Top 3 Starter Credit Cards

If you’re new to the credit game, a starter card may be the best option for you to begin building your credit, but where do you start? There are a lot of options available to you from secured credit cards to student credit cards and even a few unsecured credit cards. But when it comes to the credit card game, not all cards are created equal and you’ll want to choose a card that aligns with your long term goals and benefits you in the meantime as well. Let’s break down what those cards entail and I’ll give you my top three recommendations for starter cards and their benefits.

Secured Credit Cards

A secured credit card is a type of card that requires a cash deposit that is usually equal to the credit limit. The deposit serves as collateral in the chance that you default on your payments. This type of card is low risk to the bank which means that it is more accessible to borrowers with low or no credit. These cards typically have high interest rates and few perks, such as cash back or travel rewards, but are a good way to begin building credit if you are unable to obtain an unsecured credit line.

Student Credit Cards

A student credit card is a type of card that is typically available to college students or recent graduates with little to no credit history. These cards are usually unsecured, meaning there is no cash deposit backing them as collateral, and have few benefits, similar to secured cards. Their interest rates are typically in the higher range compared to regular unsecured credit cards and they have few benefits, such as travel rewards and cash back. These also usually have lower starting credit limits, such as $500 as the intended borrower hasn’t built creditworthiness for higher limits, yet. These cards can be a great alternative to secured cards for younger borrowers who are looking to build their credit but don’t want to put down collateral. Just remember to always pay off your card or your efforts will be in vain!

Unsecured Starter Credit Cards

An unsecured credit card is a credit card that isn’t backed by collateral. This is your most common type of credit card but can be more difficult for those with low or no credit to obtain. However, there are some that are marketed as starter cards. These cards often have better perks and don’t have the same constraints as the other two types of cards. With these cards, you’re more likely to see travel perks and cash back rewards. If you’re late to the game and don’t qualify for a student card, this may be the right option for you. 

Recommendations

• $0 Annual Fee
• 2% Cash back at gas stations and restaurants; 1% on all other purchases
• Cashback Match: automatically matches your cash back at the end of your first year
• 28% APR

• $0 Annual Fee
• 5% cash back on everyday purchases; 1% on all other purchases
• Cashback Match: automatically matches your cash back at the end of your first year
• 17-27% APR

• $39 Annual Fee
• 5% cash back on hotels and rental cars; 1.5% back on all other purchases
• No welcome bonus
• 29.99% APR