4 best starter credit cards for people with limited or no credit history

While the most valuable credit cards available tend to be created for consumers with good or excellent credit scores, there are still plenty of options for those with a limited history — or even no credit history — who want to earn solid rewards for their purchases.

Below, CNBC Select reviews the best credit cards for people whose credit history is lacking, and the types of rewards and benefits they can expect to earn from each card.

Who's this for? The Discover it® Secured Credit Card stands out in that you don't need a credit score to apply and it offers a clear path to upgrading to a standard credit card. It also offers a solid cash-back program as well as a generous welcome bonus.

Because this is a secured credit card, you must put down a deposit of $200 to $2,500 in order to open your account and your credit limit is equal to this deposit amount. Then, starting with your seventh month of card membership, Discover will automatically review your account to see if you've paid all your bills on time each month. At this point, you may be able to transition to an unsecured line of credit and your deposit will be returned.

Who's this for? The Capital One Platinum Secured Credit Card (see rates and fees) is perfect for those who are looking for a secured card but don't want to put down a high deposit. The minimum security deposit amount you'll need to make varies at either a deposit as low as $49, $99 or $200 based on your creditworthiness. Regardless of which deposit amount you qualify for, you'll still have access to a $200 credit limit.

In addition to lower security deposits, Capital One automatically considers cardholders for a higher credit line within six months after you make your first five monthly payments on time. The only downsides to having this card: It doesn't provide any rewards-earning opportunities or additional cardholder benefits.

Who's this for? The Petal® 2 "Cash Back, No Fees" Visa® Credit Card, issued by WebBank, is ideal for those with no credit history since it can take into account a range of other factors such as bank statements and earnings to determine eligibility. If approved, you'll receive a credit limit of at least $300.

As its name suggests, this card doesn't charge you extra fees — you won't find any annual fees, late payment fees, foreign transaction fees or fees for going over your limit here. This card is also quite rewarding for its category.

Who's this for? The U.S. Bank Altitude® Go Visa® Secured Card stands out for being one of the most rewarding secured credit cards on the market. When redeemed, points are valued at 1 cent each, providing you with virtually 1% to 4% back on your purchases.

Cardmembers are also eligible for a $15 credit when they purchase annual streaming services such as Peacock and Spotify.

Note that while you're signing up for the card, you must put down a deposit of between $300 and $5,000, which essentially acts as your credit line. As long as you spend within your credit limit and pay your bill on time, there's a chance U.S. Bank could eventually upgrade you to the U.S. Bank Altitude® Go Visa Signature® Card.

Credit scores are calculated differently depending on the credit scoring model. Here are the key factors the two scoring models, FICO® Score and VantageScore, take into account when computing your credit score.

FICO® Score

1. Payment history (35% of your score): Whether you've paid past credit accounts on time.
2. Amounts owed (30%): The total amount of credit and loans you're using compared to your total credit limit — this is also known as your credit utilization rate.
3. Length of credit history (15%): The length of time you've had credit.
4. New credit (10%): How often you apply for and open new accounts.
5. Credit mix (10%): The variety of installment loans and revolving credit accounts you have, including credit cards, auto loans, mortgages and personal loans.

VantageScore

1. Extremely influential: Your payment history.
2. Highly influential: The type of credit, its duration and the percent of your credit limit used.
3. Moderately influential: Your total balances and debt.
4. Less influential: Any available credit amount, as well as recent credit behavior and inquiries.

Keep in mind that there may be additional factors besides your credit score that issuers might consider when determining your eligibility for a new card.

It is possible for those with no credit history to open credit cards and earn rewards for their purchases. In general, it is easiest to qualify for secured credit cards, which require you to make a deposit to access a credit limit. Though they don't always offer rewards, these types of cards do provide a path to an unsecured line of credit. There are also other starter credit card options that don't require putting down a deposit or adding a co-signer to sign up.

To determine which credit cards offered the best value for people with limited or no credit, CNBC Select analyzed the most popular options offered by banks, financial companies and credit unions that had requirements for low credit scores.

We compared each card's range of features, including the annual fee, rewards programs, introductory and standard APRs, balance transfer fees, welcome bonuses and foreign transaction fees, as well as other factors such as required credit scores and customer reviews, when available.

CNBC Select then worked with the location intelligence firm, Esri, whose data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. Read more about their methodology here.

Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953), which included items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, as well as other vehicle expenses.

When analyzing these cards, we did not calculate the estimated rewards a cardholder could earn. If you're a student or currently in the process of building (or rebuilding) your credit history, your focus should be on developing good financial habits — such as paying your balance on time and in full — and not optimizing the points you can earn.

For rates and fees of the Discover it® Secured Credit Card, click here.

Petal 2 Visa Credit Card issued by WebBank.

Information about the U.S. Bank Go Visa Secured, U.S. Bank Altitude® Go Visa Signature® Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

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