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10 Best Starter Credit Cards to Build Credit (2020)

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In this article, we review the 10 best starter credit cards to build credit. Using a starter credit card is an efficient way to create and build your credit profile.

Many consumers who’ve never used credit are candidates for these cards, including students and unbanked millennials. In addition, you can work to rebuild a low credit score by getting a starter credit card and using it responsibly.

These cards are easy to acquire and most offer cash back rewards. Whichever one you choose, resolve to pay your bill on time and limit the amount of available credit you use. By doing so, you can establish yourself as a creditworthy consumer with a good credit score and one who deserves access to loans and additional credit.

Best Overall
Students | Cash Back | Secured

The Capital One® Platinum Credit Card is our top choice for credit beginners. It is a no-frills card that is fairly easy to obtain.

It takes only a minute to find out whether you’re approved — just fill out a short application form with information about your employment status, annual income, and monthly mortgage/rent.

  • Pay no annual fee
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Fraud coverage if your card is lost or stolen
  • Use online banking to access your account, even from your smartphone, with our mobile app
  • Pay by check, online or at a local branch, all with no fee – and pick the monthly due date that works best for you
  • Get access to your account 24 hours a day, 7 days a week

N/A

N/A

26.99% (Variable)

$0

Average, Fair, Limited

The card charges no annual fee and provides $0 fraud liability. The minimum credit line is $300, but you may be able to access a higher limit by making your first five monthly payments on time.

Benefits include instant purchase notifications, free access to your credit score, instant card lock/unlock, and suspicious activity alerts.

College is a place to experience many new things, from wild to mild. In the latter category is getting your first credit card.

The following three cards are designed to give students access to credit without requiring a credit history or score. They all offer cash back rewards and charge no annual fees.

STUDENT RATING

★★★★★

4.9

  • INTRO OFFER: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.
  • Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.

0% for 6 months

10.99% for 6 months

14.49% – 23.49% Variable

$0

Fair/New to Credit

STUDENT RATING

★★★★★

4.8

  • INTRO OFFER: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.

0% for 6 months

10.99% for 6 months

14.49% – 23.49% Variable

$0

Fair/New to Credit

STUDENT RATING

★★★★★

4.8

  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • Enjoy no annual fee and no foreign transaction fees
  • Get a head start and build your credit with responsible use
  • Get Eno®, your Capital One® assistant, to manage your account via text, receive alerts, and shop safer online
  • Pick the monthly due date that works best for you
  • Get access to a higher credit line after making your first 5 monthly payments on time

N/A

N/A

26.99% (Variable)

$0

Average, Fair, Limited

The two Discover cards offer a Cashback Match on all cash back you earn in the first year after opening the account. We also like the Discover cards for their good-student rewards and an introductory six-month period of 0% APR on purchases.

Journey® Student Rewards from Capital One® encourages good financial habits by offering a higher cash back rate for the months you pay your bill on time. The card also rewards timely payments during the first five months of ownership by raising your credit limit.

The combination of easy acceptance and cash back rewards sets these cards apart, as you often have to choose between one factor or the other. Two of the cards (Capital One® QuicksilverOne® and Credit One Bank® Visa®) offer a flat cash back rate on all purchases, although the former offers a slightly higher rate.

CASH BACK RATING

★★★★★

4.7

  • Earn unlimited 1.5% cash back on every purchase, every day
  • Earn cash rewards without signing up for rotating categories
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Monitor your credit profile with the CreditWise® app, free for everyone
  • $0 fraud liability if your card is ever lost or stolen
  • No limit to how much cash back you can earn, and cash back doesn’t expire for the life of the account

N/A

N/A

26.99% (Variable)

$39

Average, Fair, Limited

CASH BACK RATING

★★★★

3.7

  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It’s a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can’t help you build a credit history.
  • Establish your credit line with your tax return by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score

N/A

10.99% for 6 months

24.49% Variable

$0

New/Rebuilding

CASH BACK RATING

★★★★

4.0

  • Qualified applicants will receive exclusive benefits such as 1% cash back rewards on all purchases, no annual fee, and a competitive APR. Terms apply.
  • Manage your account quickly and easily from your mobile device by using the Credit One Bank mobile app.
  • Use your Apple device to make purchases securely through Apple Pay®. Apple Pay is a registered trademark of Apple, Inc.
  • Your account is safeguarded against unauthorized charges with Zero Fraud Liability at no additional charge.
  • Take advantage of free online access to your Experian credit score and credit report summary so you can track the key factors impacting your credit health. Terms apply.

N/A

N/A

19.49% to 25.49% Variable

$0 – $99

Fair

Cash back may be the most useful reward for a wide swath of consumers with no credit histories. Most folks who prefer travel cards that provide mile or point rewards already have credit cards (and credit histories), considering how hard it is to travel without a credit card.

Certainly, cash back cards give you the most flexibility. It’s nice to earn cash back when you’re buying groceries and gas, as it acts as an automatic discount without the need to clip coupons.

Of course, you’ll only truly reap the benefits of cash back — or any credit card rewards — if you pay your total balance off each month. This prevents interest charges that will negate the value of any rewards earned from accruing.

Secured credit cards are among the easiest to obtain as long as you can afford to make the required cash deposit. You should prefer your deposit to be FDIC-insured and earning interest.

SECURED RATING

★★★★★

4.9

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
  • Make the minimum required security deposit and you’ll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app

N/A

N/A

26.99% (Variable)

$0

Limited, Bad

SECURED RATING

★★★★★

4.5

  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It’s a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can’t help you build a credit history.
  • Establish your credit line with your tax return by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score

N/A

10.99% for 6 months

24.49% Variable

$0

New/Rebuilding

SECURED RATING

★★★★

4.0

  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.

N/A

N/A

19.14% (variable)

$35

No credit check

We like the Capital One® Secured Mastercard® because you may need to only deposit as little as $49 to get the card.

The minimum deposit required by the Discover it® Secured is $200, however, you earn handsome cash back rewards and you can convert to an unsecured card with responsible use.

The OpenSky® Secured Visa® also requires a minimum deposit of $200, but unlike the other cards, it doesn’t require you to have a bank account and you won’t have to undergo a credit check for approval.

The OpenSky® Secured Visa® appeals to the millions of unbanked consumers who’d rather not deal with banks. However, it’s the only card in the trio that has an annual fee, albeit a small one.

Secured cards are the easiest to acquire because your cash deposit acts as collateral. However, all the reviewed cards approve applicants with no or scant credit history, so you may not need a secured card unless your credit is already bad.

The size of the security deposit generally determines your credit line. Some cards, like the Capital One® Secured Mastercard®, may allow you to make a deposit that is less than your issued credit line, depending on your credit. This is known as a “partially” or “semi” secured credit card.

Unsecured vs Secured Credit Cards

The issuer maintains your deposit in a locked account that covers missed or late payments. This reduces the riskiness of these cards, which enables lenders to offer reasonable APRs and approve applicants with unestablished or bad credit histories.

Most secured cards provide a path to upgrade to an unsecured card if you consistently pay your monthly bill on time. The OpenSky® Secured Visa® doesn’t perform credit checks for approval, nor does it require you to have a bank account. That’s great for unbanked consumers new to credit cards.

The student credit cards are also easy to get if you’re enrolled in a two- or four-year school. You don’t need to have a credit history or score, and these cards offer surprisingly generous rewards.

The 10 cards in this review all give you the opportunity to obtain a credit card even if you have no credit history. But you have additional options that will unlock access to a credit card:

  • Ask to be an authorized user on another person’s credit card. As an authorized user, you can use the card as if it were your own, but you are not obligated to make payments — that honor falls to the primary cardholder. The credit bureaus will record payments on both your and the primary cardholder’s credit reports, giving you the opportunity to establish and build your credit through responsible use.
  • Recruit a cosigner when applying for the card. Doing so means that you and the cosigner jointly own the card. As was the case for authorized users, payments are recorded on the credit reports of both parties. In this case, however, both you and the cosigner are responsible for ensuring the monthly payments are made. Naturally, you’d like to have a cosigner with a good credit score, as this will increase your chances of approval.
  • Get a credit builder loan. These are offered by many credit unions and some other lenders. With a credit builder loan, you borrow a sum of money that is held in a bank account. You then make payments on the loan that are reported to the credit bureaus. Once you fully repay the loan, the money is released to you — you now have your money back (with interest) and a credit history.

Of course, if you are in a position to do so, you can apply for a mortgage or car loan. This will establish your credit profile and make it easier to get a credit card, assuming you make your payments on time.

We give top marks to the Capital One® Platinum Credit Card, as it charges no annual fee and most folks with no credit history will qualify.

Capital One®Secured MastercardHowever, it offers Spartan benefits (no rewards or introductory 0% APR offers) and a limited credit line. Nonetheless, if you want to establish your credit with a minimum of hassles, this card is our recommended choice.

If you happen to be a student, we suggest you get one of the three student credit cards we recommend. All three are easy for students to obtain, charge no annual fees, and offer cash back rewards.

Discover it® Student Cash Back Our favorite is the Discover it® Student Cash Back card. It is very similar to the Discover it® Student chrome card, except for its more generous rewards scheme — limited 5% cash back on purchases at quarterly rotating merchant categories that you must activate each quarter.

Capital One® QuicksilverOne® Cash Rewards Credit CardThe Capital One® QuicksilverOne® Cash Rewards Credit Card is our recommendation among the cash back cards, due to its ease of approval, unlimited cash back reward rate, and access to higher credit limits through responsible use.

If you are new to the world of credit, be aware that the most popular credit scoring system is called FICO and has a range from 300 (worst possible score) to 850 (exceptionally good score). The average FICO score in the U.S. is just over 700.

FICO Score® Ranges

It takes about six months of credit card use or loan repayments to establish a credit score. Actually, you get three credit scores, one from each of the major credit bureaus — Experian, Equifax, and TransUnion.

Your credit card issuer reports your payment activity to one or more of the credit bureaus. Over time, the bureaus receive enough information to formulate a starting score.

Many factors go into that score. If you use your card responsibly, you should expect an average beginning credit score.

FICO Credit Score Factors

Based on the above credit score factors, responsible credit card use entails:

  • Paying your bill on time, every time, without exception.
  • Maintaining a credit utilization ratio (i.e., amounts owed / total available credit) below 30%.
  • Having a mix of credit and loan accounts.
  • Having a long credit history (i.e., not closing old accounts just because you no longer use them).
  • Not applying for too many accounts at the same time.

Through continued responsible use, your credit score might climb into the good or excellent range. This usually requires you to maintain several credit accounts of various types.

On the other hand, if your credit habits are sloppy, you can expect your credit score to sink into fair or poor territory. This can raise the interest rate you’re charged and limit your access to additional credit.

Having no credit is actually better than having bad credit. With no credit, you have a clean slate. By using your first credit card responsibly, you can establish an average credit score and work your way toward a higher score.

If you already have bad credit, you’re in a hole from which you must emerge. That’s harder to do, especially if your bad credit is due to one or more derogatory marks on your credit reports.

When you get your first card, you should make sure it reports your payments to one or more credit bureaus — not all cards do. For example, a prepaid card is easy to obtain, but this kind of card doesn’t report payment activity.

That’s also true of debit cards — except if you are overdrawn and fail to correct the problem quickly, at which point you may be dinged on your credit report. In other words, debit cards can only hurt your credit score.

Other types of accounts may not appear on your credit reports. These include accounts such as rent, cable services, utilities, and water.

However, a free product called Experian Boost automatically incorporates your phone and utility account payments into your Experian credit report, giving your score a modest boost.

Most folks eventually take the plunge and obtain a credit card. The 10 cards in this review all make it easier to get your first card and thereby establish your credit profile.

Use your first card to establish responsible habits that will help you build a good credit score. A good score can improve your lifestyle by allowing you to make purchases without waiting to save up the cash.

Once you have a good credit score, you can qualify for premium credit cards that offer copious rewards and benefits.



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Bad Credit

What Is A Thin Credit File?

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The size of your credit file is important when it comes to applying for any type of loan. A credit file shows you have a proven track record of repayment and can be trusted with a line of credit. If you’ve recently been told you have a thin credit file, you can take steps to build it. Let’s explore what a thin credit file is and how to improve it.

Definition of Thin Credit File

A thin credit file is one with a limited number of credit accounts. For instance, if the only line of credit you’ve ever had is one car loan, that would be considered a thin credit file. Most lenders consider a portfolio of four or less accounts to be ‘thin.’

If you have no credit history at all, you are considered ‘credit invisible.’ This means that you have nothing positive or negative on your credit report. Invisible credit is still considered a thin credit file.

Common Reasons for Having a Thin Credit File

Young adults typically have thin credit files because they have not yet had time to build credit. Some parents have begun adding their teenagers as authorized users to their credit accounts to help build their children’s credit files before they turn 18. This gives teens an opportunity to start adulthood with a positive credit score, especially when coupled with proper financial education. As many as 17% of preteens in America are authorized users on their parents’ credit card accounts.

Being young isn’t the only reason one may have a thin credit file. If you’ve had little need or desire for a line of credit, you may not have any accounts on your credit history. If most of your credit is from several years ago, you may have a thin credit file now. Accounts fall off your credit reports after seven years. That means someone with a formerly ‘fat’ credit file could have a thin file after years of inactivity.

Immigrants may also have a thin credit file when coming to the United States, even if their credit was strong in their home country. This is because the U.S. measures credit differently than other countries, and the data is not usually transferable. American Express
AXP
recently collaborated with Nova Credit to alleviate this issue. American Express can access credit reports from select countries and create a U.S.-equivalent credit score. This information is used to approve credit card applications from international applicants.

The Downside of Having a Thin Credit File

Having a thin credit file may make it difficult to receive credit in the future. A home loan, credit card, personal loan, or other form of borrowing may be denied due to a lack of credit history. You may not need a line of credit now, but what about five years from now? It can take years to build a solid credit portfolio. If you take those steps now, you may have credit available when you need it most.

Is Thin Credit Bad Credit?

It’s important to distinguish between thin credit and bad credit. Bad credit refers to a delinquency in payments or other negative mark on a person’s credit report. Thin credit is a lack of credit accounts, whether the payments made were on-time or otherwise. A person can have good credit or bad credit with a thin credit file. A person with bad credit may have a robust credit file. The two terms do not always go hand-in-hand.

How to Build Your Credit Portfolio

Want to make your thin credit file a little fatter? Here are some steps that may help:

  • Start with a small line of credit. This could be something like a secured credit card, an entry-level credit card, a student credit card or a small personal loan. Approximately 38% of consumers use credit cards to become credit visible. Make sure the line of credit will report to all three credit bureaus, and make your payments on time each month.
  • If you already have a credit card, use it! Put all your daily purchases on the credit card, and pay off the entire balance at the end of the month. This will show consistent credit history, and could lead to a larger credit limit in the future.
  • Diversify your credit portfolio. If you have a car loan and nothing else, apply for a low interest credit card. The goal is to make your credit history diverse so lenders can see your true credit worthiness.
  • Avoid applying for everything at once. You want a diverse credit file, but you don’t want to look desperate. Once you establish a new line of credit, wait about six months before applying for a new one. Building credit takes time.
  • Get help from someone with good credit. You could do this by becoming an authorized user on their credit account or by having them co-sign on a line of credit with you. Keep in mind that missing a payment or racking up an unexpected bill will negatively impact both their credit and yours. Only agree to this if you can commit to the payments.
  • Check your credit reports for existing accounts. If you have old debts or anything in collections, pay them off to revitalize your credit. This creates a solid foundation for a portfolio of positive accounts.

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Citi Secured Mastercard Review | NextAdvisor with TIME

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We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Citi® Secured Mastercard®

Citi® Secured Mastercard®

  • Intro bonus: No current offer
  • Annual fee: $0
  • Regular APR: 22.49% (Variable)
  • Recommended credit score: (No Credit History)

The Citi Secured Mastercard is a good starter card option for consumers with no credit history. You can use this secured credit card — which Citi reports to each of the three credit bureaus — to improve your credit score while making timely payments and practicing other credit-building habits like keeping a low credit utilization rate and paying balances in full each month. To get started, you’ll need to put down a cash deposit of at least $200 after approval. The amount you chose to deposit will serve as your new card’s credit limit.

At a Glance

  • Establish credit use and payment record with limited or no credit history 
  • No annual fee
  • Security deposit between $200 and $2,500 required
  • Standard variable APR of 22.49%

Pros

  • Available to individuals with little or no credit history

  • No annual fee

  • Payment reported to all three credit bureaus

Cons

  • High penalty and cash advance fees

  • High variable APR

  • No rewards

Additional Card Details

The Citi Secured Mastercard is a secured credit card that comes with fewer benefits than other conventional cards. Secured credit cards are primarily credit-building tools for people with limited or negative credit histories, so they’re more useful for building good habits than reaping benefits and rewards. But you will get the chance to pick your own credit card due date and online access to your FICO credit score to help monitor your progress over time.

Another Citi feature is account alerts, which you can set up to notify you when a purchase is made using your Citi Secured Mastercard, when payment is due, and more. Plus, you’ll get access to Citi Identity Theft Solutions, which can help resolve issues like a stolen card or  compromised personal information so it doesn’t negatively affect your credit. 

Should You Get this Card?

The Citi Secured Mastercard is a solid credit-building option for anyone with limited or no credit history. It’s also a good option for repairing damaged credit, but you may have more difficulty qualifying with a bad credit history than those starting from scratch. Citi specifies that applicants must meet certain credit qualification criteria, including no pending bankruptcies or bankruptcy within the past two years and review of the information you submit when applying.

Since it’s a secured credit card, you will be required to make a security deposit between $200 and $2,500 (this amount acts as your credit limit), but unlike some credit-building cards, there’s no annual fee. 

Secured credit cards can be a useful tool, offering the chance to build credit and improve your creditworthiness over time. And when your secured credit card is closed in good standing or you upgrade to an unsecured card, you’ll receive your security deposit back.

How to Use the Citi Secured Mastercard

When you sign up for the Citi Secured Mastercard, you’ll be asked to put down a cash deposit of at least $200 (you must provide your bank information for this deposit within 14 days of approval). This amount will also be your credit limit. If you put down $200 in cash, you’ll have a $200 credit limit, while a $600 deposit equals a $600 credit limit, and so on.

It’s important to choose your deposit amount wisely, because your credit limit can impact your credit utilization, one of the main factors in your credit score. If you only put down a $200 deposit, and you spend up to that limit each month, you’ll carry an extremely high utilization rate, which can hold down your credit score. Experts recommend keeping a utilization rate under 30%, and ideally under 10%, for the best credit results. In other words, keep your total charges under 30% of your available credit. Put another way, if you can put down a $1,000 security deposit, you’ll be able to spend $300 on your card each month and maintain a good utilization rate.

Once your new account is set up, begin using your Citi Secured Mastercard like a debit card. Only charge purchases you can afford to pay off each month, and make sure you always pay your bill in full and on time. This will help boost your credit score each time Citi reports your activity to each of the three credit bureaus (Experian, Equifax, and TransUnion). 

Pro Tip

Secured credit cards are great tools for building credit with no credit history or repairing a damaged credit score. With any credit card (including secured cards) remember to practice smart credit habits that can benefit your credit score over time, like paying your balance in full and on time each month and spending only what you can afford to pay when your statement is due.

You should also avoid any of the high fees that come with this card. If you pay late, for example, you’ll incur a fee up to $40 and may even take on a penalty APR up to 29.99% (compared to the already high 22.49% regular APR). 

If you’re worried you’ll forget about your payment due dates, you can use Citi’s free account alerts to get updates when you make a purchase, when you’re close to your credit limit, and when you need to make a payment.

Citi Secured Mastercard Compared to Other Cards

Citi® Secured Mastercard®

Citi® Secured Mastercard®

  • Intro bonus:

    No current offer

  • Annual fee:

    $0

  • Regular APR:

    22.49% (Variable)

  • Recommended credit:

    (No Credit History)

  • Learn moreexterna link icon at our partner’s secure site
Capital One QuicksilverOne Cash Rewards Credit Card

Capital One QuicksilverOne Cash Rewards Credit Card

  • Intro bonus:

    No current offer

  • Annual fee:

    $39

  • Regular APR:

    26.99% (Variable)

  • Recommended credit:

    (No Credit History)

  • Learn moreexterna link icon at our partner’s secure site
BankAmericard® Secured Credit Card

BankAmericard® Secured Credit Card

  • Intro bonus:

    No current offer

  • Annual fee:

    None

  • Regular APR:

    22.99% Variable

  • Recommended credit:

    (No Credit History)

  • Learn moreexterna link icon at our partner’s secure site

Bottom Line

EDITORIAL INDEPENDENCE

As with all of our credit card reviews, our analysis is not influenced by any partnerships or advertising relationships.

A secured credit card could be the tool you need to jumpstart your credit journey. With no annual fee and a minimum deposit amount starting at just $200, Citi Secured Mastercard is a solid option to consider. Over time, the Citi Secured Mastercard can help you increase your credit score and build valuable credit history. With enough time and solid credit habits under your belt, you can upgrade or switch to an unsecured credit card with high-value rewards and perks in the future.

Frequently Asked Questions

Citi Secured Mastercard is a good credit-building option for consumers with limited credit history. There are no rewards or added benefits, but this card can help you establish a solid credit foundation for no annual fee.

If you are able to prove your creditworthiness and your credit score by establishing a history of timely payments in full, you may be able to upgrade your Citi Secured Mastercard to an unsecured Citi credit card. Once you’ve established a solid credit history, you may also qualify for great credit cards from any issuer offering perks and benefits that match your spending.

You may be able to increase the limit in your secured credit card by putting down a larger deposit as collateral. Call Citi using the number on the back of your credit card to see if you’re eligible.

*All information about the Citi Secured Mastercard has been collected independently by NextAdvisor and has not been reviewed by the issuer.

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The Benefits of Buying a New Car With Bad Credit

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If you have bad credit, it can be difficult to qualify for an auto loan on a new vehicle. It’s not impossible, though, and there are even some benefits to buying a new car in the long run. But, if you have your sights set on a brand new set of wheels, there are a few things you should keep in mind.

Are There Benefits to Brand New Cars?

Getting a new car can be exciting! They typically come with all the bells and whistles: latest colors, styles, and trim levels, infotainment systems, and technology. Brand new vehicles may also come equipped with more standard options than their used predecessors did – in comfort, convenience, and safety.

There are benefits to buying a new car if you can afford it, even with bad credit. Mostly the benefit comes in the form of standard safety features, and overall vehicle performance. In many cases, new cars have less risk for major damage from wear and tear and may go a long time without costly repairs.

But all these benefits come at a price.

Many times, those prices can be tough to swallow if you’re a borrower with bad credit. Not only is it harder to get approved for financing with a lower credit score, but it can also be more difficult to find a lender willing to give you a large loan. With the prices of vehicles these days, it may take a little legwork, and a large down payment to get into the new car you want with bad credit.

New Cars and Poor Credit

The average price of a brand new vehicle rose to over $36,000 in 2020, and it’s the second-largest expense for most Americans behind a home. Since many can’t typically shell out that much cash at once, most people turn to auto financing.

If you have good credit you’re more likely to qualify for preapproval from a direct lender such as a bank or credit union. You may also have an easier time getting a loan with a captive lender through an automaker.

With a lower credit score, it can still be a good idea to try for preapproval, and this may be less difficult if you’re a member of a credit union. They tend to offer lower interest rates and special deals to their members. If you don’t belong to a credit union or aren’t able to qualify for preapproval due to your credit score, you’re not out of luck.

If you don’t qualify for preapproval, and can’t afford to buy a car with cash, bad credit borrowers are left to finance through a subprime lender or with an in-house financier. And, this makes it harder to finance a new car. In fact, in-house financing only deals with used vehicles.

Finding a Middle Ground Between New and Used

When you need to get a bad credit auto loan, there’s still a chance that you can get a new car, but there’s a better chance of qualifying for a gently-used car, instead of a brand new car. A good compromise can be a certified pre-owned (CPO) vehicle. CPO cars are typically only a few years old, have likely only had one owner, or may have just come off lease.

The Benefits of Buying a New Car With Bad CreditThese vehicles can offer you the peace of mind of a new car, including a manufacturer-backed warranty, but without the high price tag found on brand new vehicles. They also tend to have fewer miles and more new safety and technology features than a used car that’s sold as-is.

Vehicles that are sold as-is typically go straight from the previous owner to a dealer’s lot with little more done than a spit and shine to make it ready for sale. A CPO car, on the other hand, is given a rigorous multi-point inspection and refurbished by a manufacturer-certified technician.

The good news is that a CPO can be easier to qualify for with a poor credit score than a brand new car, even if you’re working with a subprime lender.

Getting a Car Loan With Bad Credit

To give yourself the most car loan opportunity, it’s a good idea to stick with financing through a subprime lender that’s ready to work with bad credit borrowers. Not all lenders can finance a bad credit auto loan, but we know where to find the ones that can.

At Auto Credit Express, we’ve cultivated a coast-to-coast network of special finance dealerships that are signed up with the lenders you’re looking for. With our assistance, you can be on the path to your next auto loan without the hassle of searching for a lender on your own. There’s never any obligation to buy, and our auto loan request form is fast and free to fill out. Stop waiting to get the bad credit car loan you need – get started right now!

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