estacao | Published 10/10/2025 Updated 10/10/2025

How to build credit with your credit cards

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Understanding credit is essential for managing your finances and achieving long-term financial goals. Your credit score affects not only your ability to get approved for credit cards and loans but also the interest rates you’ll pay and the opportunities available to you.

This guide will explain how credit works, how credit scores are calculated, practical ways to improve your score, and which credit cards are best for beginners at different stages of their credit journey.

Overview: Why credit matters

Credit score is a three-digit number ranging from 300 to 850. Lenders, landlords, and many service providers use that score to judge how likely someone is to repay debt. Generally, a score above 670 is considered “good.” Reaching 700+ requires strong performance across all credit-score factors.

How a credit card actually works

A credit card functions like a short-term loan from the issuer (banks such as Chase, Bank of America, Discover, etc.). When a cardholder buys $200 worth of items at a store, the issuer pays the merchant and the cardholder later repays the issuer. The cardholder receives a monthly statement showing the balance due for that billing cycle.

There are two basic payment choices each month:

Pay the full statement balance (best practice — avoids interest).
Pay the minimum monthly payment (keeps account current but accrues interest on the remaining balance).

Example: If the $200 purchase has a $25 minimum payment and the cardholder only pays $25, the remaining balance accrues interest and the amount owed grows over time.

How credit scores are calculated (the five factors)

Humphrey highlights the five standard credit-score factors and their approximate weightings:

Payment history — 35%: How reliably payments are made on time. Missing even one payment can hurt the score. Turning on autopay for at least the minimum is a practical safeguard.
Amounts owed (credit utilization) — 30%: The percentage of available credit being used. Using more than ~20–30% of available credit can lower the score because it signals higher reliance on debt.
Length of credit history — 15%: Based on the average age of accounts. This factor improves with time, so starting early and keeping good accounts open helps.
Credit mix — 10%: Having different types of credit (credit cards, auto loan, mortgage) can be positive, but one should not open debts unnecessarily just to diversify.
New credit — 10%: Opening many new accounts in a short time looks risky and can reduce the score.

Quick ways to improve credit (and realistic expectations)

Building credit takes time and consistent behavior: pay on time, keep balances low, and avoid opening too many accounts quickly. One reliable “fast boost” Humphrey recommends is:

Becoming an authorized user on a trusted person’s credit card (often a parent). If that account has a long, positive history and low utilization, the authorized user can benefit from that history without needing to use the card.

Important: only accept authorized-user status from someone with a strong track record and who you trust.

Product-style review: Credit card options for beginners

For readers with little or no credit, Humphrey suggests a staged approach: start with a secured card, demonstrate reliable usage, then graduate to unsecured cards. Below are recommended options with specs, pros, cons, and who each card suits.

Discover it® Secured (recommended starter)

Type: Secured credit card (deposit required)
Typical upfront cost: Deposit often $200–$300 (held as collateral)
Annual fee: Usually none
Why it’s good: Designed for people with no or poor credit; reports to major bureaus; possibility to graduate to an unsecured card after responsible use.
Pros: No annual fee; cashback rewards on some versions; clear path to upgrade.
Cons: Requires cash deposit; credit limit tied to deposit amount.
Best for: Those with no credit history who can provide a refundable deposit and commit to on-time payments for 6–12 months.

Bank of America® Customized Cash Rewards (beginner-friendly unsecured)

Type: Unsecured cash-back card
Annual fee: Typically none
Why it’s good: Straightforward cash-back categories and reasonable approval odds for applicants who have established some credit.
Pros: No annual fee; flexible cash-back categories; good brand acceptance.
Cons: May require a moderate credit profile for approval; benefits scale with responsible use.
Best for: Newer credit users who have shown 6–12 months of positive history (often after a secured card).

Citi® Double Cash Card (simple cashback, earn while you pay)

Type: Unsecured cash-back card
Annual fee: None
Why it’s good: Straightforward structure: cash back on purchases and additional cash back on payments.
Pros: Simple and generous cash-back mechanics; no annual fee.
Cons: Typically requires a solid credit score for approval.
Best for: Cardholders who have established credit and want uncomplicated rewards.

Petal Visa (good for thin-file applicants)

Type: Unsecured card marketed to applicants with limited credit history
Annual fee: Often none
Why it’s good: Uses alternative data (income, cash flow) alongside credit reports to evaluate applicants, which helps people with thin credit files.
Pros: Designed for newcomers; no deposit required; straightforward approval path for non-traditional applicants.
Cons: Terms and rewards vary by card version; may have higher APRs for some risk profiles.
Best for: Young adults or gig workers with limited or no credit who can demonstrate steady income.

Pros and cons summary (credit cards as credit-building tools)

Pros: Opportunity to build payment history, improve credit mix, and demonstrate responsible use. Many starter cards have no annual fee. Secured cards allow credit building with limited risk.
Cons: Carrying balances can lead to expensive interest. Opening too many accounts or using too much available credit can hinder scores. Secured cards require a deposit.

Practical tips and best practices

Always pay on time: Payment history is the largest single factor (35%). Set up autopay for at least the minimum.
Aim for low utilization: Keep balances under roughly 20–30% of total available credit. Example: if total credit limits = $3,000, keep balances under $600–$900.
Pay in full when possible: Avoid interest and show strong repayment behavior.
Start early and keep accounts open: Length of credit history is based on averages — older accounts in good standing help.
Be selective about new accounts: Don’t open many cards quickly; new credit inquiries and accounts can reduce scores.
Use authorized-user status wisely: Piggybacking on a trusted person’s positive account can accelerate score improvements.

Who should consider which card?

No credit / thin file: Discover it® Secured or Petal Visa are solid starting choices.
Some credit history (6–12 months): Consider Bank of America Customized Cash Rewards as a first unsecured upgrade.
Established credit seeking rewards: Citi Double Cash is a straightforward cash-back option.

Conclusion

Building good credit isn’t about quick fixes — it’s about consistent, responsible habits. Understanding how credit works, paying on time, and keeping balances low are the foundations of a strong financial profile.

Starter credit cards, like the Discover it® Secured or Petal Visa, offer safe entry points for beginners, while cards such as the Citi® Double Cash or Bank of America Customized Cash Rewards help transition toward long-term rewards.

Whether you’re just starting or rebuilding your score, the key is discipline: use credit as a tool, not as extra income. Over time, steady payments and smart card management will unlock better rates, higher limits, and access to premium financial products.

Your credit journey doesn’t have to be complicated — it just needs to be consistent.