Building Credit Starter Rewards Cards

Building Credit? Starter Rewards Cards
Building Credit? Starter Rewards Cards

Building Credit? Starter Rewards Cards

When you’re just starting to establish credit, starter credit cards help build your credit history through responsible use. The best starter cards report to all three bureaus and have low credit limits to

minimize risk. Some even offer cash back or points.

In this guide, we’ll highlight starter credit card options that provide rewards along with credit profile building capabilities. We’ll look at rewards rates, fees, and graduation pathways with each card.

Let’s review top starter rewards cards that set you up for long-term financial success.

How Starter Credit Cards Work

Starter credit cards help consumers with limited or no credit history establish positive behaviors by providing:

  • Low credit limits from $200 to $500 to minimize overspending risk
  • Reporting payment history to all three credit bureaus (Equifax, Experian, TransUnion)
  • Educational resources and tools for cardholders
  • Opportunity to earn rewards through on-time payments
  • Potential graduation to better rewards cards over time

Building credit responsibly is crucial. Now let’s explore starter card options that provide rewards on top of credit profile development.

Deserve® EDU Mastercard for Students

  • 1% cash back on all purchases
  • No annual fee or foreign transaction fees
  • Eligible purchases and payments support philanthropic causes
  • Credit limits starting at $300
  • Cashback matched after completing your first year

The Deserve EDU Mastercard helps students build responsible habits and give back through rewards.

Capital One Platinum Secured Credit Card

  • 2% cashback on dining and entertainment purchases
  • 1% back on other purchases
  • No annual fee or foreign transaction fees
  • Refundable $49, $99, or $200 security deposit
  • Starting credit limit equals security deposit amount
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With no annual fee, Capital One’s Platinum Secured card helps securely build credit through thoughtful use.

Bank of America Customized Cash Rewards

  • 3% cash back in a customizable category like gas, online shopping, etc
  • 2% back at grocery stores and wholesale clubs
  • Unlimited 1% back on other purchases
  • $0 annual fee
  • Reports to all 3 bureaus

Bank of America provides a robust cashback structure for first-time credit users looking to maximize rewards.

Citi Secured Mastercard®

  • 2% cash back at gas stations and grocery stores for the first $1,000 per year
  • 1% back on other purchases
  • $0 annual fee
  • $200 minimum security deposit required
  • Easy online credit score access

Citi’s Secured Mastercard requires only a modest deposit to establish positive credit behaviors.

Petal® 2 Visa® Credit Card

  • 1% – 1.25% cashback after 6 months of on-time payments
  • 0.5% cashback during first 6 months
  • No fees or interest charges
  • $0 security deposit required
  • Ideal for those with limited credit history

Petal helps establish your credit through simple cashback bonuses that grow as you demonstrate responsible account management.

What is Credit Building?

Credit building involves establishing positive behaviors including:

  • Making at least minimum payments on time
  • Keeping balances well below limits to lower credit utilization
  • Applying for and opening new accounts responsibly over time
  • Avoiding missed payments or having accounts sent to collections
  • Monitoring your reports routinely and disputing errors immediately

Give your profile time to reflect changed habits after past issues. Rome wasn’t built in a day.

Tips for First-Time Credit Users

Those new to using credit should:

  • Only charge what you can pay off monthly to avoid carrying balances
  • Pay your bill on or before the due date
  • Set up automatic payments and account alerts for key dates
  • Avoid cash advances which accrue interest immediately
  • Check your credit score frequently through free sites
  • Keep balances as low possible by making payments early
  • Contact issuers immediately with financial difficulties
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Bad habits form quickly. Preemptively take measures to set yourself up for credit success.

Transitioning to Standard Credit Cards

With responsible use of a starter card, issuers may graduate you to unsecured cards with:

  • Higher credit limits
  • Lower APRs
  • Richer rewards potential
  • Notification by mail inviting you to apply for a new card
  • Credit reevaluation after 12 months of diligent payments
  • Option to accept or decline graduation if offered

Don’t accept more credit than you genuinely need.

Closing Starter Credit Accounts

Ideally, keep your first credit accounts open long-term. But know when to close newer ones:

  • After graduating to better rewards cards over time
  • If the starter card begins charging an annual fee
  • If the card tempts overspending and hurts your credit
  • When you have multiple unsecured cards established

Avoid closing your very first card since this anchors your credit history length.

Final Thoughts on Starter Credit Cards

The right beginner credit card tailored for first-time borrowers can help securely establish positive financial behaviors. Look for cards with cashback or rewards that encourage responsible usage without tempting overspending.

Monitor your credit reports and scores routinely to ensure accounts report properly. With diligent card management early on, you’ll graduate to premium rewards and benefits in no time.

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