6 best starter credit cards of July 2024

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 limited or no credit history who want to earn solid rewards for their purchases.

Below, CNBC Select reviews the best starter credit cards for people whose credit history is lacking, and the types of rewards and benefits they can expect to earn from each card. (See our methodology for information on how we chose the best starter credit cards.)

Who's this for? The Discover it® Secured Credit Card is a good fit if you have a low credit score and want to earn cash back while building your credit.

Standout benefits: Because this is a secured credit card, you must put down a deposit of $200 to $2,500 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 credit card and your deposit will be returned.

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Who's this for? The Capital One Platinum Secured Credit Card is perfect if you want 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 a deposit as low as $49, $99 or $200 based on your creditworthiness.

Standout benefits: In addition to lower security deposits, with the Capital One Platinum Secured you'll be automatically considered for a higher credit line within six months after you make your first five monthly payments on time. Plus, regardless of which deposit amount you qualify for, you'll still have access to a $200 credit limit.

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Who's this for? The Petal® 2 "Cash Back, No Fees" Visa® Credit Card is ideal if you want to avoid many of the common credit card fees and take advantage of a robust cash-back program at the same time.

Standout benefits: 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 returned payment fees. The Petal 2 Visa Card is also quite rewarding for its category, with the option to earn up to 1.5% on all purchases.

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Who's this for? The U.S. Bank Altitude® Go Visa® Secured Card is great if you like to dine out as it earns a generous 4X points on dining, takeout and restaurant delivery, which compares favorably to the best credit cards for dining.

Standout benefits: You can get an up to $15 annual statement credit toward streaming services such as Peacock and Spotify. To earn the credit, you need to make 11 consecutive monthly payments for an eligible streaming service.

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Who's this for? The Capital One SavorOne Student Cash Rewards Credit Card is a good fit for college students because of its high cash-back rates in useful spending categories like groceries and dining.

Standout benefits: You'll earn 10% cash back on Uber and Uber Eats purchases (through Nov. 14, 2024) and 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart and Target).

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Who's this for? The Bank of America Business Advantage Unlimited Cash Rewards Secured credit card is geared toward small business owners who want to build their credit and earn rewards along the way.

Standout benefits: With this card, you'll earn 1.5% cash back on every purchase. This is a solid rate of return for a no-annual-fee business card.

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The Discover it® Secured Credit Card is an easy-to-get credit card and it provides a path for upgrading to an unsecured credit card.

Rewards

• 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
• 1% cash back on all other purchases

Welcome bonus

Discover will match the cash back you earn during the first year with no minimum spending requirement or cap on the match.

Annual fee

$0

Notable perks

To open a Discover it Secured Card, you'll need to make an upfront refundable deposit of at least $200. Your credit limit is based on your deposit, and you can increase it to boost your spending limit. After seven months, your account will automatically be reviewed and you may be able to switch to an unsecured credit card and get your deposit back at that time.

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The Capital One Platinum Secured Credit Card is an accessible secured credit card because of its low deposit requirement and no annual fee.

Rewards

None

Welcome bonus

None

Annual fee

$0

Notable perks

Depending on your credit, you need a starting deposit of $49, $99 or $200 to open this card. If you want a higher credit limit, you can bump that deposit to as high as $1,000. When you consistently make on-time payments, you can be considered for a credit line increase in as little as six months. You'll also have a path to upgrading to an unsecured Capital One Platinum Credit Card and having your security deposit refunded.

This card has no foreign transaction fees.

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The Petal® 2 "Cash Back, No Fees" Visa® Credit Card lacks many common credit card fees and provides a path to earning a high flat-rate return comparable to many of the top cash-back cards.

Rewards

• 1% cash back on all purchases (earn up to 1.5% cash back on all purchases after you make 12 on-time monthly payments)
• 2% to 10% cash back at select merchants

Welcome bonus

None

Annual fee

$0

Notable perks

The option to earn up to 1.5% cash back everywhere would be worth considering even if you didn't need a credit score to qualify for the card. You can get an even higher return at select merchants through personalized cash-back offers.

Another nice feature of this card is how few credit card fees it has, which means the cash back you earn can go straight to your pocket. It has no annual fees, no foreign transaction fees, no returned payment fees and no late payment fees.

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The U.S. Bank Altitude® Go Secured Visa® Card is one of the most rewarding secured credit cards.

Rewards

• 4X points on dining
• 2X points on streaming services
• 2X points at grocery stores (discount stores/supercenters and wholesale clubs excluded effective Sept. 9, 2024)
• 2X points at gas stations/EV charging stations (discount stores/supercenters, grocery stores and wholesale clubs excluded effective Sept. 9, 2024)
• 1X points on all other eligible purchases

Welcome bonus

None

Annual fee

$0

Notable perks

To sign 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.

After making 11 consecutive monthly payments for an eligible streaming service, you'll receive a $15 statement credit. Eligible services include Netflix, Hulu, Apple Music and more.

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The Capital One SavorOne Student Cash Rewards Credit Card is a no annual fee student card that offers rewards on par with many of the top rewards credit cards.

Rewards

• 10% back on Uber and Uber Eats purchases (through Nov. 14, 2024)
• 8% back on Capital One Entertainment purchases
• 5% back on hotels and rental cars booked through Capital One Travel
• 3% back on dining, entertainment, popular streaming services and grocery stores (excluding superstores like Walmart and Target)
• 1% back on all other purchases

Welcome bonus

New cardholders can earn $50 when they spend $100 in the first three months.

Annual fee

$0

Notable perks

The Capital One SavorOne Student Cash Rewards Credit Card has no foreign transaction fees and you pay no annual fee. On top of the additional cash back for Uber purchases, you'll also get Uber One membership credits (worth $9.99) each month through Nov. 14, 2024. With this card, you'll also have access to extended warranty coverage* on eligible items and travel accident insurance*.

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The Bank of America Business Advantage Unlimited Cash Rewards Secured credit card can help you build your credit and offers an excellent rewards rate on top of that.

Rewards

• 1.5% cash back on eligible purchases

Welcome bonus

None

Annual fee

$0

Notable perks

To open this card, you'll need to make an upfront deposit of at least $1,000, and your credit limit equals the amount you deposit. You'll also get access to your Dun & Bradstreet business credit score for free, so you can monitor your credit as you're strengthening it.

This card's other benefits include rental car insurance, emergency ticket replacement and lost luggage assistance.

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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.

Having and using a credit card can help you build your credit profile in several ways because credit card account activity is reported to the major credit bureaus, including Experian, Equifax and TransUnion.

Just having a credit card is a good way to start your credit journey because how long you've had access to credit is part of your credit score. However, the length of your credit history isn't the biggest part of your credit score. To build and maintain a healthy credit score, you'll want to consistently pay on time and in full.

Pay on time

Your credit score is designed to show a potential creditor how likely you are to repay the money it lends you. A big part of the calculation is your payment history. One of the best ways to boost your score and maintain a high score is to always pay your bills on time. Paying your monthly credit card bill on time once or twice may not have a huge impact on your credit score, but over time those payments will add up.

Pay off your balance in full

How much debt you have and how much of your total available credit you use factor heavily into your credit score. Paying your full credit card balance off each month will help improve your credit score. This is partly because it will help you keep a low credit utilization ratio. Your credit utilization ratio is based on how much of your available credit you're using, and it's generally recommended to keep it below 30%.

Whether you should get a credit card depends on your situation. Opening a credit card can make sense if you want to build credit, earn rewards to put toward your next vacation or save on interest with an intro 0%-APR offer. However, if you won't be able to pay off a new credit card each month or you plan on applying for new credit soon (i.e. a mortgage or loan), then you may want to hold off on getting a credit card.

When it makes sense to get a credit card

Opening a credit card can be a good way to establish credit or to begin rebuilding your credit score. There are plenty of credit cards available even if you have bad credit.

If you're working your way out of credit card debt, a card with an intro APR offer could help you save on interest. These cards may provide interest-free periods of up to 21 months, which can give a significant boost to your debt pay-off strategy.

For those with good to excellent credit, opening a new travel card is a great way to earn rewards to put toward future travel. These cards can also come with built-in travel protections that can protect your luggage or reimburse you when your trip is interrupted or canceled.

When you should wait to get a credit card

If you tend to overspend on credit cards, opening a new card may not be the best option for you. Using a debit card may be a better option for helping you stay within your budget.

Applying for a credit card will typically result in a hard inquiry on your credit report, which will temporarily reduce your credit score. This makes it a good strategy to hold off on applying for credit cards if you will be applying for credit shortly. If you plan on buying a house or taking out an auto loan, you probably want to hold off on getting a new credit card for at least six months.

When you're applying for a credit card, the issuer will want to verify your identity, review your credit and know how much money you make. Credit card applications can vary slightly from one issuer to the next or depending on the type of credit card, but in general, you'll need the following information:

• Personal details (name, address, phone number, email, date of birth)
• Income
• Debt
• Social Security Number
• Job status

A credit card application may also ask other questions such as whether you own or rent a home, your monthly housing payment and if you have a checking account, savings account or both.

Bank-specific application rules

Depending on which bank or card issuer you are applying to, there may be other rules to navigate. Credit Unions typically require you to be a member of that Credit Union to get any of its cards. Joining a credit union may require a professional affiliation, association with the military or it could be as simple as opening a savings account with that credit union.

With other banks, it may be more difficult to get a card depending on how many credit cards you've opened in the past or what specific cards you've had. Chase has the 5/24 rule and it is unlikely to approve you for any Chase credit card if you've opened 5 or more credit cards from any card issuer in the previous 24 months. With American Express, you typically won't be eligible for a card's intro bonus offer if you've had that card at any time in the past.

Credit cards offer a range of value and benefits, however, many of these perks are specific. If your card has travel protections, they aren't as valuable if you rarely book travel. To get the most out of your credit card, start with understanding why you need a credit card.

Type of rewards

Not all credit cards earn rewards, but if you're looking to be rewarded for your credit card spending, then it's worth spending a little time to think about what type of rewards make the most sense for you.

Cash-back rewards are simple and easy to redeem. A flat-rate cash-back card could be a good fit if you want to get something back for your spending and avoid headaches. If you want to maximize the return on your spending, you should look at a card that earns flexible travel rewards. These cards tend to have more options for using your miles or points and you can often take advantage of the best redemptions to earn outsized value from your rewards.

Types of benefits

How you plan to use your card has a big influence on the types of benefits that are the best fit for you.

Retailers, travel providers and other companies often partner with banks to issue co-branded credit cards, such as store credit cards, hotel credit cards and airline credit cards. Co-branded cards tend to have perks that are specific to that company. For example, airline cards earn miles with that airline's loyalty program and may also offer free check bags or even airport lounge access.

However, if you're not brand loyal, a credit card with general benefits will be more useful. Some cards have statement credit offers that apply to purchase categories instead of specific brands. Other offer shopping or travel protections that can apply to an array of different transactions.

Building credit or getting out of debt

Anyone with specific goals such as getting out of credit card debt or building credit will likely want to focus on certain types of credit cards and forgo the chance to earn rewards.

Some credit cards offer 0% intro APR periods for as long as 21 months. Other cards are available if you have no credit or bad credit. However, these cards are less likely to offer generous welcome bonuses or ongoing rewards. You also typically won't have access to meaningful benefits with these types of credit cards.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best starter credit cards.

To determine which cards offer the best value for someone with little to no credit history, CNBC Select analyzed over 250 major credit cards issued through FDIC-insured banks and NCUA-insured credit unions that are widely available in the U.S.  

We compared each card on a range of features, including rewards (e.g., cash back, points and miles), annual fees, welcome bonuses, introductory and standard APR and balance transfer fees and foreign transaction fees. We also considered additional perks (e.g., ongoing travel or merchant statement credits), cardholder protections (e.g., purchase protection, $0 liability protection and travel insurance), the application process when available (e.g., is there a credit pull or required credit score) and how easy it is to redeem points (e.g., are rewards are tied to a specific brand; if transferable, to how many/which partners, can you redeem for straight cash back). 
 
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.  

For the cards that offered a rewards program, we considered consumer spending data forecasts from location intelligence firm Esri to determine where U.S. consumers are spending the most money, like on dining and travel. We used this to help determine what bonus categories are most useful for consumers. Since the value of a point or mile varies based on what they can be redeemed for, we also considered things like transferability and the ability to redeem for cash-back. 

When choosing the best starter credit cards, we focused on cards that are easier to be approved for. This meant we focused on cards with low or no credit score requirements, including secured credit cards. While most cards we've included on this list offer rewards and benefits, these features aren't the main focus.

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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.

*For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.