Best credit cards to build credit for October 2024 #CashNews.co

Building your credit history is essential to qualifying for various credit opportunities that can help you reach your financial goals. But how can you be eligible for a credit card if you have limited credit, poor credit, or no credit history?

Fortunately, there are credit cards with less strict eligibility requirements that can help you start building credit.

The best credit card to build credit for you depends on your unique situation and goals — for example, a student credit card could be the perfect fit if you’re in school — but some of our top recommendations include the Chase Freedom Rise℠, Petal® 2 Visa® Credit Card, and Discover it® Secured Credit Card.

Best credit cards to build credit for October 2024

Upgrade path: Your account is automatically evaluated yearly to see if you can upgrade to a Chase Freedom Unlimited card. To qualify for an upgrade, you must have:

• An open Freedom Rise account

• Purchased something using your Freedom Rise card in the past 12 months

• Made on-time payments to all lenders in the past 12 months

• No suspended Chase accounts

In addition to this upgrade opportunity, responsibly using your Freedom Rise card could also help you qualify for other Chase credit cards.

Why we like this card for beginners: The Chase Freedom Rise provides an excellent introduction to credit cards with its $0 annual fee and simple rewards rate.

In addition, there’s a special offer for Chase banking customers: If you have at least $250 in Chase checking or savings accounts, you receive increased approval odds for the Chase Freedom Rise.

All information about Chase Freedom Rise has been collected independently by Yahoo Finance. Chase Freedom Rise is no longer available through Yahoo Finance.

Upgrade path: There’s no official upgrade path for the Petal 2 Visa, but responsible use could help you qualify for better rewards credit cards.

Why we like this card: The Petal 2 Visa doesn’t require a security deposit and there’s no credit check needed to see if you’re pre-approved. With this card, you don’t have to worry about an annual, late, foreign transaction, or returned payment fee. You can earn a credit line increase in as little as six months by making qualifying on-time payments.

Upgrade path: Discover starts automatic monthly account reviews after seven months to see if you’re eligible to upgrade to an unsecured credit card and get your security deposit back.

Why we like this card for earning cash back: Most other cards on this list don’t provide a welcome offer, but the Discover it Secured Credit Card gives an unlimited dollar-for-dollar cash-back match at the end of your first year. That means if you earn $200 in cash back your first year, you’ll receive an additional $200 (for $400 total) from Discover.

Because of these generous welcome offers and excellent rewards rates, you can typically find Discover cards on lists of the best cash-back credit cards.

Upgrade path: There’s no official upgrade path for the Chime Secured Credit Builder*. However, regularly using your card and making on-time payments could help you qualify for a better credit card.

Why we like this card: The Chime Secured Credit Builder doesn’t require a credit check to apply, which could be helpful if you have a limited credit history or bad credit. You still have to put down a security deposit, but there’s no minimum required amount. That’s different from most secured credit cards, which require a minimum deposit of $200 to $300.

Note that you must open (or already have) a Chime Checking Account with qualifying direct deposit to apply for the Chime Secured Credit Builder.

Upgrade path: You could earn your security deposit back and upgrade to an unsecured Quicksilver card with responsible use.

Why we like this card for earning simple rewards: The Capital One Quicksilver Secured Cash Rewards has a straightforward earning rate of 1.5% cash back on all eligible purchases. That means you don’t have to worry about different spending categories or rates, making it easy to use one card for everything.

Upgrade path: Navy Federal will start monthly reviews after six months to see if you’re eligible for an upgrade to a Navy Federal cashRewards Credit Card.

Why we like this card for military members: You must be a Navy Federal Credit Union member to apply for the nRewards Secured Card. You can typically join the Navy Federal Credit Union if you have ties to the U.S. armed forces, Department of Defense, or National Guard.

If you’re already a member or eligible to join, the nRewards Secured Card is an excellent option for building or rebuilding your credit history. There’s no annual fee and a simple rewards rate, and your credit activity is reported to the major credit bureaus.

Upgrade path: You may automatically graduate to a U.S. Bank Altitude Go Visa Signature Card and have your security deposit returned with responsible card usage.

Why we like this card for earning everyday rewards: Few secured credit cards provide better rewards on everyday purchases than the U.S. Bank Altitude Go Secured Visa. In fact, many unsecured cards can’t match this card’s earning potential.

That includes earning 4x points on dining, takeout, and restaurant delivery, as well as 2x points on streaming services, grocery stores, and at gas stations and EV charging stations. The 4x earning rate is the real winner here (especially for foodies), but the 2x rate is great for other common expenses.

Upgrade path: You may qualify to have your security deposit returned based on periodic Bank of America account reviews.

Why we like this card: Secured credit cards require security deposits that typically equal your available credit limit. That means if you put down a $1,000 security deposit, you could have a $1,000 credit limit.

The issue with many secured cards is that they tend to have low security deposits, which means you don’t get much of a credit line. That could be problematic for actually using your card to make purchases. And it’s easier to have a high credit utilization ratio with a low credit limit, which could impact your credit score.

With the Bank of America Unlimited Cash Rewards Secured, you can deposit up to $5,000, giving you plenty of credit to work with.

More top credit-building cards to consider

The U.S. Bank Cash+ Secured Visa has a $0 annual fee and an excellent rewards rate. It reports your card activity to the three major credit bureaus, allowing you to build your credit history over time. With responsible use, you could automatically graduate to a U.S. Bank Cash+® Visa Signature® Card and have your security deposit returned.

The Bank of America Customized Cash Rewards Secured makes sense if you want a secured card with a customizable earning rate. Note that there’s an earning cap of $2,500 in combined purchases each quarter in the 3% and 2% categories.

With this card, Bank of America conducts periodic account reviews to see if you qualify to have your security deposit returned.

If you’re a small business owner looking to build your business credit, consider the Bank of America Business Advantage Unlimited Cash Rewards Secured Business Credit Card.

This card has a $0 annual fee and earns 1.5% cash back on all eligible purchases. If you responsibly use your card and your credit history improves, Bank of America could transition you to an unsecured version (where your security deposit is returned) based on its periodic account reviews.

Student credit cards to consider

The best student credit cards provide excellent options for students just starting their credit-building journey. Here are some cards to consider if you’re a student and want to build your credit:

The Capital One SavorOne Rewards for Students is a powerful student rewards card. It has a $0 annual fee and provides a one-time $50 cash bonus if you spend $100 within three months of opening an account.

However, we think the primary benefit of the Capital One SavorOne Rewards for Students (other than building their credit history) is the ability to earn elevated rewards in common student spending categories. You can earn an unlimited 3% cash back on dining, entertainment, popular streaming services, and groceries, plus 1% on all other eligible purchases.

The Bank of America Travel Rewards for Students is a travel credit card with a $0 annual fee and no foreign transaction fees. This card provides unlimited 1.5x points on all eligible purchases, making it an excellent option for everyday student purchases.

Since this is a travel card, the Bank of America Travel Rewards for Students makes sense for students who like to travel and/or plan to study abroad.

The Discover it Student Cash Back has no annual fee and doesn’t require a credit score to apply.

As a new cardholder, you receive an automatic dollar-for-dollar cash-back match at the end of your first year. You can also earn 5% cash back on everyday rotating categories (up to a quarterly maximum) when you activate the earning offer.

We recommend the Discover it Student Cash Back if you want to earn valuable cash back while building your credit.

Pros and cons of credit-building credit cards

Pros

• Might not have strict eligibility requirements

• Could help you build your credit history

• Could provide an upgrade path to a better card

• Typically works like any other credit card

Cons

• Could require a security deposit

• Might have fewer rewards and benefits

• Might have a lower credit limit

How to choose a credit card for building credit

• Annual fee: Credit cards with annual fees could be worth it to help you build credit. However, it’s worth considering no-annual-fee cards first because there are plenty of available options.

• Security deposit: Secured credit cards provide accessible ways to improve your credit with limited or no credit history, but they require a security deposit. Unsecured cards don’t have the deposit requirement but could have more strict eligibility requirements.

• Credit check: When you apply for a credit card, most credit card companies check your credit history with a hard inquiry to determine your creditworthiness. This is often the case even if it’s a card designed for beginners. If you don’t want a hard inquiry, there are some cards available (like the Chime Secured Credit Builder Visa) that don’t require a credit check.

• Credit reporting: When comparing cards, consider only cards that report your credit activity to the major credit bureaus (Experian, Equifax, and TransUnion). Otherwise, using a card won’t help you build your credit.

• Perks and rewards: Your primary personal finance goal might be to build your credit history, but it doesn’t hurt to earn some cash back, points, or miles with a rewards credit card at the same time.

• Upgrade path: Many cards that can help you build credit have clear upgrade paths that their card issuers provide. This could be useful for graduating to a better card with more benefits. But remember that you can always create your own upgrade path by building enough credit history and qualifying for more credit products.

Frequently asked questions (FAQs) for credit-building cards

What credit card increases your credit score the most?

Secured credit cards are ideal tools for helping build or rebuild your credit history. They require an up-front deposit, often equal to your credit limit, but they can be used like any other credit card. If your card issuer reports card activity to major credit bureaus, a secured card could help improve your credit score with responsible use.

What builds your credit score the most?

Making on-time payments is the most crucial factor for improving your credit score. Your payment history accounts for about 35% of your FICO Score, so avoiding missing or making late payments is essential. Missing one payment could significantly impact your score, possibly dropping it 100 points or more.

What’s the most a credit score can go up in a month?

There’s no set limit for how much you can increase your credit score in a month, though it often takes months or even years to see significant improvement. However, depending on your actions, you could see a positive impact in as little as 30 to 45 days. Important factors include your payment history, length of credit history, and credit utilization ratio.

*More Chime card details:

• No Interest: Out-of-network ATM withdrawal and OTC advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer.

• No Minimum Security Deposit: Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

• The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.

• To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

• Safer Credit Building – On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

This article was edited by Rebecca McCracken

Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.