | $0 | N/A | 0% | None |
AvantCard | $0-$59 | $300-$3,000 | 30.24% - 35.24% | None |
Upgrade Cash Rewards Card | $0 | $500-$25,000 | 14.99% - 29.99% | 1.5% cash back |
Prosper Mastercard | $0 in 1st year, then $39 | $500-$3,000 | 24.24% to 35.24% | None |
FAQs
Will applying for a credit card affect my credit score?
No, it won’t if the credit card company is doing a “soft pull” of your credit report in a prequalification application. The company’s website or credit card offers should say if your credit score will be affected by applying. Some cards don’t check your creditworthiness at all. In the early application stages, you’ll be asked for some identifying information so the creditor can check if you qualify and what interest rate and credit line you’ll be offered. This shouldn’t affect your credit score. If you accept the offer and decide to open a credit card, the company will likely do a “hard pull” on your credit, and the newly approved credit card will be added to your credit profile and may lower your credit score slightly.
How long should I keep a secured credit card?
By paying off your balance by the due date each month and other good credit card habits, you should be able to see your credit score increase within a year. Most secured credit cards we reviewed don’t have annual fees, so there’s no need to get a secured card that charges one. But your credit limit will start at whatever your security deposit is, which usually starts at $200. If you’d rather have that money in your pocket instead of sitting at a credit card company and not earning interest, you may want to graduate with an unsecured card without an annual fee in a year or less. Most cards review your status after six months, which will raise your credit limit if you’ve made your monthly payments on time. Getting a higher credit limit can signify that you’re ready to get an unsecured card.
Will my secured card have the word “secured” on it?
No, it shouldn’t. That word can carry a little stigma to it, and you may not want a cashier or server to know that you’re paying with a secured credit card. Your secured card should look like any other credit card. If you want to make sure it will ask the company’s customer service representative if it won’t have “secured” on the card.
Does my security deposit cover the monthly payments for charges I make?
No. The minimum monthly payment must be made on any charges you make with a credit card, whether it’s a secured card or not. The security deposit is only withdrawn from your account when you don’t make payments, which may lower your credit score.
Why you should (or shouldn’t) use credit-building credit cards
Still unsure about getting a credit-building credit card? Here are some advantages and disadvantages to consider.
Use credit-building credit cards if…
- You want to raise your credit score: If you have bad credit and are unlikely to be approved elsewhere, credit-building credit cards are a good way to raise your credit score over time if used responsibly.
- You can afford a security deposit: A $200 security deposit is normal to get a secured credit card. The money is used if you don’t make a payment. Otherwise, you can often get it back in 6-12 months with on-time payments.
- You only need the card for one year: Unsecured credit-building cards often come with an annual fee. If you pay your bill on time then you should be able to move to a no-fee unsecured card within a year.
- You won’t carry a balance: If your creditworthiness is low because you have bad credit, you may still qualify for a credit card, but you’ll likely be charged the highest APR that the card has. You can avoid interest charges by not carrying a balance from month to month.
Don’t use credit-building credit cards if…
- You plan on using the card a lot: Low credit limits, high interest rates, and late fees can make using a credit-building card an expensive habit, especially if you carry a balance. It’s best to use it for purchases you know you can afford to pay off completely each month and on time.
- You need them for cash: Some credit cards we reviewed can be used for cash advances at ATMs. This can be enticing but expensive, with an APR near 35%.
- You have good credit: Credit-building credit cards usually have high interest rates near 30% APR. If you have good credit and qualify for a better credit card, you’ll likely be charged a lower interest rate. Still, a credit-building card may be right for you if you have good credit that has been dropping lately and you need to start some good payment habits with a new card.
Join Over 4 Million Members Nationwide
- Borrow up to $40,000
- Receive money fast, upon approval
- Competitive fixed rates and fixed monthly payments
- No prepayment fees
- Automatic payment withdrawals
The bottom line
Poor credit can lead to higher credit charges, including higher interest rates on home and auto loans, and make renting difficult. A credit-building credit card can be a good way to raise your credit score by using the card responsibly and only charging what you can afford to pay when the credit card bill comes due. In time, your score should improve, and you should be able to move on to a card with better terms.
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Writer
Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.
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