We recommend products that we love. When you buy through links on our site, we may earn an affiliate commission.
We’ve compiled a list of the seven best credit builder card options in 2022. Each of these cards is accessible to people with bad credit, friendly to your budget, and effective at increasing your score.
We don’t necessarily recommend any of these cards over the other. Each one has something to offer, so consider them all before deciding which one makes the most sense for you.
Many popular credit builder card options are secured cards that require a deposit to qualify. Indigo is one of the few that doesn’t require any cash outlay upfront.
Because there’s no deposit requirement, Indigo is more affordable than many credit builder cards. There’s no annual payment either, so the card shouldn’t cost anything, as long as you make your monthly payments on time.
Even though it’s unsecured, Indigo is still accessible to consumers with no credit, limited credit, and bad credit. Their website explicitly states that the Indigo card is ideal for people with less than perfect scores, and there’s no hard credit check when you apply.
That said, they don’t guarantee that you’ll qualify either. The card issuer still has to review your credit report, income, and outstanding debts.
While Indigo doesn’t offer any cash back rewards, it does provide identity theft protection benefits. It also reports your card usage to all three credit bureaus.Try Indigo
Grow Credit technically offers a virtual credit builder card, but it’s not one you can use to cover your daily expenses. In fact, you can only use it to pay for your monthly subscriptions, like Hulu, Pandora, or Amazon Prime.
Though hundreds of subscriptions are available, Grow Credit imposes monthly and annual spending limits on your account. These are the four tiers available:
- Build Free: $0 monthly payment, $17 monthly spending limit, $204 annual spending limit.
- Build Secured: $1.99 monthly payment, $17 monthly spending limit, $204 annual spending limit.
- Grow Membership: $3.99 monthly payment, $50 monthly spending limit, $600 annual spending limit.
- Accelerate Membership: $7.99 monthly payment, $150 monthly spending limit, $1,800 annual spending limit.
Fortunately, you can qualify for a Grow Credit account with limited or bad credit. They only perform a soft inquiry when you apply, and your credit score won’t affect your chances of approval.
However, Grow still has underwriting requirements that may prevent some people from qualifying for the free account. Fortunately, the paid plans are available to people who don’t meet their criteria.
Once you receive your card and use it to pay for your subscriptions, Grow Credit automatically charges your bank account to pay off the balance each month, then reports the activity to all three credit bureaus.
As a result, you should never carry a balance over, your credit utilization ratio should always be zero, and you’ll never incur interest charges.
You shouldn’t ever miss a payment either, though it could happen if you have insufficient funds in your bank account. If you don’t fix the issue within 30 days, Grow Credit will report your late payment to the bureaus.Try Grow Credit
Chime Credit Builder
The Chime Credit Builder card is a modern twist on the old-fashioned secured credit card. Instead of providing a single cash deposit when you sign up, you have to transfer funds to the card from a Chime Spending Account each month like a prepaid card.
The amount you transfer from your Chime Spending Account becomes your credit limit for the billing period. You can commit as much or as little as you like, making it easy to manage in months when money is tight.
At the end of each period, you can manually use the funds you transferred to pay off your outstanding balance or let Chime do it automatically with their Safer Credit Building feature.
Either way, Chime will report your payment activity to all three credit bureaus, though they don’t include utilization levels. And since you can’t carry balances over from month to month, you’ll never have to pay any interest. There’s no annual fee, either.
You can qualify for the card even with bad credit, and there’s no hard credit check involved. However, you need to have a Chime Checking Account with a qualifying direct deposit of $200 or more before applying.
Unfortunately, Chime doesn’t offer much in the way of additional benefits, but they give you free access to your FICO Score 8.Try Chime
Petal offers another credit builder credit card that people with bad credit can qualify for without making a cash deposit. In fact, there are two Petal cards available, both of which are accessible to people with less than perfect credit despite being unsecured.
That’s because Petal doesn’t use traditional underwriting methods or check your FICO credit score. Instead, they use your bank account activity to assign you a “cash score,” which determines your creditworthiness based on your earnings, saving, and spending.
In addition, both Petal cards have some significant benefits, including the following:
- High cash back rewards: Petal 1 and 2 both offer 2% to 10% cash back at select merchants. In addition, Petal 2 provides 1% to 1.5% cash back on all purchases.
- Flexible credit limits: Your credit limit can be as high as $5,000 for Petal 1 and $10,000 for Petal 2.
- No annual fees: Neither card has an annual fee, which means they’re free to use if you pay on time. However, their interest rates are as high as any credit card, reaching 29.74% and 27.24% for Petal 1 and 2, respectively.
In addition, Petal gives you access to your credit score for free, though it’s your VantageScore 3.0 and not your FICO score. Petal also reports your activities to each major credit bureau.Try Petal
Self Secured Visa
The Self Visa credit card is another secured credit builder card with a twist. Anyone can open an account, but you must have a Self credit builder loan in good standing with three timely payments completed and $100 in savings progress.
Self uses your previous payments toward their credit builder loan as collateral for your credit builder card. So while it’s technically a secured card, you don’t actually have to provide any additional cash out of pocket to qualify.
If you’ve never heard of a Self credit builder loan, think of it as a reverse installment loan. Once you sign up for an account, Self puts your loan proceeds in a locked savings account.
You then make principal and interest payments toward the account, which Self reports to the three major credit bureaus. After you pay off the loan balance, Self gives you back your principal payments.
Your Self credit card also gets reported to the three major credit bureaus. That makes Self a great way to build credit if you already have or are interested in using their credit builder loan.
However, their Visa card doesn’t offer any cash back rewards or other benefits besides access to your VantageScore 3.0. There’s no annual fee, though, so at least it doesn’t cost you anything.Try Self
Citi Secured Mastercard
The Citi Secured Mastercard is a traditional secured credit card. To qualify, you need to provide a cash deposit between $200 and $2,500 that equals your credit limit if you’re approved.
Because it’s a secured credit card, the Citi card is accessible to individuals with limited or imperfect credit histories. Citi states that its account is “designed specifically for people who are new to credit or want to build their credit.”
Another advantage of the Secured Mastercard is the fact that it’s a Citi card, and Citi is a first-tier bank.
That means the cards they issue have the highest impact on your credit, and using the account responsibly improves your score faster than cards from another bank or credit union.
Unfortunately, the Citi Secured Mastercard doesn’t offer any cash back rewards. They also seem to be a little slower than other banks at refunding your cash deposit and upgrading you to an unsecured account.
However, Citi reports to all three credit bureaus and gives you free access to your FICO score. There’s also no annual fee to use the card.
Discover It Secured
Like Citi’s Mastercard, the Discover It Secured card is a traditional secured credit card account. It’s accessible to people with bad credit, but you need to put down a cash deposit of at least $200 to qualify.
However, the Discover It Secured card has some surprisingly solid cash back rewards, including the following:
- Unlimited 1% cash back on all purchases
- 2% cash back on up to $1,000 in eligible purchases each quarter at gas stations and restaurants
- Automatic match on all cash back earned at the end of the first year
In addition, there’s no annual fee, and Discover reports to all three credit bureaus. They also promise to consider upgrading you to an unsecured account every month after you build eight months of payment history.
If you show that you can use debt responsibly, Discover will refund your security deposit and upgrade you to an unsecured account. Notably, they consider your activity on all your credit accounts, not just the Discover It card.
Our Methodology for Selecting These Cards
To create our list of the best credit-building credit cards, we prioritized accounts accessible to people with bad credit. After all, if you’re looking to increase your credit rating, you probably aren’t starting with a perfect one.
That’s why there are so many secured accounts listed above. These are generally easier to qualify for with a limited or less-than-good credit history.
Our next most significant consideration was affordability. We preferred accounts with no annual fee because they can be significant when money is tight. That’s also why we suggest cards with no out-of-pocket deposit requirements whenever possible.
Next, we did our best to find accounts that let you build credit with minimal risks, such as those that automatically pay your balance each month. These are great options for people who have struggled to make their past payments on time.
Finally, we considered the supplemental benefits of each account. Building credit is the highest priority, but it’s always nice to take advantage of some cash back rewards while you’re at it.
A credit builder card is one of the best ways to build credit when you have none, but there are other options. Take a look at our favorite credit card alternatives for some great suggestions!
Do Credit Cards Build Credit Fast?
Using credit cards responsibly builds credit over time, but it’s not a rapid process. After all, the primary way credit cards improve your score is by letting you report timely payments, and you can only do so once a month.
As a result, it may take you several months before you see any meaningful improvement in your credit score from a credit card.
However, there are few legitimate ways to build credit any faster than that. Most services promising you immediate improvements to your credit are being dishonest, so you shouldn’t try to rush the process.
How Do You Build Credit With a Secured Credit Card?
A secured credit card primarily lets you build credit by giving you an opportunity to create a positive payment history and report a low credit utilization ratio. However, it may also diversify your credit mix.
Your payment history is the most significant factor affecting your personal credit. It’s worth 35% of your FICO score, which is the score lenders use most often. The more credit card payments you make on time, the more your score will improve.
Your outstanding debts are the second most significant personal credit factor, worth 30% of your FICO score. If you keep your utilization low by maintaining card balances between 1% and 10% of your credit limit, your score will see the greatest benefit.
Finally, opening a secured credit card adds a revolving credit account to your credit report. That can increase the diversity of your credit mix, which is worth 15% of your FICO score.
Will 2 Credit Cards Build Credit Faster Than 1?
Yes, having two credit cards should build credit faster than one, as long as you use both cards responsibly. It may not increase your score twice as quickly, but your score will improve noticeably more rapidly.
First, you’ll report twice as many positive payments to the credit bureaus. As you can imagine, that demonstrates that you’re better at managing debts than someone with a single card.
Second, having multiple credit cards raises your overall credit limit. Having a higher borrowing amount available can make it easier to keep your credit utilization ratio at reasonable levels.
Finally, adding two credit cards to your credit reports diversifies your credit mix more significantly than a single revolving account.
All that said, you shouldn’t try to take on more credit cards than you can manage. If two credit cards might tempt you into overspending or cause you to miss payments, it’s probably not worth the risk.
What’s the Difference Between a Secured and an Unsecured Credit Card?
A secured credit card requires you to provide a cash deposit to qualify for the account. Typically, that deposit equals the card’s credit limit, which means the lender is always covered if you default on your debt.
Because secured credit cards require collateral, they’re easier to qualify for than unsecured cards and are usually for people with little or bad credit. They tend to offer fewer benefits and may have an annual fee.
Conversely, an unsecured credit card doesn’t require that you put down any cash upfront. If you default on your account, your credit card issuer might struggle to collect from you and may have to accept their losses.
As a result, the typical credit card company is reluctant to give unsecured credit cards to people with poor credit. They’re usually only for borrowers with good to excellent credit scores.
If you manage to qualify for an unsecured card, they often come with additional perks, such as sign-on bonuses and cash back rewards on eligible expenses.
Nick Gallo is a Certified Public Accountant and content marketer for the financial industry. He has been an auditor of international companies and a tax strategist for real estate investors. He now writes articles on personal and corporate finance, accounting and tax matters, and entrepreneurship.