Your credit score can determine what apartments you are eligible for, which jobs you can have, your loan eligibility, and the amount you’re able to borrow to purchase a home.
While there are a variety of credit scores in existence, the most frequently used score is the FICO score, which ranges from 300-850 and is categorized as poor, fair/average, good, or excellent. Credit scores are comprised of several different elements including your utilization rate, payment history, amount of debt, and the length of your credit history. Maintaining a consistent payment history and a low utilization rate make the biggest impact. Those who manage to earn scores in the excellent range typically see lower interest rates and are eligible for more borrowing options.
For individuals beginning to establish their credit or make improvements to their score, credit cards are an effective way to do so when used wisely. Below are 10 cards you can use to improve your credit.
For Poor Credit or No Credit
Capital One Secured Mastercard
Capital One offers a secured credit card option for those establishing or rebuilding their credit. The security deposit required for this card is lower than others, ranging from $49 to $200. This also means the initial credit limit is capped at $200. After five on-time monthly payments, cardholders are eligible for a higher line of credit.
Discover it Secured Card
Unlike most of its competitors, the Discover it card provides the opportunity to earn rewards. For a secured card with no annual fee, this is rare. Security deposits on this Mastercard are equivalent to the line of credit. Gas and restaurant purchases earn 2% cash back with a $1,000 yearly limit. It drops to 1% for every other category.
Citi Secured Mastercard
The Citi card carries no annual fee, but does not provide rewards. However, it comes with a relatively low deposit option at $200 with a $2,500 maximum. The card provides identity theft assistance.
Wells Fargo Secured
With a 20.49% APR, this card from Wells Fargo comes in below other secured cards. The bank’s card does have an annual fee, though at $25 it is one of the lowest. To use this card, a $300 security deposit is required. Cardholders have access to online budget tools to help keep their finances on track.
OpenSky Secured Visa
The OpenSky card differs from the others by not requiring users to have a bank account. There is a $35 annual fee and a $200 deposit, but they do not check your credit when you apply.
For Average Credit
Capital One® QuicksilverOne® Rewards
Customers earn 1.5% cash back on purchases in all categories. The annual fee is $39, which means cardholders would need to spend $2,600 per year to break even.
Capital One® Platinum Credit Card
The Platinum Card does not have an annual fee nor foreign transaction fees. Customers are eligible for an increased limit after five on-time payments.
Southwest Rapid Rewards Plus
Southwest partnered with Chase for this card which charges a $69 annual fee and provides airline-specific rewards that are close to those offered by higher level cards. For frequent travelers, it may be worth it to take advantage of this card.
The Slate has no annual fee, a 0% introductory APR for the first 15 months, and provides monthly FICO score updates. Additionally, balance transfers occurring within 60 days of opening the account are not charged the 3% fee. This card can help consumers tackle debt and increase their credit score at the same time.
Amazon Store Card
The main benefit to this card is the option for financing on large purchases with some of those purchases qualifying for a 0% interest rate until they are completely paid.