There are a lot of credit cards out there, but there aren’t as many options for those having a tough time financially. Here are a few cards that will fit your needs and help you build your creditworthiness, and a few tips on how to use them.
Best Credit Card for Fair Credit or Limited Credit History
A “fair” credit score means that you have a score of about 650 to 700 out of 850. Frankly, this score is not great, and it can be hard to find a good card that you qualify for with only a fair credit score.
This can be frustrating because one of the best ways to improve your credit score is by using your credit card responsibly.
A big contributor to your credit score is your credit history. If you don’t have a proven track record of paying off your credit, banks are wary of giving you access to debt. In other words, they don’t see you as “creditworthy.”
It’s a good idea to start building your history now so that when you need a loan to buy a car or house down the road, you’ll be eligible for a lower interest rate. Here’s a card that can help you with that.
- Annual Fee: There is none. If you use it responsibly, it’s free.
- Application: This card has a reputation for approving applicants with a short credit history, or no credit history at all.
- Grow your Credit Line: You can increase your credit limit after 5 months of full, on-time payments.
This is a “no bells and whistles” credit card. If you have built a credit history, you could probably find a better offer somewhere else, but if you’re just trying to get in and build a history, this is a great place to start. Use this card wisely for up to a year and build a credit history, then find another card to get some rewards.
Best Credit Card for Bad Credit
A “bad” credit score is a score between 300 and 650. People who fall into this category often have had to file bankruptcy, defaulted on multiple loans, or foreclosed on their house. They’re often at rock bottom, so it’s really hard to qualify for a credit card and start rebuilding credit.
This card is designed for those who are looking to rebuild their bad credit. Check out these important details about the card and why it would help you rebuild your credit.
Secured Mastercard® from Capital One®
- Fees: This card does require a $49 – $200 security deposit, but there are no annual fees.
- Refundable Deposit: The deposit may be refunded down the road if Credit One decides you are eligible for an unsecured credit line, or if you close the account with a $0 balance.
- Grow Your Credit Line: You can increase your credit limit after 5 months of full, on time payments.
If you have bad credit, don’t let the security deposit deter you from boosting your credit score. Take this opportunity to open a credit line, pay it off every month, and build your credit until you can get a better card offer. This card is not for everyone, but it’s great when it comes to helping customers recover from bad credit.
Best Credit Card for Young Adults and College Students
A university education can be really hard on the bank account in the short run. Tuition costs thousands of dollars per semester, and it’s next to impossible to work a full-time job. On top of that, you’ve likely not had a credit card for very long, so your creditworthiness is unproven.
All of these things add up to make it hard to even qualify for a credit card, let alone one that will actually help you with your finances. Here’s a card that is tailored specifically for the hardworking student.
DISCOVER it® Student Cash Back Card
- Fees: First off, there are no initiation or annual fees.
- Good Grade Rewards: Discover will give you $20 each year your grades are above a 3.0. It’s not much, but it’s still kinda fun.
- Cash Back Rewards: Each quarter, Discover chooses a category of purchases that you get to earn 5% cash back on. You also get 1% cash back on all other purchases.
- Cash Back Match: At the end of your first year with Discover, they match all the cash back you’ve earned throughout the year.
Basically, with Discover’s Student Cash Back Card, you get a credit card with lots of great benefits and no required fees. If you use it wisely, you won’t have to pay them a penny in interest, and you can make some money from your everyday purchases.
Best Credit Card for Older Adults
If you’re an older adult with a long credit history, your needs are likely very different from those of your younger peers. You should have a credit card that is specifically designed for the needs of senior citizens. Here’s a card that is just that.
AARP® Credit Card from Chase
- Cash Bonus: Get $100 cash from Chase after you spend $500 with your credit card during your first three months.
- Other Rewards: 3% cash back on purchases at gas stations and restaurants, and 1% cash back on all other purchases.
- Annual Fee: No annual fee. Just use your card and benefit from its rewards programs.
The card and benefit structure is very simple. Spend money in gas stations and restaurants and you’ll get a bit back. You can also use your reward cash as travel points: one cent translates to one travel point. This allows flexibility for seniors who may want to use rewards either as cash or for travel. The APR is also relatively low, so seniors can also be less concerned about amassing debt.
Credit Card Use Tips
We have a ton of content on how you can get the most out of your credit cards. We have information on how to raise your credit score, how to pay off your debt, credit scores, and a lot more. So check that out, but here are a few quick tips to help you get started.
- Use your credit card like a debit card. Don’t buy what you can’t afford
- Pay it off every single month. Credit card interest rates are high.
- Keep a low balance compared to your credit limit. Your credit score will improve faster.
- If you’re just getting started, pick a credit card with no upfront or annual fees if possible.
