You need a credit card for the first time, with no credit history, to help you start your credit files fresh and improve you credit score. If you do this right, your credit score will rise over time. The Ascent has created a list of top credit card issuers offering this type of card.
For your first credit card, discover rewards
To build credit history, you can apply Discover rewards credit cards even if you have poor credit or no credit history. With no foreign transaction or annual fees, an unsecured card can be upgraded as long you pay your bills promptly. This card also waives the late payment penalty fee for the first time you use it.
Discover offers a variety of rewards credit cards designed for people in different financial situations. Although some cards do not offer one-time bonuses they offer benefits such double cashback after the first year. This is a huge benefit, especially if the card is used wisely. You also get unlimited earning potential, flexible rewards redemption and 0% APR for fourteen months.
Discover offers rewards on almost all purchases. You can use the cash you earn to redeem for statement credits and cash. Redeem your rewards online and by phone. There is no minimum redeemable amount. You can also redeem your rewards in any amount that you wish. All of your rewards can be redeemed at once. Cash redemptions can be made in any amount, but credit must still be maintained.
Secured credit cards
Credit cards that are secured can help you build credit. They aren't denied if your credit report has any derogatory marks. This allows you to have a better chance at approval. It also means that you can avoid interest rates, which can seriously damage your score.
Secured cards also offer other benefits. Some of them have rewards programs and credit score tracking. Some offer cashback rewards. These rewards are typically modest at around 1% and sent to you in the form of a check at year's end.
You will need to deposit a small amount, typically a few hundred to thousands of dollars, in order to be eligible for a secured account. You may have to pay an annual fee which will reduce your available balance. A $400 deposit will give you a $400 spending cap, while a $75 fee will bring it down to $325.
Card for department stores
To encourage loyalty and increase revenue, department stores offer credit cards. You can also get cash back or other benefits by shopping at department stores with your credit card. Be sure to review the eligibility requirements before applying for any of these cards.
Store credit cards are usually offered by department stores with low credit limits. But, these cards could lower your credit score by increasing your utilization rate. Credit scoring models take into account the utilization rate on your cards. So, having a store credit card with a low credit limit could lower your score.
For people with poor or bad credit, department store credit cards are a great option. In addition to offering a variety of rewards, these cards are easy to obtain. For you to be eligible to apply, your credit score must be good or acceptable. You should know that not all store credit cards are approved without credit history. For instance, when applying for a JCPenney credit card, you'll be asked to provide information about your income and housing costs.