The 5 best credit cards for building credit in 2024

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Getting a credit card can be a smart move to establish or repair your credit.

While it can be challenging to get approved for a credit card with bad credit or no credit, it’s not impossible. While many top cards target those with good or excellent credit, some options are designed for people with poor or limited credit. This includes if you have a score below 580 or no score at all.

For the most part, secured credit cards offer the best chance of approval. They function similarly to regular credit cards but require a deposit as collateral.

There are also some unsecured cards available for those with low credit, as well as student credit cards tailored to young adults who want to build credit history while pursuing their studies.

Check out our top picks for the best credit cards to build credit — learn how they work and how to make the most of them.

The best credit cards to help you build credit

The best credit cards for rebuilding credit have no annual fee, report to all three credit bureaus, and offer the opportunity for credit limit increases. 

•  Best for earning rewards: Discover It® Secured Credit Card
• Best for high credit limit: OpenSky® Secured Visa® Credit Card
• Best for no security deposit: Chime Credit Builder Secured Visa® Credit Card
• Best unsecured card for rebuilding credit: Capital One Platinum Credit Card
• Best for flat-rate rewards: Bank of America® Unlimited Cash Rewards Secured Credit Card

Discover It® Secured Credit Card: Best for earning rewards

• Rewards: 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter), 1% on all other purchases
• Annual fee: $0
• Credit score needed: No credit history to limited credit history

The Discover It® Secured Credit Card is great for applicants with no credit history — there's no annual fee, and you don't need a credit score to apply.

Unlike other secured credit cards, the Discover It® Secured offers cash back on your spending. You can earn 2% cash back on the first $1,000 spent at gas stations and restaurants each quarter (then 1% back) and 1% on other purchases. On top of this, Discover will match all the cash back you’ve earned at the end of your first year.

Because this card is a secured credit card, you’ll have to make a minimum deposit of $200 to open the card. Cardholders may be able to get their deposit back and can upgrade to an unsecured card after seven months of on-time payments.

Discover will report your credit history with the three major credit bureaus.

OpenSky® Secured Visa® Credit Card: Best for high credit limits

• Rewards: None
• Annual fee: $35
• Credit score needed: No credit history to limited credit history

The OpenSky® Secured Visa® Credit Card doesn't require a credit check to apply. This means that you can still get this card even if you have no credit history or bad credit. Remember that you will need to make an initial $200 refundable cash deposit.

This card reports to all three major credit bureaus, helping users establish and improve their credit scores over time. While it doesn’t offer rewards, you can access a higher credit limit — up to $3,000 — if you make a larger deposit.

Keep in mind this card does have a $35 annual fee. While this isn’t very high, other secured card options carry no annual fee.

Chime Credit Builder Secured Visa® Credit Card: Best for no security deposit

• Rewards: None
• Annual fee: $0
• Credit score needed: No credit history to limited credit history

Unlike other secured cards, the Chime Credit Builder card doesn't require a refundable security deposit. Instead, you’ll deposit money into a Chime checking account, which serves as your credit limit.

This card has no annual fee and no credit check to get approved. And with no option to carry a balance, there are no interest charges, either. This makes it a good starter credit card for those who want to learn financial habits.

Like the other cards on this list, the Chime Credit Builder card reports your credit habits to the three credit bureaus. But keep in mind there’s no option to upgrade to an unsecured credit card.

Capital One Platinum Card: Best unsecured card for rebuilding credit

• Rewards: None
• Annual fee: $0
• Credit score needed: Fair credit (630-689)

The Capital One Platinum Card is an unsecured card targeted to consumers with fair credit (scores ranging from 580 to 669). It gives them access to a higher credit line, which can help keep credit utilization low.

This card has no annual fee and includes various tools to help customers stay on top of their credit. This includes CreditWise, a feature that lets cardholders track their score and receive alerts for any changes.

Remember that this card doesn’t offer any rewards, and its APR is higher than that of other unsecured cards. Despite this, it could still be a smart choice for those who prefer unsecured cards over secured credit cards.

Bank of America® Unlimited Cash Rewards Secured Credit Card: Best for flat-rate rewards

• Rewards: 1.5% cash back on all purchases
• Annual fee: $0
• Credit score needed: No credit history to limited credit history

The Bank of America® Unlimited Cash Rewards Secured card is designed for those looking to build or rebuild their credit history while earning cash rewards. You can enjoy the benefits of a secured credit card while earning unlimited 1.5% cash back on all spending. This card also offers a simple rewards program that doesn't require tracking categories.

This card has no annual fee but requires a $300 minimum security deposit. It reports your payment history to the three major credit bureaus.

Types of credit cards that can help you build credit

Several types of cards can help you build credit from scratch or rebuild a low credit score. Most cards fall into the following categories:

• Secured cards require a refundable cash deposit as collateral, which becomes the line of credit you can borrow against. These cards report to the credit bureaus over time, which can help you build credit with on-time payments and responsible use.
• Student cards approve applicants who are in college and have no credit history or minimal credit. These unsecured cards may or may not offer rewards and typically won’t charge an annual fee.
• Starter credit cards often won’t require a credit check and will approve most applicants. These secured cards report payments to the credit bureaus, which helps users improve their scores over time.
• Store credit cards, or retail cards, can often only be used at a specific store or retailer. They’re often easier to qualify for but have higher interest rates and limited rewards.

Secured cards vs. unsecured cards

Secured credit cards require you to put down a refundable cash deposit, usually $200-$500, which becomes your credit limit. This deposit reduces risk for the card issuer, making it easier to qualify for a secured card even with poor or limited credit. 

Unsecured credit cards, on the other hand, don't require a deposit. These cards can be harder to qualify for if you have bad credit, as the issuer is taking on more risk. But there are some unsecured cards designed for credit building.

Both types of cards can help you rebuild credit with responsible use — making on-time payments and keeping your balance low. Many secured cards even offer a path to upgrading to an unsecured card after a period of responsible use, usually 6-12 months. 

Finding the right credit card to build your credit score

Finding the right card can be hard with so many options available. Here are some tips to help you narrow down your choices:

1. Consider secured cards. Don't overlook secured cards that require collateral, says Lamine Zarrad, CEO of StellarFi. You can boost your score by keeping the card active and making timely monthly payments. Once your score improves, you can explore unsecured cards or those with better perks and rewards.

2. Decide if rewards are worth it. While some credit builder cards offer rewards for spending, they often come with high variable interest rates. If you carry a balance, these rates can negate the value of rewards. Only pursue rewards if you can consistently pay off your balance in full each month.

3. Review the interest rates. Be aware of the implications if you think you'll carry a balance. Ed Williams, senior lead planner at Facet Wealth, cautions that carrying a balance leads to interest charges. If you maintain a significant balance, the interest can accumulate and cost you more in the long term.

How to build credit with your credit card

To build credit effectively using a credit card, it's crucial to understand what goes into your score:

• Payment history: 35%
• Amounts owed: 30%
• Length of credit history: 15%
• New credit: 10%
• Credit mix: 10%

You often have the most control over your payment history and amounts owed, also known as your credit utilization ratio.

Erik Beguin, founder and CEO of Austin Capital Bank, emphasizes that building credit takes time. Since payment history carries the most weight in your score, the vital step is to avoid late payments at all costs.

It’s also essential to keep your credit balance as low as possible, ideally below 30% of your available credit limit, says David Johnson, CEO and founder of Vervent. Johnson advises budgeting wisely to pay your credit card bill in full or as close to it as possible every month.

Regularly monitor your credit report and identify any errors or early signs of identity theft. If you come across inaccurate information, you have the right to dispute it formally and have it removed.

Ways to build credit without a credit card

Credit cards are a popular tool for rebuilding credit, but they're not the only option. Two main alternatives are becoming an authorized user on someone else's credit card or getting a credit-builder loan.

• As an authorized user, you're added to someone else's credit card account and get your own card to use. The primary cardholder is responsible for payments, but the account's payment history is reported on your credit report as well. 
• A credit-builder loan is a small loan, usually $300-$1,000, designed to help you build credit. The loan amount is held in a savings account, and you make monthly payments to build a positive payment history. Once you've repaid the loan, you receive the money. 

The bottom line

Building credit with a credit card takes some discipline and focus. But, the process can work when you’re committed to keeping debt levels low and paying bills on time every month.

Even so, the type of credit-building card you use doesn't matter much. What does matter is how you use it.

Editorial disclaimer: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.