The Best Credit Cards to Build Credit in 2021

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excited woman computer by Manuel Alejandro Leon on Pixabay 1427787_1920
Photo courtesy of Manuel Alejandro Leon on Pixabay
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Being financially successful partially involves knowing how to use credit. However, if you are just starting out and do not have any borrowing history, you might not even know how to build credit. Additionally, if you have made a few mistakes, you might think that your credit is irreversibly damaged. This is not true. It can be rebuilt. In this article, we’ll share tips to build good credit and our recommendations for the best credit cards to build credit.

6 Tips to Build Good Credit

Get a copy of your credit report

With a credit report, you have a line-item list of all the agencies that have reported non-payment or late payments. Because bad debt can date back seven years, it is important to obtain a credit report to prevent you from forgetting about any accounts.

Your credit report is available for free at AnnualCreditReport.com. You are entitled to one free credit report each year from each of the three major credit bureaus – Equifax, Experian, and Transunion.

Pay off your small debts first

Although the amount of bad debt you have affects your credit score, the overall number of accounts also injures your financial standing. To fix this, identify and pay off the accounts will the lowest balance first. Doing so will give you a sense of control and success while also reducing the overall number of negative accounts. Once a small debt is paid off, apply that payment towards the next smallest balance until it is paid in full. Continue this pattern until all debts are paid off to boost your credit score. This is known as the Snowball Method.

Do not be late on bill payments

One of the best ways to build your credit score is to continue paying your credit cards, loans, utility payments, and other monthly payments on time. Setting your account to pay the minimum payment due automatically from your bank account ensures that you will never be late. This avoids a bad mark on your credit report and avoids late payment fees.

Finding the right card

Knowing how to build credit is key to eventually having good credit and knowing how to use it to your financial advantage. The first step in establishing a solid borrowing reputation is to identify the best credit cards to build credit and figure out which ones you might be approved for.

Simply put, not all credit cards are equal. Some offer rewards. Some have low percentage rates. While others have no fees. You need to compare the pros and cons of each card in order to make the best decision for your particular financial reality.

Many card programs are designed to help people responsibly use credit by offering free credit scores, score simulators, and other learning tools. As you use your credit cards responsibly, they will increase your credit limit to reward your good behavior.

Use ScoreMaster to build your credit

With ScoreMaster, you can quickly add points to your credit score through their proprietary technology. The average customer increases their credit score by 61 points within 20 days. Its custom tools show you how much to pay, how to control your spending, and provide targeted dates to pay bills to maximize your credit score. Simple action buttons offer an easy way to take action on accounts that are negatively affecting your credit report.

Apply for one of the best credit cards to build credit

Although you might think you will not be selected for a credit card, there are numerous cards out there that can help you financially. Armed with one or more of these cards, you can establish solid credit. Having a credit card enables you to rent a car, pay for emergencies, or shop online.

Best Credit Cards to Build Credit
Having a credit card makes it easier to shop online or in-person

Best Credit Cards to Build Credit

tomo.

The tomo. credit card is a curious little card that packs some impressive benefits. It reports to all major credit bureaus, which helps to establish a record of on-time payments. How it works is that it assigns a credit limit based on your personal financial data, and it links to your bank account to help make payments easier.

In terms of perks, the fact that this card does not have any fees or an APR makes it one of the best tools to build credit. In fact, it might be the best credit card for building credit.

Pros

  • Auto-pay feature helps keep your payments on schedule
  • No APR
  • Does not require a security deposit
  • Credit limit up to $10,000
Cons

  • Weekly auto pay might be too much for some budgets
  • Initial credit limit might be lower than you desire
  • Not many print styles to choose from

Avant

The Avant credit card is another top choice for people wanting to establish or re-establish credit. Its online dashboard allows you to easily make payments, and the card comes with zero fees. Plus, you’ll receive a generous credit limit without having to fund a security deposit.

Pros

  • No hidden fees
  • Liability protection
  • Does not require a security deposit
  • Generous credit limit up to $1,000
Cons

  • APR is higher than some cards
  • Might impose an annual fee
  • Actual credit amount or APR might vary with promotions

Grow Credit

Grow Credit is one of the most innovative ways to build credit in that it provides cardholders the opportunity to sign up for subscription-based services like Netflix and then use the card to pay the monthly payment. By linking a bank to the account, the subscription is paid automatically.

Because cardholders use Grow Credit to pay the subscription, their credit improves with each successful payment because Grow Credit reports to the top credit bureaus. The end result is a painless and elegant way to build your credit via subscriptions you would already be using and paying for.

Pros

  • Build credit by making monthly payments to subscriptions
  • Offers a variety of digital subscriptions to sign up for
  • Connects to your bank for automatic payment
Cons

  • Limited subscriptions to choose from
  • Cannot use the card for traditional purchases
  • Free account limited to $17 per month
  • Premium plans have a monthly fee

Self

Self Credit Builder Loans is another unique program in that it helps you build savings with each payment. After your final payment, the balance is released to you. This program helps to build your credit history while you save money. There is no other program like it because it helps you build wealth, stability, and financial responsibility.

Pros

  • Helps you build savings with each payment
  • Reports to credit bureaus
  • You can start for only $25 per month
Cons

  • Cannot use the card like a traditional card
  • Takes up to 24 months to complete
  • Cannot access your savings until the payment program is complete

UNITY Visa Card

UNITY Visa Card is a traditional secured credit card that can be used anywhere Visa is accepted. You start by depositing money with One United bank to establish your credit line. The minimum credit limit is $250 and matches your security deposit. You can unlock a higher credit limit by depositing more money as security. One United reports your payment history to all three credit bureaus to help build your credit. It is a black-owned bank and supports urban communities to help members when they need it the most.

Pros

  • Low annual fee
  • Use card anywhere Visa is accepted
  • Starting credit limit of $250
  • Can cancel the card and receive your deposit balance
Cons

  • Must make a deposit to use the card
  • Annual fee
  • Moderate APR
  • $10 fee to increase credit limit

Petal

Petal offers two credit cards with no annual fees. The company links to your bank account and evaluates your banking habits to assigns a Cash Score. This score determines your credit limit, fees, and APR based on income, spending, and savings.

Depending on your particular needs, Petal offers two programs. One comes with fees, such as late fees. The other does not. That said, it is important to note that neither card has an annual fee, making it a very inexpensive way to use and build credit.

Pros

  • No security deposit required
  • Banking history dictates interest rates
  • Minimum credit limit of $500
  • No annual fees
  • Cash-back rewards
Cons

  • Cash-back rewards limited to select vendors on basic card
  • Late fees may apply
  • Reduced privacy with access to your bank account
Best Credit Cards to Build Credit
Good credit habits build your financial success. Photo courtesy of Nattan Kanchanaprat on Pixabay

The Bald Thoughts

When it comes to how to build your credit score, you need to start now. It can be easy to rack up a bunch of debt if you don’t use these best credit cards to build credit wisely. However, many of the programs listed above actually are designed to prevent you from doing that. Innovative programs allow you to build your credit while growing your savings or by paying for subscriptions that you would normally pay with your bank account.

It is important to note that successful people know how to use credit and use it to help develop significant wealth. With so many innovative and exciting ways to build your credit, you can easily build a solid foundation for future credit use.

With that in mind, you should apply to one of these credit cards today to start building your financial future.


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