Credit cards can help you build or rebuild credit if you do not have one or have a bad history. However, be careful when applying for a credit card by ensuring you choose one based on your needs and capability. This will require you to evaluate terms given by the provider to establish whether a card is the right one.
Which Type of Credit Cards Can Improve Your Credit?
The best credit cards for building credit are either secured or unsecured. This means that, regardless of your needs and capability, you can find a card to build or rebuild your credit.
Secured Credit Cards
These types of credit cards require you to make a deposit, which then becomes your credit limit. The deposit is refundable should you wish to close the account or upgrade to an unsecured credit card. Secured cards are perfect for those without credit history or have bad credit. Why?
Even if you are a credit risk, providers are less likely to deny you the preferred card. This is because they can always use the deposit to recover their money in full if you fail to repay.
The best-secured credit cards include:
1. The OpenSky® Secured Visa®
The credit card is unique because it does not require you to have a bank account. The provider allows you to use other means such as money transfer to make the security deposit needed.
The advantage of using the OpenSky® Secured Visa® is that the provider reports all your card activity to all the credit bureaus. Therefore, you can build credit by using the credit card responsibly.
2. Discover it® Secured
This is one of the best-secured credit cards. It offers rewards on purchases, has no annual fees, and no foreign transaction fees. Another advantage is that the provider can upgrade you to an unsecured credit card without requiring you to close the account.
Unsecured Credit Cards
Unsecured credit cards are suitable for those that are unable to raise the deposit needed for a secured card. Since the provider reports your card activity to credit bureaus, unsecured credit cards can help you build or rebuild credit.
Some of the best-unsecured credit cards in the market include:
1. Petal Cash Back Visa® Card
The credit card is unique because the provider determines your creditworthiness using more than just your credit history. For example, you may be required to link your bank account. The provider will then analyze your bank statements and earnings, and then use the information to determine your creditworthiness.
2. Deserve® Classic
The card is perfect for those without credit history or a restricted one. It is also suitable for foreign applicants who are not US citizens and are unable to raise a deposit. The credit card does not have annual fees but is limited by the fact that it offers no attractive rewards.
The best credit cards for building credit are either secured or unsecured. Secured credit cards allow you to set your credit limit by choosing how much you want to deposit. On the other hand, unsecured credit cards are perfect for those who cannot raise a deposit.