9 Best Credit Cards To Build Credit in November 2024

Using your card responsibly is key when using a credit card to build credit. A pattern of using part of your credit limit and paying off the purchases will go a long way in raising your credit score.

Keep charges minimal to keep utilization rate low

A good rule of thumb is to use less than 30% of your available credit to keep your credit utilization ratio low. For example, if your credit limit is $500, you should keep your balance under $150.

Make payments on time

Making on-time payments is one of the simplest things you can do to build credit. Set up an automatic payment or monthly reminder on your phone so you’ll never miss a payment — this also saves you from paying a late fee and interest.

Pay your balance in full each month

Pay your full statement balance on, or before, the due date. When you only make the minimum payment, you risk paying a large amount of interest and getting stuck in a debt cycle.

Only apply for a credit card when it’s truly needed

Every application for a credit card creates a hard inquiry on your credit history. This lowers your credit score by a few points each time and stays on your credit report for two years. Too many hard inquiries in a short amount of time can be a red flag to lenders.

• Access to loans and credit

  When you build a positive credit history, lenders are more likely to approve your applications for loans, credit cards and other forms of credit. This access can be essential for financing major expenses such as buying a home, purchasing a car or paying for college.

• Lower interest rates

  A good credit score can lead to lower interest rates on loans and credit cards. This translates to lower monthly payments and less money paid in interest over the life of the loan, potentially saving you thousands of dollars.

• Financial flexibility

  Building credit provides you with the flexibility to manage unexpected financial needs. Having a line of credit available can help cover emergencies or unexpected expenses without resorting to high-interest options.

• Renting a home

  Many landlords and property managers use credit checks to assess the reliability of potential tenants. A solid credit history can increase your chances of securing a rental property, as it demonstrates your ability to meet financial obligations.

• Employment opportunities

  Some employers may consider your credit history as part of their hiring process, particularly for positions that involve financial responsibilities. A positive credit history could improve your chances of landing your dream job.

• Better insurance premiums

  In some cases, insurance companies may use credit scores to determine insurance premiums. A higher credit score could lead to lower insurance costs over time.

The best way to build credit is through patience, commitment and fiscal responsibility. It’s not an overnight process, and you need to be dedicated to see positive results. Below are some steps to get started:

1. Pay your bills on time, every time. This is the most important step in building credit, as it accounts for 35% of your credit score. Making on-time payments will establish a positive payment history and prove to lenders that you are able to pay back your debts.
2. Keep your credit utilization ratio — the percentage of your current debt in relation to your available credit — below 30%. For example, if your credit card has a limit of $1,000, you should keep charges at (or preferably below) $300 and pay off that balance each month. The lower you keep your credit utilization ratio, the faster your score will improve.
3. Focus on diversifying your credit mix. Lenders like to see that you can manage both revolving credit (such as a credit card) and installment credit (such as a personal or auto loan). If you already have a credit card and are able to manage it responsibly, consider applying for a credit builder loan to enhance your credit mix and further strengthen your credit profile.

When looking for a credit card to build credit, you’ll come across both secured and unsecured credit card options. If you’re new to credit cards, then a secured card is likely a better fit to help you build credit.

Secured credit cards require a security deposit — normally a minimum of $200 — that acts as your credit limit. Although a deposit is required, secured credit cards are typically more accessible to people with bad credit.

When deciding which type of card is best to help you build credit, reviewing the pros and cons of each can help narrow down your card options.

Secured credit cards	Unsecured credit cards
Typically available to people with bad or fair credit Low or no annual fees Ability to graduate to an unsecured card after responsible usage Lacking or minimal rewards programs Security deposits required Small or no sign-up bonuses	Higher sign-up bonuses and valuable rewards No security deposit required Can offer travel benefits and/or credits Can have higher annual fees May not be available to people with bad or fair credit

Here are a few key strategies to consider when choosing a credit card to build credit:

• Focus on cards designed for individuals with limited or no credit history, often known as “starter credit cards.” These cards are more likely to have no annual fees and reasonable interest rates, making them an excellent choice for beginners.
• Opt for a card with a manageable credit limit, such as a secured credit card. This will help you keep your credit utilization ratio low, which positively influences your credit score.
• Choose a card from an issuer that reports your payment activity to all major credit bureaus. Reporting ensures that your responsible credit behavior is accurately reflected in your credit reports.
• Prioritize cards with minimal fees and clear terms over flashy perks. This will help you concentrate on strengthening your credit profile, rather than trying to spend enough to earn a free hotel stay or sign-up bonus.

Best types of credit cards to build credit

The best types of credit cards for building credit are those designed specifically to assist individuals with no or limited credit history. The following card types are ideal credit-building tools:

Secured credit cards

With a secured credit card, you deposit cash to secure a credit limit that’s usually equal to your deposit. Some cards let you transition to an unsecured card or offer automatic credit limit increases after you’ve used your card responsibly. Our pick for the best secured card to build credit is the Discover it^® Secured Credit Card.

Student credit cards

The approval requirements for student credit cards are generally lower than regular credit cards, making them a good option for college students. These cards may offer cash back or other types of rewards geared toward students. Our pick for the best student card to build credit is the Discover it^® Student Cash Back.

Gas credit cards

Gas credit cards offer either rewards on gas station purchases or a fuel discount. They are often easier to get approved for, making them a viable option for building credit. Our pick for the best gas card to build credit is the Capital One Quicksilver Secured Cash Rewards Credit Card.

Store credit cards

Many retailers, like Walmart and Amazon, offer store-specific credit cards that can only be used at that store. Like gas cards, they’re generally easy to get and will offer perks specific to that retailer. Our pick for the best store card to build credit is the Amazon Prime Store Card.

Getting approved for a credit card may be challenging while building credit — follow these tips to increase your odds of getting approved:

1. Choose cards geared toward applicants with limited credit histories: Look for cards whose minimum credit score matches your credit history.
2. Get preapproved for a credit card: Many banks allow you to be preapproved or prequalified for a card without impacting your credit.
3. Don’t apply for too many credit cards at once: Limit your applications — applying for several cards at once is often considered a red flag for financial difficulty.
4. Pay down existing debts: A lower credit utilization ratio can help improve your chances of being approved, since it plays a large role in determining your credit score. To pay off your debt, you should first decide what needs to be paid right away, and then create a budgeting strategy.

While it’s frustrating, remember that being denied for a credit card is a temporary setback. By taking the steps listed below, you can work towards improving your financial standing and increase your chances of getting approved in the future.

1. Review the denial letter: Carefully read the denial letter or email from the credit card issuer. They usually provide the specific reason for the denial, whether it’s due to your credit score, income or other factors. If the reason is something that can be addressed quickly (for example, you realized you forgot to add all your income sources on your application), you can let the issuer know and ask them to reconsider.
2. Check your credit report: Obtain a copy of your free credit report and look for any inaccuracies, errors or discrepancies that might be affecting your credit score negatively. If you find any, follow the procedures to dispute and correct them.
3. Improve your credit: If your credit score played a role in the denial, focus on improving it. Pay your bills on time, keep credit card balances low and avoid opening multiple new credit accounts in a short period. Over time, these responsible habits can help improve your score.
4. Consider alternative cards: Research credit cards that are more suited to your current financial situation. Some cards — such as student cards and secured cards — are designed for individuals with limited credit history or bad credit. Applying for cards aligned with your profile increases your chances of approval.
5. Wait six months to reapply: Reapplying for a credit card too quickly can have a negative impact on your credit score. In fact, credit bureaus recommend waiting at least six months before submitting your next application. During this time, you should be focusing on the steps above. Once that six-month period is up, and you’ve corrected the issue that led to your denial, you can reapply with confidence.