Erika's Picks for Best Credit-Building Cards
- Best for no security deposit:
Chime Credit Builder Secured Visa® Credit Card - Best for low security deposit:
Capital One Platinum Secured Credit Card - Best for earning rewards:
Capital One Quicksilver Secured Cash Rewards Credit Card - Best welcome offer:
Discover it® Secured Credit Card - Best for no credit check:
OpenSky® Plus Secured Visa® Credit Card
Credit cards are an important part of your finances, but not everyone can get one. You need to have good credit to get approved — but if you're young and just getting started, you may have no credit to report. Or maybe you've made a few mistakes and damaged your credit score.
Regardless of your situation, don't worry. There are credit cards designed to help you build credit, without digging you into credit card debt.
These cards will report your payments to the credit bureaus, and the best ones have minimal fees and moderate interest rates. Plus, some provide educational resources to help you better understand your finances.
Best for No Security Deposit
Chime Credit Builder Secured Visa® Credit Card
Rewards Rate
- None
Welcome Offer
None
Annual Fee
$0
Minimum security deposit
$0
The Chime Credit Builder Secured Visa® Credit Card doesn’t charge interest1 and you won’t have to put a minimum security deposit down to open an account.
Instead, you need to have a Chime® Checking account. You’ll move funds into a secured account, which creates your spending limit.2 This prevents you from overspending, allowing you to build credit responsibly. Chime will report your payments to the credit bureaus.
Other benefits include:
- No annual fee
- No foreign transaction fees
- $200 buffer if you go over your spending limit3
- Visa Zero Liability4 and fraud protection
- Auto-payment option to avoid missing payments
While the Chime secured card is a good way to build credit, the card has some drawbacks. Since it’s linked to your Chime Checking, this limits how much you can spend with your card.
As well, because your limit is based on your account balance, on-time payments will be reported to the credit bureaus, but not your credit utilization. You also won’t find any rewards with the card, either.
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A.
1 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.
2 Money added to Credit Builder will be held in a secured deposit account as collateral for your Credit Builder Visa card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
3 SpotMe® on Credit Builder is an optional, no interest / no fee overdraft line of credit tied to the Secured Deposit Account available to qualifying members with an active Chime Credit Builder Account. To qualify for the SpotMe on Credit Builder service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your physical secured Chime Credit Builder Visa® Credit Card or Chime Visa® Debit Card. Qualifying members will be allowed to overdraw their Secured Deposit Account up to $20, but may later be eligible for a higher limit of up to $200 or more based on Chime account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Credit Builder Limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s or its banking partners’ discretion. Although Chime does not charge any overdraft fees for SpotMe on Credit Builder, there may be out-of-network or third-party fees associated with ATM transactions and fees associated with OTC cash withdrawals. SpotMe on Credit Builder won’t cover non-card transactions.
4 Disclosure: You must notify your financial institution immediately of any unauthorized use. For specific restrictions, limitations and other details, please consult your issuer.
The Chime Credit Builder Secured Visa® Credit Card is a no-frills way to build credit for beginners. The card doesn’t come with any fees, and because it’s tied to a Chime® Checking account, you won’t rack up interest.1
It’s a good option for building credit without having to put a security deposit down first.2
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A.
1 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.
2 Money added to Credit Builder will be held in a secured deposit account as collateral for your Credit Builder Visa card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
Best for Low Security Deposit
Capital One Platinum Secured Credit Card
Rewards Rate
- None
Welcome Offer
None
Annual Fee
$0
Minimum security deposit
$49
The Capital One Platinum Secured Credit Card has a low security deposit that allows you to rebuild your credit. Depending on your credit, you can access a $200 line of credit with a $49, $99, or $200 deposit. The lower deposit options make the card more accessible than other cards that require a full deposit.
There is no annual fee, and if you make on-time payments for six months, Capital One may increase your credit limit without a higher deposit or upgrade you to an unsecured card. Keeping your credit utilization down can help you boost your score.
Because the card is through Capital One, here are some perks you’ll receive:
- No foreign transaction fee
- Free CreditWise access to track your score
- Autopay
- $0 fraud liability
- Emergency card replacement
However, unlike other Capital One cards, this one doesn’t come with cashback or rewards
The Capital One Platinum Secured Credit Card is an accessible secured credit card with a low security deposit, no annual fee, and no hidden transaction fees.
You’ll also get access to some of Capital One’s other features, like $0 fraud liability and credit monitoring through CreditWise.
Plus, you can upgrade to an unsecured card after consistent on-time payments, eventually working your way up to more premium Capital One cards that offer better perks.
Best for Earning Rewards
Capital One Quicksilver Secured Cash Rewards Credit Card
Rewards Rate
- 5% cashback on hotel and rental car bookings through Capital One Travel
- 1.5% cashback on every purchase
Welcome Offer
None
Annual Fee
$0
Minimum security deposit
$200
The Capital One Quicksilver Secured Cash Rewards Credit Card is a secured credit card that helps you build credit while also allowing you to earn rewards — something not many credit-builder cards offer.
You’ll have to put down a refundable $200 deposit to open an account. Then, if you make consistent, on-time payments for six months, Capital One may boost your credit limit without an added deposit.
Some other benefits include:
- No annual fee
- No foreign transaction fees
- Free CreditWise to check your score
- $0 fraud liability
Just remember to pay off your balance each month to avoid getting hit with interest. And while the cashback reward is nice, keep in mind that it’s lower than you’d get with unsecured cards.
It's rare for credit-building cards to earn rewards, so the Capital One Quicksilver Secured Cash Rewards Credit Card is pretty unique. And it doesn't charge an annual fee.
The card starts with a $200 minimum deposit, but you can deposit more and after six months, you'll also be automatically considered for a higher credit limit.
As well, you'll get access to CreditWise from Capital One. With this, you'll have access to your credit score at any time. You'll also get alerts when there are changes to your TransUnion or Experian credit reports. This will help you to monitor your information and keep a close eye on your credit.
If you make consistent on-time payments, you can use the card as a stepping stone to a higher cashback reward card later on.
Best for Welcome Offer
Discover it® Secured Credit Card
Rewards Rate
- 2% cashback at gas stations and restaurants (on up to $1,000 in combined purchases each quarter, then 1%)
- 1% on all other purchases
Welcome Offer
Discover will match all cashback earned at the end of your first year
Annual Fee
$0
Minimum security deposit
$200
Not many credit-builder cards have a welcome offer, but the Discover it® Secured Credit Card does. It also comes with cashback rewards, which makes it unique among this type of card.
Discover’s Cashback Match allows you to double whatever you earn in rewards during your first year without a limit. So, if you earn $100 in rewards, you’ll get $200 back.
To open an account, you’ll need to put down a refundable $200 deposit.
Some other benefits include:
- No annual fee
- No foreign transaction fees
- Free FICO Score tracking
- Auto-review after seven months to upgrade to an unsecured card
- $0 fraud liability
- 24/7 U.S.-based customer support
While Discover’s benefits are quite good for a credit-building card, it has its downsides. Discover isn’t as widely accepted as Visa and Mastercard, so you might not be able to use your credit for every purchase, limiting how much cashback you can earn.
The 2% category is also capped at $1,000 per quarter — if you hit the limit, the cashback reward will drop to 1%.
Discover offers one of the best rewards programs for entry-level credit cards, including with its Discover it® Secured Credit Card. Even if you don’t have a credit history, you can still earn cashback on purchases and qualify for Discover’s first-year cashback match bonus.
Discover also gives you a pathway to graduate to an unsecured credit card. After seven months, Discover will review your progress. If you qualify, they’ll upgrade you to an unsecured credit card.
Best for No Credit Check
OpenSky® Plus Secured Visa® Credit Card
Rewards Rate
- Up to 10% cashback at participating vendors
Welcome Offer
None
Annual Fee
$0
Minimum security deposit
$300
The OpenSky® Plus Secured Visa® Credit Card is a very accessible starter card, since you can apply without a credit check and there’s no annual fee. All you have to do is put down a $300 refundable deposit to open an account and be able to make a monthly minimum payment of $25.
Unlike some secured cards, you won’t need to link a bank account, making it a good option for unbanked customers who want to build credit on their own.
The card reports to all three major bureaus, so if you don’t carry a balance and make consistent, on-time payments, it can help you boost your score.
The card also offers up to 10% cashback with OpenSky Rewards. When you use the card at participating vendors (listed on the OpenSky Rewards website), cashback is automatically applied to your statement. However, the program details are a bit vague and don't say who those vendors might be.
Also, unlike other secured cards, there isn’t a path to upgrade to an unsecured card. Once your credit is built, you’ll have to apply for an upgraded credit card on your own.
The OpenSky® Plus Secured Visa® Credit Card is a good option if you’re starting from scratch and don’t have any credit to report.
There’s no annual fee, and you won’t need to connect a bank account — all you need to do is pay the opening deposit.
Plus, the card has an impressive 10% cashback rate, which is unheard of for most secured credit cards. The only catch is that the cashback is only through participating vendors, not on all your purchases, and OpenSky hasn't posted who those vendors are.
How To Choose the Right Credit-Builder Card
There isn’t a single right credit card to choose when you need to build credit. Your options for credit cards will depend on your personal situation.
For example, if you don't have a credit history yet, a student card might be a good option for you. But if you’ve filed for bankruptcy or have a low credit score, a secured credit card might be your best bet.
Here are some factors to consider:
Eligibility criteria
Some cards may have a credit score minimum, while others won't do a hard check on your credit and may base your eligibility on your employment history or the balance in your bank account.
Ensure that it's a card you can realistically be approved for before you apply. Otherwise, you'll be wasting your time and possibly causing an unnecessary pull on your credit history.
READ MORE: What Is a Good Credit Score?
Interest rate
Credit cards often charge very high interest rates, or annual percentage rates (APR). If you're not careful and don't pay off your balance every month, you could risk racking up credit card debt. This can get expensive fast and further harm your score.
Thankfully, some credit-builder cards don't charge interest, but others do. Check what the rate is and spend responsibly.
Minimum deposit amount
Putting a deposit down to open a credit card might not sound ideal, but it can help you establish good habits. Secured credit cards limit how much you can spend, preventing you from spending beyond your means.
If you're going with a secured card, keep in mind that some cards offer lower deposit minimums. Choose a card that you can comfortably make a deposit on without having to dip into any savings.
Pathway to an unsecured card
Check if the card has a pathway to getting an unsecured credit card after you've proven responsible use. Some card issuers may automatically offer to upgrade you after several months if you've consistently made your payments on time.
Rewards
See if there are any rewards associated with the card. While most credit-building cards offer the bare minimum, some cards, like the Capital One Quicksilver Secured and the Discover it Secured, offer rewards.
However, while rewards are a nice incentive, if they tempt you to overspend, a rewards-earning card might not be the right credit card for you.
Your goals
Last but not least, make sure whatever card you choose aligns with your goals. Whether you’re trying to establish credit for the first time or rebuilding your credit after years of neglect, you want to find a card that’s going to work with your spending habits.
READ MORE: How to Get a Credit Card
Pros and Cons of Credit-Builder Credit Cards
Credit is a bit of a Catch-22: you need to have credit to get credit, but it’s hard to build credit without already having credit.
A credit-builder card is a way to get around this. You can use it to build your credit and can even get one with limited or bad credit. But there are some potential downsides to consider.
Pros
- Establish good habits: A lot of credit-building cards come with opportunities to increase your credit line or graduate to an unsecured credit card.
- Avoid overspending: Unlike traditional credit cards, secured cards are backed by a cash deposit. This makes it difficult for you to spend beyond your means.
- No credit checks: Many secured cards don’t do a hard check on your credit report, so you don't need to worry that you won’t get approved because of a low credit score.
Cons
- Credit limit restrictions: If you don’t have a lot of money to put down for a deposit, you won’t have a lot of money to spend on your card.
- High interest rates: Credit-builder cards are designed for people who might not qualify for a traditional credit card. Because this involves higher risk for the issuer, you’re probably going to wind up with a high APR.
- High credit utilization: The amount of credit you use compared to the amount of credit you have is called your credit utilization ratio, and it impacts your credit score. With a low credit limit, you could increase your credit utilization, negatively impacting your score.
READ MORE: How to Increase Your Credit Score the Right Way
Bottom Line: Can a Credit-Builder Card Help Your Credit?
Credit cards often get a bad rap for being a path to debt. And while that is true if you're irresponsible with them, they're also a necessary part of building your credit history — a history that you need to qualify for loans or a mortgage later on.
Credit-builder credit cards are a safer alternative to traditional credit cards since they have a low limit or a limit set by your own deposit. After a few months of responsible usage, you should see your credit score start to increase and may even be upgraded to an unsecured credit card.
Frequently Asked Questions
Most credit cards aimed at building credit are secured credit cards — meaning they do require a security deposit. But not all of them are. Chime, for example, links a deposit account to its Credit Builder Visa Credit Card. You just have to keep replenishing the funds available in the account to be able to use the card.
It’s possible but it might be difficult. If you don’t have income to report, it signals to the credit card issuer that you won’t be able to pay your balance. You may be required to submit extra verification that you’ll be able to reliably make payments before getting approved.
Credit cards demonstrate your ability to repay borrowed money. When you make consistent, on-time payments, you’re telling lenders that you are a responsible borrower. Keeping your balance low can also help as this demonstrates a low credit utilization ratio. This tells lenders you know how to manage your money.
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