If you want to start your credit file fresh and improve your credit score, you will need a first time credit card with no credit history. Your credit score will improve over time if you do this correctly. The Ascent has put together a list highlighting the top credit card issuers who offer this type credit card.
Get rewards for your first credit card
If you have no credit history or a bad credit score, you can apply for a Discover rewards credit card to help you build a good credit history. With no foreign transaction or annual fees, an unsecured card can be upgraded as long you pay your bills promptly. The late payment penalty fee is waived for the first use of this card.
Discover has a range of rewards credit cards that are suitable for 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 significant benefit, especially if you choose to use your card responsibly. Other features include unlimited earning opportunities, flexible rewards redemption, as well as 0% APR during the first 14 months.
Discover lets you earn rewards for every purchase. Cash back earned can be used to purchase statement credits or cash. You can redeem your rewards online or by phone. There is no minimum redeemable amount. You can also redeem your rewards in any amount that you wish. You can also redeem all your rewards at once. If you want to redeem them in cash, you can do so in any amount you wish, but remember that you must maintain a good credit score.
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 means you'll have a better chance of approval, and you can avoid interest charges, which can seriously harm your score.
There are other benefits of a secured card as well. Many of them offer credit score tracking and rewards programs. Some of them offer cashback rewards. The rewards are usually modest, around 1%, and are sent out to you as a check at the end of the year.
You must make a deposit to secure a secured bank card. This is usually between several hundred and thousands of dollars. There may also be an annual fee, which takes away from the available balance. A $400 deposit would get you a $400 spending limitation, while a $75 annually charged fee will lower that limit to $325.
Department store cards
To encourage loyalty and increase revenue, department stores offer credit cards. Credit card holders are also offered cash back and other incentives when they shop in department stores. Before you apply for one of these cards, make sure you're aware of the qualifications for such a credit card.
Department stores often offer store credit cards with very low credit limits. However, your utilization rate of these cards can hurt your credit score. This is because credit scoring models look at the utilization rate of your cards, so having a store card with a low credit limit can lower your score.
If you have poor credit, a department store credit card can be a good choice. In addition to offering a variety of rewards, these cards are easy to obtain. To apply, you must be 18 years old with good or fair credit. However, if you're applying for a store credit card without a credit history, you should be aware that most of them trigger a hard check. Applying for a JCPenney creditcard will require you to provide information about income and housing costs.