If you have bad credit or scant credit history, you might face an uphill battle getting approved for a credit card, or other credit products. Fortunately, there are ways to build credit from the ground up. Student and secured credit cards cater to consumers who want to build or rebuild their credit. Using these cards responsibly by making on-time payments and keeping your spending in check can put you on the road to better credit.

  1. Student Credit Cards
  2. Secured Credit Cards

1. Student Credit Cards

Student credit cards are specifically designed for college students with limited credit history. They may offer no annual fee, introductory APRs, cardholder benefits and perks such as a rewards program geared toward the needs of college students.

Introductory 0 percent APRs, for example, can allow you to make purchases without accumulating any interest on the purchases during the introductory period. But, if you’re approved for a student card, be sure to make at least the minimum payment due on time each month. The credit card issuer will likely report your on-time payments to the credit bureaus, which may help you to start building or rebuilding your credit history as you responsibly use the credit card. Student credit cards may also provide rewards programs, including cash back or points.

2. Secured Credit Cards

If you have a poor or limited credit history, getting approved for a traditional credit card may not be possible. One effective strategy for building or rebuilding credit is, instead, using a secured credit card. Secured credit cards differ from traditional, unsecured cards in that they require a cash deposit that is used as collateral. Your credit limit will usually equal the amount of this deposit. Many secured credit cards report activity to the major credit bureaus, so paying your balance on time and in full each month can help you build a credit history. Some cards will even review your account after you’ve had a chance to demonstrate responsible use of the card to see if you qualify to receive your security deposit back and transition – or graduate – to a traditional, unsecured card.

Whichever credit card you choose, it’s important to remember: a bad credit history does not necessarily mean a bad credit future. Even if you’ve struggled to make payments in the past, there are plenty of options to help you get back on track. It’s never too late to start paying attention to your credit score. Remember, one of the most effective strategies for positively managing your credit is making consistent, on-time payments of at least the minimum payment due and keeping your balance as low as possible. Student and secured credit cards give you the flexibility and opportunity to show your commitment to responsible credit management.

Published September 4, 2015

Updated January 11, 2021

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