If you don’t have any credit, sifting through the murky waters of credit cards is tough. Thankfully, Consumer Reports has looked at all the options and picked a credit card that’s great for first-time borrowers.
Consumer Reports recommends the Capitol One Secured MasterCard as a stepping stone to a regular credit card:
The smarter option if you have little or no credit is a secured card, though many also carry exorbitant fees. The Capital One Secured MasterCard is better than most. Its annual fee is $ 29 and the late fee is low (no more than $ 19); the APR is currently 22.9 percent. The company also reports monthly to all three major credit bureaus—Equifax, Experian, and Transunion—which helps you build credit. You can get an initial credit limit of $ 200 by putting down a refundable deposit of as little as $ 49, depending on your creditworthiness. After you establish a good payment history over 12 to 18 months, you can ask Capital One or another bank for a standard credit card.
The point, as we’ve mentioned before, is to use the secured card as a starting point and move onto a standard credit card as quickly possible. If the fees are too ridiculous for you, the right prepaid cards can do the trick, and you can build your credit without credit cards if you’re careful.
Best credit cards for young adults with little or no credit | Consumer Reports
Photo by Robert Scoble.