Best Credit Builder Cards to Build Credit in 2024

Whether you're starting from scratch, recovering from bad credit, or aiming to elevate your credit score to new heights, choosing the right credit card can accelerate your path to strong credit worthiness. New platforms like Chime® are uniquely designed to provide individuals with insufficient credit history an opportunity to build or improve their credit scores.

In this article, we will explore the best credit cards to build credit, based on your credit profiles and needs. We will also delve into important factors to consider, such as credit scores, card fees, credit bureau reporting, and long-term planning. With the right credit builder card, you will have the tools you need to build your financial standing.

How Does Building Credit Work?

Building credit refers to the process of establishing a positive credit history. Your credit score, which ranges between 300 and 850, showcases your responsible management of borrowed money in the past. 

Building good credit is crucial if you plan to apply for a mortgage, obtain a car loan with low interest rates, or qualify for top-tier rewards credit cards. Potential employers and landlords often conduct credit checks too, which makes a strong credit report an asset in securing employment or finding suitable housing.

Building credit is a journey that requires time, personal responsibility, and consistent effort. While it's not something you can accomplish overnight, the long-term commitment will pay off when you need it for life's most important purchases. If you're a student, learn more about student credit cards with no credit history requirement.

The Best Credit Builder Cards in 2024

When it comes to finding the best credit builder card, the answer largely depends on your credit history.

What's Your Credit History?

Here's a quick overview of the most common credit scenarios you may face and what you might want to look for in a credit card:

1. I have no or limited credit history: If you're just starting out or have a limited credit history, think about choosing a credit card specifically designed for building credit. Look for options like Chime, which are tailored to help individuals establish a positive credit history. If you're a student, consider our guide on credit cards for students with no income or with bad credit.
2. I am rebuilding credit: If you have a low credit score or are recovering from setbacks like missed payments, defaults, or bankruptcy, there are credit card options designed to help rebuild credit. They do so by providing opportunities to demonstrate responsible financial behavior. Chime is also suitable in this case.
3. I have fair credit: Individuals with fair credit, typically with scores ranging from the high 500s to the mid-600s, have more options available. You may qualify for cards that offer larger credit limits, which can further increase your credit worthiness if you pay your debts in full and on time.
4. I have good to excellent credit: If you have good to excellent credit, typically with a credit score above 700, a wide range of credit card options awaits you. These cards often come with attractive rewards, benefits, and perks. You can consider cards that align with your preferences, such as point rewards, cashback benefits, or luxury travel.

Factors to Consider Before Choosing a Credit Card to Build Credit

When selecting the best credit card for your specific scenario to build credit, there are a few additional factors to keep in mind:

• Credit Bureau Reporting: Ensure that the credit card issuer reports your payment history to major credit bureaus. For reference, Equifax, Experian, and TransUnion, are the top three credit bureaus in the United States. While timely minimum payments can help build a credit history, it is the most ideal to pay your total balance in full before the due date.
• Fees and Interest Rates: Pay close attention to the size of the recurring annual fee and if the card charges foreign transaction fees. Most important is the interest rate (or Annual Percentage Rate), especially if you plan to carry a balance. If you only pay the minimum balance on your credit card each month without paying off the full balance, the credit card company will add on additional debt. This additional debt is calculated based on the Annual Percentage Rate (APR) associated with your card.
• Credit Limit Increase: Consider credit cards that have the potential for a credit limit increase as you manage your debts. By having a higher credit limit, you can improve your credit utilization ratio, which in turn can have a positive impact on your credit score. However, it is crucial to avoid accumulating debts that you cannot pay off, as this will have a detrimental effect on your creditworthiness. It can be challenging to recover from excessive debt, so it is essential to make responsible financial decisions and only maintain debts can be comfortably repaid without causing significant financial strain.
• Responsible Credit Usage: Building credit requires responsible credit card usage. It is highly recommended to pay off your total balance in full every billing cycle, rather than carrying debt over time. By doing so, you not only avoid interest charges but also demonstrate financial discipline and responsibility. Responsible credit card usage involves making timely payments, keeping balances low, and avoiding the temptation to accumulate unnecessary debt.

Now without further delay, let's walk through the best credit builder cards in the United States in 2024:

Secured Chime® Credit Builder Visa® Credit Card

In our opinion, Chime is the overall best online checking account service in the United States. One of the main factors why is that the checking account comes with an optional credit builder Visa card, which is designed to help you build a strong credit history. According to Chime's website, based on a study by Experian®, members who used Credit Builder for their first purchase from June 2020 to October 2020 saw an average increase of 30 points in their FICO® Score 8 after about 8 months.

In addition to no minimum balance requirements, no monthly fees, and no credit checks, Chime offers an optional savings account, overdrafts⁵, and user-friendly mobile features such as mobile check deposit and real-time transaction alerts.

Chime Credit Builder

Perhaps Chime's most impressive feature is its optional credit builder Visa card, which has no annual fee. There is no credit check required either. To apply for Credit Builder², you must have received a single qualifying direct deposit of $200 or more to your Checking Account².

This is how it works: you first add money from the Checking Account to the Credit Builder balance, which will be held in a secured account as collateral for your Credit Builder card. You can spend up to this amount with your card. When this money is used to pay off your charges at the end of every month, Chime will report that to the major credit bureaus in the United States.

While Chime is not a bank, it does partner with The Bancorp Bank, N.A. and Stride Bank, N.A., Members FDIC, to provide the banking services. The Chime Credit Builder Visa® Card, on the other hand, is issued by Stride Bank, N.A., Member FDIC, and may be used everywhere Visa credit cards are accepted. Overall, Chime uses its powerful finance app to help Americans who need better credit to build a strong financial history and access essential finance services.

More info: read our in-depth Chime review.

Discover it® Secured Credit Card

The Discover it® Secured Credit Card's main advantages is that no credit score is required to apply, making it accessible to a wide range of applicants. The card not only helps you establish credit but also offers additional benefits such as earning cash back on your purchases, all while maintaining no annual fee.

To get started with the Discover it® Secured Credit Card, you'll need to provide a refundable security deposit, which determines your credit line. The minimum deposit amount is $200, and your credit line will match your deposit. When submitting your deposit, you will be required to provide your bank information too. Discover will apply a 27.99% Standard Variable Purchase APR to the card.

A noteworthy feature of this card is that Discover will assess your account after 7 months to determine if you are eligible for a transition to an unsecured line of credit. If you qualify, Discover will return your deposit, allowing you to continue building your credit without the need for a secured card.

Beyond its credit-building benefits, the Discover it® Secured Credit Card offers a rewarding cash back program. You can earn 2% cash back on purchases made at Gas Stations and Restaurants, up to $1,000 in combined purchases each quarter. Additionally, you will earn unlimited 1% cash back on all other purchases automatically. For further details, we recommend visiting Discover's website to review the card's terms and conditions.

Capital One Platinum Secured Credit Card

The Captial One Platinum Secured Credit Card has no annual or hidden fees and offers quick approval, making it accessible for those with no to fair credit history. By placing a refundable security deposit starting at $49, you can secure an initial credit line of $200 and have the opportunity to earn back your deposit through responsible card usage. The card charges a 29.99% variable APR.

Additionally, the Capital One Platinum Secured card offers the possibility of a higher credit line without requiring an additional deposit. After as little as 6 months of responsible card usage, you'll be automatically considered for an increased credit line. This feature gives you the opportunity to practice responsible debt management, and improve your credit score.

The Capital One Platinum Secured Credit Card comes with $0 Fraud Liability. This means you won't be held responsible for unauthorized charges if your card is lost or stolen, providing added security and protection.

Furthermore, managing your credit is made easier with access to your account 24/7 through online banking and Capital One's mobile app. You can monitor your credit score for free using the CreditWise feature, which alerts you when your TransUnion® or Experian® credit report changes. Overall, Capital One can help you stay informed, track your progress towards building a stronger credit history, and eventually offer you its higher-tiered reward cards.

More info: read our in-depth Capital One review.

Varo Believe Credit Builder Card

Varo is a digital bank and FDIC Member that provides basic banking services with no monthly fees, no minimum balance requirements, and no credit checks.

Varo Believe Credit Builder Card

Varo Believe is a secured credit card that does not require prior credit history, credit checks, and minimum security deposits. The card charges no interest and no annual fees. Instead, you will need to have received qualifying direct deposits of $500 or more in the past 90 days to your Varo Bank Account.

Your credit limit is based on your available balance in your Varo Believe Secured Account, up to $2,500 per day for purchases or $1,000 per day for cash advances (aka ATM withdrawals), with a total limit of $10,000 per billing cycle. Like Chime, Varo will report your bill payment activity to the three largest credit bureaus in the country to help boost your credit score.

Varo Advance

Varo Bank also offers Varo Advance, a small dollar line of credit with a 0% Annual Percentage Rate (APR). The feature is useful when you need cash for an emergency but don't have enough money in your balance at the moment. You have the option to repay the advance within 30 days. To qualify, you'll need an active bank account that is at least 30 days old, an activated debit card, and qualifying direct deposits of at least $1,000 during the current or previous calendar month. Timely repayments can increase your access to the advance, allowing you to borrow up to $75 after meeting the requirements.

Acorns Visa™ Debit Card

Acorns is a platform that goes beyond traditional banking and serves as an educational tool to help you develop a habit of saving and investing. While Acorns is not a bank, the checking account, Acorns Visa™ debit cards, and banking services are issued by Lincoln Savings Bank or nbkc bank, members FDIC.

Acorns Direct Deposits

One of the standout aspects of Acorns is the variety of ways it enables you to save and invest. By setting up direct deposit into your Acorns checking account, you can receive your paycheck up to two days earlier compared to traditional banks. A percentage of the recurring deposit can automatically be invested too.

Additionally, Acorns offers a feature that rounds up your purchases and automatically deposits the difference into your investment account. Whenever checking account holders spend with their Acorns Visa™ debit cards (issued by Lincoln Savings Bank or nbkc bank, Members FDIC), the excess pocket change automatically gets invested into you investment account.

Acorns Checking

When it comes to fees, Acorns charges a reasonable monthly fee of $3 ($5 for a family plan). This fee grants you access to all the features the platform offers, including investment management and a checking account. The checking account charges no overdraft fees, maintenance fees, or ATM fees for cash withdrawals from in-network ATMs.

The Best Credit Cards to Build Credit In Summary

Here are our picks for the top 5 credit builder cards in the United States in 2024 at a glance:

1. Secured Chime® Credit Builder Visa® Credit Card
2. Discover it® Secured Credit Cardt
3. Capital One Platinum Secured Credit Card
4. Varo Believe Credit Builder Card
5. Acorns Visa™ Debit Card

Disclaimers

Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.

¹ Out-of-network ATM withdrawal and over-the-counter advance fees may apply. See here for details.

² To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

³ The Annual Percentage Yield ("APY") for the Chime Savings Account is variable and may change anytime. The disclosed APY is effective as of September 20, 2023. No minimum balance is required. Must have $0.01 in savings to earn interest.

⁴ On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score. Results may vary.

⁵ SpotMe® on Credit is an optional, no-interest/no-fee overdraft line of credit tied to the Secured Deposit Account available to qualifying members with an active Chime Credit Builder Account. SpotMe on Debit is an optional, no-fee overdraft service attached to the Chime Checking Account available to qualifying members after Visa debit card activation. Both SpotMe on Credit and SpotMe on Debit are sometimes collectively referred to as "SpotMe" or, if you have signed up to use SpotMe with only one account, "SpotMe" means the elected service. To qualify for SpotMe, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account monthly. Qualifying members will be allowed to overdraw their Chime Checking Account and/or Secured Deposit Account (associated with your Chime Credit Builder credit card) up to $20 but may be later eligible for a higher limit of up to $200 or more based on Chime account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe Debit Terms and Conditions and SpotMe on Credit Terms and Conditions.