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CNBC Select

The best credit cards for building credit of July 2020

We analyzed 27 credit cards that are marketed toward consumers with no or poor credit to determine the best cards for building or rebuilding your credit.

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The Discover offers on this page are no longer available via CNBC. As a result, Discover offers described on this page may be out of date.

If you lack a credit history or have poor credit, opening a credit card can be a smart way to build or rebuild credit — as long as you practice responsible financial behavior.

While there are thousands of credit cards available, most require some sort of credit history in order to qualify. This can make it hard for people with less than stellar credit (typically, a credit score below 580), or no credit at all, to qualify for a card.

Secured credit cards are one of your best chances at qualifying for credit. They're similar to traditional cards (they extend credit, charge interest and may offer rewards) but require you to make a deposit (typically $200) in order to access a credit limit. Whatever amount of money you deposit becomes your credit limit. If you want a higher credit limit, you'll need to deposit more money.

Your security deposit acts as collateral if you fail to make payments. But don't worry about losing that money; your deposit is refundable if you pay your balance in full and close your account.

In addition to secured cards, there are some other credit card options for people with no credit or poor credit who don't want to — or are unable to — put down a deposit. While a credit card can be an easy way to build a strong credit history, you need to make sure you use it responsibly. After you open a credit card, make sure you spend within your means and pay your balance on time and in full.

CNBC Select analyzed 27 credit cards that are marketed toward consumers with no or poor credit to determine the best cards for building or rebuilding your credit. We considered a number of factors, including security deposit minimums, fees, rewards programs and APR. (See our methodology for more information on how we choose the best cards.)

Here are CNBC Select's picks for the top credit cards for building or rebuilding your credit:

Winner

Petal® Visa® Credit Card

Petal® Visa® Credit Card
Information about the Petal® Visa® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    1% cash back on eligible purchases and 1.5% after you make 12 on-time monthly payments

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    14.49% to 25.49% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    N/A

See our methodology, terms apply.

Pros

  • No credit history required (if you do have a credit history, that does factor into the credit decision)
  • No fees whatsoever
  • 1.5% cash back on eligible purchases after making 12 on-time monthly payments
  • Credit limits range from $500 to $10,000

Cons

  • Card isn't for rebuilding credit, but it's good for building credit
  • No special financing offers
  • No welcome bonus
  • Estimated rewards earned after 1 year: $249
  • Estimated rewards earned after 5 years: $1,577

Who's this for? The Petal® Visa® Credit Card, issued by WebBank Member FDIC is a unique card that takes a different approach to the credit card application process. Instead of judging your creditworthiness solely based on credit history, Petal may ask you to link bank accounts during the application process. Then, WebBank uses Petal's technology to analyze your bank statements and other data, such as bill payments and earnings, to determine your eligibility.

This is especially beneficial for applicants who may not have any credit history. However, if you do have a credit history, that does factor into the credit decision.

The Petal® Visa® Credit Card is one of the few cards that charge zero fees: no annual fee, no late payment fee and no foreign transaction fees. And it stands out for consumers trying to build credit because there's no security deposit required.

It also offers a rewards program with 1% cash back on eligible purchases, which can increase to 1.5% cash back after you make 12 on-time monthly payments. This is not only a nice perk, but a great way to encourage responsible behavior.

Runner-Up

Discover it® Secured

Discover it® Secured
  • Rewards

    2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter, then 1%); unlimited 1% cash back on all other purchases

  • Welcome bonus

    At the end of your first year, Discover automatically matches all the cash back you earned

  • Annual fee

    See terms

  • Intro APR

    See terms

  • Regular APR

    See terms

  • Balance transfer fee

    See terms

  • Foreign transaction fee

    See terms

  • Credit needed

    No credit history

*See rates and fees and our methodology, terms apply.

Pros

  • Discover automatically reviews your credit card account monthly, starting at eight months, to see if your security deposit can be returned while you continue to enjoy your card benefits
  • Strong cash-back rewards program
  • Simple welcome bonus with no minimum spending requirements

Cons

  • Low credit limit prevents cardholders from charging high-cost items or many expenses
  • You have to have a Social Security number and U.S. bank account to apply for this card
  • Discover isn’t as widely accepted as Visa and Mastercard

Information about the Discover it® Secured has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Who's this for? The Discover it® Secured gives cardholders access to many of the perks and benefits available to people with higher credit scores, including a robust cash-back program, no annual fee and no foreign transaction fees. You must put down a minimum deposit of $200 to open a Discover it® Secured, or as much as $2,500. Your credit limit is equal to your deposit.

Cardholders earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter (then 1%). Plus, you can earn unlimited 1% cash back on all other purchases. This card also comes with a welcome bonus: Discover will match any cash back you earn during the first 12 billing cycles. So if you have $100 cash back at the end of the first year, Discover will give you an additional $100.

What makes this card really stand out is the ease with which cardholders can transition to an unsecured card. Eight months after you open the card, Discover will review your account to see if you can get your security deposit back. This takes the guesswork out of wondering when you can transition to an unsecured card.

Best Low Deposit

Capital One® Secured Mastercard®

Capital One® Secured Mastercard®
Information about the Capital One® Secured Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
  • Rewards

    This card doesn't offer cash back, points or miles

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    26.99% variable on purchases and balance transfers

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    No credit history

See our methodology, terms apply.

Pros

  • No annual fee
  • $49, $99 or $200 refundable deposit
  • Get access to a higher credit line after making your first five monthly payments on time
  • No fee charged on purchases made outside the U.S.
  • Flexibility to change your payment due date

Cons

  • High 26.99% variable APR
  • No rewards program
  • After you apply and submit your deposit, it takes 2-3 weeks to get your card
  • Capital One periodically reviews your account to see if you can be transitioned to an unsecured card, but unlike the Discover it® Secured Card there’s no clear timeline for when this will occur

Who's this for? If you're looking for a secured card, but can't afford the typical $200 deposit, take a look at the Capital One® Secured Mastercard®. It has no annual fee and varying minimum security deposits of $49, $99 or $200 — based on your creditworthiness.

If you qualify, you can still access a $200 credit limit while only depositing $49 or $99.

In addition to lower security deposits, Capital One gives cardholders access a higher credit limit after you make your first five monthly payments on time. This is a great incentive to practice responsible card management.

Unlike the Discover it® Secured Card, there is no rewards program or welcome bonus. Capital One also doesn't offer a clear timeframe for when secured cardholders can upgrade to an unsecured account.

Best for International Applicants

Deserve® Classic Mastercard

Deserve® Classic Mastercard
Information about the Deserve® Classic Mastercard has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    23.99% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    N/A

See our methodology, terms apply.

Pros

  • No annual fee
  • U.S. citizenship is not required
  • No prior credit history needed
  • No security deposit required
  • No fee charged on purchases made outside the U.S.

Cons

  • No rewards or noteworthy perks
  • Relatively high APR

Who's this for? The Deserve® Classic Mastercard is a great choice for international applicants, since you don't have to be a U.S. citizen to qualify for this card. It's also good for anyone with zero or limited credit history who doesn't have the means to put down a security deposit. Plus, there's no annual fee.

On the downside, this card is pretty barebones. It doesn't offer any rewards program or welcome bonus. Deserve offers a handful of cardmember perks, including a $10 statement credit for Lemonade insurance if you pay for your renters insurance policy for three months with your card, and up to $600 in cell phone insurance.

Best for Students

Discover it® Student Cash Back

Discover it® Student Cash Back
Information about the Discover it® Student Cash Back has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    5% cash back in different categories (gas stations, grocery stores, restaurants, Amazon and more) each quarter, up to the quarterly maximum each time you activate. Plus, earn unlimited 1% cash back on all other purchases

  • Welcome bonus

    Discover automatically matches all the cash back you earned at the end of your first year

  • Annual fee

    See terms

  • Intro APR

    See terms

  • Regular APR

    See terms

  • Balance transfer fee

    See terms

  • Foreign transaction fee

    See terms

  • Credit needed

    No credit history

*See rates and fees and our methodology, terms apply.

Pros

  • Generous welcome bonus that doesn’t have minimum spending requirements
  • $20 Good Grade Reward when you maintain a 3.0 or higher GPA during the school year (for up to five consecutive years)

Cons

  • The cash-back program requires you to activate bonus categories in order to benefit from earning 5% cash back
  • Discover cards aren’t as widely accepted as cards from Mastercard or Visa
  • You must be a U.S. citizen and college student to apply for this card

Who's this for? Financial experts often stress the importance of building credit at a young age, and opening a credit card while you're a student is one of the easiest ways to establish credit. The Discover it® Student Cash Back card is our top pick for students looking to build good credit while attending college. You must be over 18 and a U.S. citizen to apply.

This card provides a cash-back program and student-centric benefits, such as an annual $20 statement credit when you maintain a 3.0 or higher GPA (valid for up to five consecutive years).

Upon activation, cardholders can earn up to 5% cash back on rotating categories, currently Amazon.com, Target and Walmart.com (from October 2019 to December 2019), up to a $1,500 maximum each quarter (then 1%). All other purchases earn 1% cash back.

This card has no annual fee and no foreign transaction fees, so you can study abroad or vacation outside the U.S. without worrying about paying the typical 3% fee other cards charge. There's also a 0% APR for the first six months on new purchases, which is perfect for financing textbooks or dorm room essentials. After the intro period, there's a 14.49% to 23.49% variable APR.

Best for Average Credit

Capital One® Platinum Credit Card

Capital One® Platinum Credit Card
Information about the Capital One® Platinum Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    26.99% variable

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    Good/Fair

See our methodology, terms apply.

Pros

  • No annual fee
  • No fee charged on purchases made outside the U.S.
  • Travel benefits, such as travel accident insurance, auto rental collision damage waiver and roadside assistance
  • Access a higher credit limit after making your first five monthly payments on time

Cons

  • 26.99% variable APR
  • No rewards program

Who's this for? If you have average credit and are looking to build up to a good or excellent credit score, it's a good idea to consider a credit card designed for average credit applicants, such as the Capital One® Platinum Credit Card. This card also provides travel benefits that can save you money and protect you against unexpected issues — most notably no foreign transaction fees.

This perk will save you the typical 3% fee many other cards charge on each purchase made outside the U.S. For example, the average American spends $2,154 a year on travel, and depending on how much of that is done abroad, you could potentially save up to $65 with the Platinum Credit Card from Capital One® (and even more depending on your travel spending habits).

This card also offers travel accident insurance, auto rental collision damage waiver, roadside assistance and 24-hour travel assistance services — all at no extra cost, though third-party service fees apply for roadside assistance. These perks are a great way to make traveling less stressful and provide you with coverage for eligible issues.

This card doesn't offer a rewards program, so you don't have the opportunity to earn cash back, points or miles from your everyday spending. But with no annual fee, it can be a good starter card if you want to eventually upgrade to another card in the Capital One family.

Learn more: What does it mean to be credit invisible?

Best credit cards for building credit

Category Credit Card
WinnerPetal® Visa® Credit Card
Runner-UpDiscover it® Secured
Best Low DepositCapital One® Secured Mastercard®
Best for International ApplicantsDeserve® Classic Mastercard
Best for StudentsDiscover it® Student Cash Back
Best for Average CreditCapital One® Platinum Credit Card

Our methodology

To determine which cards offer the best value for building or rebuilding credit, CNBC Select analyzed 27 of the most popular credit cards available for consumers building or rebuilding their credit.

We compared each card on a range of features, including: annual fee, minimum security deposit, credit limit, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also took into account how easy it is to upgrade the card from secured to unsecured and how quickly you can get your security deposit back.

Because it's unusual for credit cards aimed at consumers looking to build (or rebuild) their credit to have robust rewards programs, we did not analyze how many rewards points you can earn in the first year. For cardholders who are looking to rebuild credit, it's more important to practice good credit card habits — spending within your means, paying your balance on time and in full — than try to optimize your points balance.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.