Best First Time Secured Credit Cards for Bad Credit
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Best First Time Secured Credit Cards for Bad Credit

Tanmay Punyarthi

Table of Contents

The benefits of establishing good credit are manifold. A good credit score helps all along the way, be it applying for a job, renting an apartment, or purchasing a new car. By using your first time secured credit card responsibly, you can build credit history and work to get a credit score. Your credit score helps lenders know whether you’re a risky borrower. The amount of available credit and payment history are among the factors that help to determine your credit score.

Now, by paying your secured credit card bills on time, you establish a good credit history and increase your credit score. All this opens the doors to a range of new credit options. In addition to that, you can save more money since you get to enjoy favorable repayment terms.

Additionally, there are other benefits of using credit cards for the first time to build credit. This includes availing rewards and cashback. Other than that, credit cards come with the benefit of fraud protection. That’s because cardholders are not liable for unauthorized charges on their credit cards.

On the flip side, if you have bad credit, it may be difficult to get loans, employment, or a driving license.

So, if you are new to credit and do not have a credit card, start looking for the best first time credit cards to build credit.

Why Am I Not Getting a Credit Card?

There are various reasons why you may face difficulty obtaining a credit card. Without a steady job or income, it is difficult to get approval for good first time credit cards to build credit. Moreover, if you are under 18 or do not have a Social Security Number, it may be tough for you to get a credit card. Certainly, you can work your way around such issues. Signing up as an authorized user is one way of doing so. And if you are above 18 years, consider applying for your first credit card to start building credit. Also, remember that it takes time for a first time credit card user to build credit, so you have to be patient.

How do Secured Credit Cards help to Establish Credit for First-Time Users?

The best secured credit cards for first timers help to build credit and get access to a range of credit options.

Even so, when applying for your first time secured credit card, you have to put down a security deposit. The cash deposit goes into a bank or collateral account and determines your card’s credit limit.

With some of the best first time credit cards to build credit, you can make purchases up to the given credit limit on your secured card. But, remember, you have to pay your monthly bills on the secured credit card on time. The credit-scoring agencies then receive reports of your responsible credit behavior from the credit companies, which leads to you getting a good credit score.

Let us now move on to looking at some of the good first time credit cards to build credit.

Best Secured Credit Cards for People with Bad Credit

Here is a round-up of the best first time credit cards to build credit for people with bad credit:

1)     Zolve Azpire Secured Credit Card

2) Discover it Secured Credit Card

3)     Bank of America Customized Cash Rewards Secured Credit Card

4)     Navy FCU nRewards Secured Credit Card

5)     U.S. Bank Altitude Go Visa Secured Card

Let’s study the best first credit cards for building credit in detail below:

1) Zolve Azpire Secured Credit Card

The Zolve Azpire Secured Credit Card is one of the best first credit card for building credit and its various features include:

  • No credit check required
  • Helps to build credit over time by reporting to the major credit bureaus
  • No annual or late fees charged

2) Discover it Secured Credit Card

Some features of the Discover it Secured Credit Card are:

  • Requires you to pay a security deposit of at least $200, which offers a $200 credit line
  • Offers unlimited 1% cashback on your purchases and 2% at gas stations
  • Imposes no annual fees or penalties

3) Bank of America Customized Cash Rewards Secured Credit Card

The various features of the Bank of America Customized Cash Rewards Secured Credit Card, counted among the best first secured credit card, are:

  • Offers 1% cashback on your purchases, 2% on your grocery purchases, and 3% cashback on online shopping, gas, and dining deals
  • Obligates you to pay a refundable deposit between $300 and $4900
  • Comes with a 26.24% variable on balance transfers and purchases

4) Navy FCU nRewards Secured Credit Card

Some features of the Navy FCU nRewards Secured Credit Card, rated among the best first credit card for building credit, include:

  • Comes with cell phone protection benefits
  • Earns you more rewards if you spend more; you can accrue reward points and then redeem
  • Does not levy balance transfer fees, cash advance fees, and annual fees

5) U.S. Bank Altitude Go Visa Secured Card

The different features of the U.S. Bank Altitude Go Visa Secured Card, rated as one of the best credit cards to build credit for the first time, are:

  • Requires putting up a minimum $300 deposit
  • Offers a 15% streaming credit annually for Spotify and Netflix services
  • Sends reports to all 3 main credit-reporting agencies

A range of factors are considered before determining which is the best secured credit card for first timers. However, deposit requirements, rewards programs, fees, and chances to upgrade to an unsecured credit card are the most important considerations. Many people opt for the Zolve Azpire Secured Credit Card because of its attractive features. However, make sure you check minimum deposit amounts, annual fees, and other charges before zeroing in on your first credit card for building credit. After all, you want more savings and the best deals, right?

FAQs

1. What are Secured Credit Cards?

Ans. Secured credit cards are designed to help people with bad credit or no credit develop good credit standing. They require you to pay a security deposit into a bank account. You cannot use the deposit money in the bank account until you have the secured card. The amount of your security deposit and credit card limit are the same.

2. How do secured cards work?

Ans. Secured cards work similarly to unsecured credit cards, yet they come with an important difference. As far as secured cards go, the amount of cash you put up determines your credit limit and guarantees your credit line.

3. Can you explain how secured cards help in building credit?

Ans. Reports of secured credit card payments are reported to the three main credit agencies. This implies that you can build credit with a good payment record and get a poor credit score by defaulting on payments. The best secured cards send regular payment reports to the credit-reporting bureaus.

4. How soon can a secured card help to establish credit?

Ans. Normally, secured cards send monthly reports to the credit-reporting agencies. However, the credit bureaus use the payment information as per their discretion. In some cases, banks offering secured cards provide the opportunity to graduate to an unsecured credit card if you make payments on time for a given number of months.

5. How do people with no credit history establish credit?

Ans. If you are new to credit, you will not have any score with the two leading credit-scoring agencies - FICO or VantageScore. To establish a FICO score, you have to use a credit card for six months. VantageScore, on the other hand, considers your credit activity for the first month.

To build a good FICO score, you must use your starter credit card, maintain your credit utilization ratio below 10%, and pay your bills within the given deadlines.

Among other ways of establishing credit, you should consider becoming an authorized user on another person’s credit card. Also, applying for a credit-builder card helps to build credit for new entrants into the credit market.