Easy to Apply Online Credit Cards in the Usa
The Best First Secured Credit Cards to Build Credit of 2022
Best For Dining Rewards On A Secured Card
U.S. Bank Altitude® Go Visa® Secured Card
Up to 4X Reward Rate
Earn 4x points on dining and takeout, 2x points at grocery stores, gas stations and on streaming services and 1xRead More
Regular APR
28.24% variable
Credit Score
Bad/Poor (0 - 649)
Why We Picked It
If your biggest expenses are on dining and takeout, this is one of the best secured card offers available.
Pros & Cons
- Reports to all three major credit bureaus
- No annual fee
- Comes with a $15 annual streaming credit for eligible services
- Minimum deposit of $300 is required
- Non-bonus categories earn so-so rewards
- Other secured cards may offer rewards that better align with your spending
Card Details
- Earn 4x points on dining and takeout, 2x points at grocery stores, gas stations and on streaming services and 1x point on all other eligible purchases
- Earn a $15 streaming credit for annual streaming service purchases like Netflix and Spotify
- $0 annual fee
Best For High Rewards On A Secured Card
U.S. Bank Cash+® Visa® Secured Card
Up to 5X Reward Rate
5% cash back on on the first $2,000 in combined eligible purchases each quarter in two categories of choice, 2%Read More
Regular APR
28.24% variable
Credit Score
Bad/Poor (0 - 649)
Why We Picked It
Not only does it earn rewards, which is rare among secured cards but you can choose your own bonus adventure from a list of several everyday common spending areas.
Pros & Cons
- High rewards potential for a secured card
- $0 annual fee
- Useful convenience benefits
- Requires a deposit as any secured card does
- High variable APR
- Foreign Transaction Fees: 3% of each foreign transaction
Card Details
- Earn 5% cash back on on your first $2,000 in combined eligible purchases each quarter in two categories you choose, 2% cash back on eligible purchases in your choice of one everyday category (like gas stations, grocery stores and restaurants) and 1% cash back on all other eligible purchases
- Choose payment due date
- $0 annual fee
Methodology
Forbes Advisor analyzed dozens of cards aimed at both credit newbies and those just starting out with their first credit card in order to help you determine which might be a good fit for your needs. We focused primarily on cards that feature opportunities for building stronger credit by reporting to the major credit bureaus. Some cards are best for those with fair credit to average credit, while others are targeted for those with bad credit or those with no credit history. Bonus points were awarded to credit cards without an annual fee and for credit cards that earn rewards on spending.
The Best First Credit Cards
Should I Get A Credit Card?
Whether or not credit cards will be useful tools for you largely depends on your lifestyle and financial habits. Credit cards can be extremely useful for people who regularly use them for purchases and pay off the balance in full every month. This builds a good credit history, which is important not only for approval for better cards but also for other big life expenses like renting an apartment or getting a car loan. Credit cards also provide some fraud protection, meaning cardholders are usually not liable for unauthorized charges made to their accounts.
Is it okay to never have a credit card?
While it is not necessary to have a credit card, giving up on credit cards completely may forfeit a number of opportunities for financial growth and benefit. Credit cards provide a relatively easy way to build a credit history which in turn is a requirement for borrowing money to make large purchases (houses, cars, etc.).
By foregoing credit cards, consumers may also miss out on rewards programs, fraud protection and any service requiring you to have a credit card on file—for example, renting a car or booking some hotel rooms. (Debit cards can be used to do some of these things, but using a debit card comes with other disadvantages, such as tying up funds in your bank account). If you're committed to living a life without credit cards you can certainly use a mix of cash, checks and debit cards and avoid the risks credit cards may pose.
Credit Card Requirements
You'll need some key information to apply for a credit card. Your Social Security number will almost always be needed to run a credit check, which will more than likely make a hard inquiry on at least one of your credit reports. You'll also need to provide your contact information, including your full name, address and phone number. Some issuers might also require you to provide your date of birth and employer or income information.
Your credit report might be a major deciding factor in the issuance of a credit card. The credit report document is issued by consumer credit reporting agencies, also known as credit bureaus, and contains all the borrowing history associated with your Social Security number. It's important to note having a good credit score doesn't guarantee approval for a credit card. Credit card issuers will also look at other factors such as your income and current debt levels.
For more details on how to apply for a credit card, check out our guide on the process.
What to Look For In a Credit Card
What makes a credit card a good credit card? First, ensure the card has a low interest rate. If you do ever have to carry a balance (we never recommend carrying a balance) you'll want to have as low a rate as possible—and credit credit cards are notorious for high rates. Though in some cases you may want to trade a low rate for rewards options or other benefits, be sure you're aware of the financial consequences if you can't pay in full, on time, every time.
If you are looking for rewards, whether cash back, points or miles, there's more than likely a card out there that will fit your needs. But don't forget about benefits; a card with benefits like rental car insurance or trip cancellation coverage can come in handy if you ever need them and in some cases could save you much more money than you'd ever earn in rewards.
Most importantly, make sure you choose a credit card to meet your needs. If you need to build your credit, then applying for a fancy credit card with an extensive rewards program is unlikely to make much sense. You're likely better off sticking to credit cards designed with credit score rebuilding in mind—think secured and student cards. If you're a frequent traveler, you might prioritize travel benefits over cash rewards or interest rates. You can get started on finding the perfect credit card for you by checking out our list of best credit cards of 2022, or any of our other best lists:
- The Best Credit Cards
- The Best Student Cards
- The Best First Credit Cards to Build Credit
- The Best Secured Cards
- The Best Travel Rewards Cards
- The Best Cash Back Cards
- The Best 0% Intro APR Cards
- The Best Balance Transfer Cards
- The Best Airline Cards
- The Best Hotel Cards
- The Best Business Cards
How to Get a Credit Card With No Credit
One simple way to obtain a credit card despite a lack of credit is to become an authorized user on someone else's credit card. Becoming an authorized user involves finding a trusted and trusting friend or family member to add you to their credit card account as an authorized user. This usually gives you access to many of the same benefits as the primary cardholder, including your own card with your own name on it. Many banks report authorized user activity to the three major credit bureaus.
Another option is to find a co-signer to sign on your own credit card application. This person is a guarantee to the bank that if you aren't able to make your credit card payments, they will. If you're looking for a co-signer, make sure you choose someone with a good credit score and steady income who can help increase your chances of being approved for a credit card.
Why is it important to establish credit?
Good credit is a sign to vendors, banks and companies you are a trustworthy, low-risk leasee or borrower capable of paying off your bills or loans on time. Great credit makes up a major part of your financial identity and comes with many advantages. These advantages include benefiting from lower interest or insurance rates, receiving approval for large purchases or loans and earning more rewards on shopping and travel.
How to Build Credit When You Have None
Building excellent credit can take a long time, especially if you start from scratch. Luckily there are several ways to get started on building your credit history. Becoming an authorized user is a popular route—especially for teenagers trying to build financial history early. You can also apply for a secured credit card or for a credit-builder loan. Both of these latter approaches are specifically intended as low-risk, easy ways for an individual to establish or rebuild credit history.
Become An Authorized User
You can build credit by becoming an authorized user on someone else's card. Once authorized, you will receive your own credit card attached to the primary account. From there, the process of building your credit history is straightforward: simply use the credit card and make your payments on time. If you do this consistently and avoid other credit pitfalls, such as overusing your credit, you can quickly build a decent credit score for yourself.
What Is APR?
Annual Percentage Rate (APR) is the interest rate applied to the carried balance of a credit card. Your exact APR will depend on the bank, the type of credit card and your credit score at the time of application. It will also depend on something called the U.S. prime rate, which is a standard rate used by banks to establish a baseline APR. Though you will often see APR referred to as an annual rate, any interest being charged is actually calculated every month based on your current balance.
What is a good APR for a credit card?
APRs vary greatly from bank to bank and even from card to card. Many banks offer APRs ranging from 12% to 24% and some issuers will offer a 0% introductory APR to help new credit card holders start building credit. If you look for the lowest rates possible and stay on top of your credit card payments, you can usually avoid interest entirely. For more information on the ins-and-outs of how to evaluate credit card APR, check out our guide.
Why Can't I Get a Credit Card?
Several factors may make it more difficult for you to obtain a credit card. If you do not have a steady job or provable source of income you are unlikely to receive approval for a credit card. Similarly if you have too much debt, a bad credit score and history, are under 18 or do not have a Social Security number getting a credit card in your name can be very difficult. While there are ways to work around these issues, including some—like becoming an authorized user or getting a secured card—it can take some persistence and patience while working through the process.
Alternatives to Credit Cards
Several alternatives to credit cards offer some of the benefits. Though having a credit card comes with clear advantages, it is by no means the only way to conveniently or safely handle your money.
Credit Card vs. Debit Cards
While there isn't a big difference in how you use a credit card versus a debit card when making a purchase in a store, the money used to make transactions is drawn from two entirely separate sources. With a debit card, money is taken directly from your checking account. Purchasing a $20 book, for example, will lower your account balance by $20. On the plus side, you do not run any risk of going into debt: generally speaking once you run out of money in your account, you will not be able to make any more purchases. If you are making a big purchase or expect more money to arrive in the future (from a paycheck, for example), this limit can be much more of a hindrance.
Credit cards draw from a line of revolving credit extended to you by a card issuer. You will be able to make payments up to your credit card limit regardless of whether or not that money is available in your checking account. At the end of the monthly billing cycle all relevant charges will appear on your billing statement and you will need to make at least the minimum payment in order to keep using the card. While the obvious disadvantage is that you can go into debt by spending money you don't have (or racking up astronomical interest if you cannot pay off your total bill), having a credit card allows you to still make purchases—from emergency to everyday to expensive—without the limitation of your current checking account balance.
Charge Cards vs. Credit Cards
Charge cards offer another alternative where credit is extended but the balance must be paid in full each month. Charge cards do not typically have interest rates in the same way a normal line of revolving credit on a credit card does and do not necessarily come with a preset spending limit. This makes them an adaptable, efficient type of credit card useful for a variety of purchases. Charge cards also come with a lot of risk: if you cannot pay off your balance at the end of the month, you can quickly get into some serious trouble with your issuer.
Due to this risk, charge cards are rarely offered by banks and always require a good to excellent credit score in order to be approved. These cards are also usually subject to high annual fees.
Personal Loan vs. Credit Cards
Personal loans and credit cards are both forms of credit, but the two vary in several significant ways. With a personal loan, you receive all your money at once in a lump sum. You then pay off this loan in steady installments over time, with a set end-date for your final payment. These payments include interest. Thanks to lower interest rates, these loans are useful for making large, one-time purchases or consolidating high-interest debt. For smaller and more frequent purchases—especially when building your credit score—a credit card remains the better choice.
Bottom Line
When used responsibly and correctly, credit cards offer huge advantages in terms of rewards, fraud protection, spending power and convenience. The wide variety of credit cards and credit card issuers means you'll almost always be able to find a credit card to meet your specific needs so long as you are eligible for application and approval. By making regular payments, remaining vigilant about the risks of overspending and finding cards with low APRs, credit cards can help fund a comfortable and practical lifestyle.
Frequently Asked Questions
How does a credit card work?
A credit card allows its user to pay later for goods and services purchased now. A credit card is issued by a financial institution and allows, by means of a processing network, a cardholder to borrow money from the issuing financial institution in order to transact with a merchant. Approximately every 30 days—occasionally 60—the bank issues a credit card bill detailing the transactions charged to the card and the cardholder then pays off this balance. Credit cards can be leveraged for many purposes and come in many types for many goals
What do you need to qualify for a starter credit card?
At a minimum, if under 21 you will need either employment or proof of income. If you are 21 or older, employment is not technically required but it will be more difficult to get a credit card without a source of income. We offer a guide to what you need to have when you apply for a credit card to help you compile all the necessary information and materials.
How does a credit card affect my credit?
A credit card can help your credit score or hurt it depending on how you use it. If you pay your credit card bill on time and keep your credit utilization low, your credit score will rise and strengthen as your history is reported to the three major credit bureaus. If you don't pay your bill on time, your negative behavior will be shared with the credit bureaus and drive your score down.
How long does it take to get a credit card?
Receiving approval for a credit card and having access to virtual card numbers can happen in minutes, but usually only for those applicants with great credit and income and with issuers who offer virtual card numbers. For everyone else, application processing may involve follow-up documentation and waiting to receive a card via snail mail. For a normal process, receiving approval for and then receiving a physical card can take anywhere between two and 14 days—perhaps even longer. Don't rush into getting a first credit card.
Can you get a credit card with no income?
Yes, but it may be difficult. Credit card issuers want to make sure you'll have the means to pay off charges you make on your card. Without income, you'll likely need to provide substantial assets or otherwise demonstrate an ability or forthcoming ability to pay. Don't expect the application process to go smoothly—you'll likely be required to provide additional documentation if you don't offer up adequate evidence of ability to pay from the beginning.
How much of my credit card should I use?
Opinions on where to keep your credit utilization vary, but the most widely agreed upon marker is 30%. You should keep your credit utilization below 30% to maintain your healthy credit score. For more information, see our guide to credit utilization.
How much will a secured credit card raise my score?
Increasing a credit score requires demonstrating healthy credit usage and spending habits. Using a secured card to build credit can help achieve this, but calculating its benefit in terms of a credit score is difficult because each individual's credit and situation is different. If you're brand new, establishing a credit score by opening a secured account is a great first step and takes you from not having any credit to having some credit. Repairing a credit score using a secured card following bankruptcy or other credit damage can look quite different, but since secured cards may be one of the only ways to use a credit card to rebuild credit, they're often a worthwhile tool to start with—especially since many can be upgraded to unsecured accounts in a few short months.
Who invented the first credit card?
Credit systems have been around for centuries. The Code of Hammurabi established rules for lending money and charging interest back in 1792ish BCE, but the modern credit card system was pioneered by Frank McNamara and Ralph Schneider, who jointly launched the first Diners Club card in 1950. Other systems of credit, including John C. Biggins' 1946 Charg-It card system experimented with the idea in the first part of the 20th century. To learn more about the history of credit cards, check out our guide.
What is the best first credit card?
The best first credit card for you will depend on your goals and circumstances. In any circumstance, it's best to choose a card that will report to all three credit bureaus so your good payment behavior can help you lay the foundation for solid credit with all three bureaus.
For someone with some credit already, a card offering rewards may be a motivating way to get started with credit cards. Someone new to the country or without any credit at all may require a card tailored to those needs, like a secured or student card.
What to look for in a starter credit card?
The best starter credit card for you will provide a balance among benefits—such as reporting to the three major credit bureaus to help raise your credit score—and costs to carry—such as annual fees or any other maintenance costs. If you're brand new to developing credit, look for a card designed for those without credit history with features to help strengthen credit and not designed only to charge money for access to credit.
Other Cards to Consider
Forbes Advisor also has created a list of secured card recommendations and a list of best student credit cards. One of these options may be better for your needs.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author's alone and have not been provided, approved, or otherwise endorsed by our partners.
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Source: https://www.forbes.com/advisor/credit-cards/best/first-credit-card/
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