If you want to establish a good credit history, you need to start somewhere. A starter credit card can help you do that by allowing you to make purchases and pay them off on time. This way, you can show lenders that you are a responsible borrower and qualify for better credit products in the future. In this guide, we will show you how to choose and use a starter credit card wisely.

What Is a Starter Credit Card?

A starter credit card is a type of credit card that is designed for people who have no or limited credit history. These cards typically have low credit limits, high interest rates, and few or no rewards. However, they also have easier approval requirements and lower fees than other cards.

There are two main kinds of starter credit cards: student cards and secured cards. Student cards are for college students who want to build credit while earning rewards for their spending. Secured cards are for anyone who can make a refundable deposit that acts as collateral for the card.

How to Choose a Starter Credit Card?

To choose the best starter credit card for your needs, you should consider these factors:

  • Your credit score: If you have no credit score, you can apply for any starter card. If you have a low credit score, you may want to opt for a secured card that has no credit check.
  • Your spending habits: If you plan to use your card regularly, you may want to look for a card that offers rewards or cash back. If you only use your card occasionally, you may prefer a card that has no annual fee or foreign transaction fee.
  • Your payment behavior: If you can pay your balance in full every month, you can avoid paying interest and save money. If you tend to carry a balance, you should look for a card that has a low APR or a 0% introductory offer.

How to Use a Starter Credit Card?

To use your starter credit card effectively, you should follow these tips:

  • Set a budget: Before you apply for a card, make sure you have a realistic budget that accounts for your income and expenses. This will help you avoid overspending and getting into debt.
  • Pay on time: The most important factor in building credit is paying your bills on time every month. This will show lenders that you are reliable and trustworthy. You can set up automatic payments or reminders to avoid missing due dates.
  • Keep your balance low: Another important factor in building credit is keeping your credit utilization ratio low. This is the percentage of your available credit that you use at any given time. Ideally, you should keep it below 0%, or even better, below 0%. This will show lenders that you are not maxing out your credit limit and that you have enough financial cushion.
  • Monitor your credit: As you use your starter credit card, you should check your credit report and score regularly. This will help you track your progress and spot any errors or fraud. You can get one free copy of your credit report from each of the three major credit bureaus every year at annualcreditreport.com. You can also get your free credit score from various sources such as your card issuer or online platforms.

How to Graduate from a Starter Credit Card?

Once you have used your starter credit card responsibly for at least six months, you may be eligible for an upgrade. This means that you can either get a higher credit limit, lower interest rate, or better rewards on your existing card, or apply for a new card that has more features and benefits.

To graduate from a starter credit card, you should:

  • Ask your issuer: You can contact your card issuer and ask if they can review your account and offer you an upgrade. They may do this automatically or upon request, depending on their policies.
  • Shop around: You can also compare other cards in the market and see if they suit your needs better. You may find cards that have lower fees, higher rewards, or more perks than your current card.
  • Apply carefully: If you decide to apply for a new card, make sure you do it sparingly and wisely. Applying for too many cards in a short period of time can hurt your credit score and lower your chances of approval.


A starter credit card can be a great tool to build your credit history and improve your financial future. However, it also comes with responsibilities and risks that you need to be aware of. By choosing the right card, using it wisely, and graduating to better cards, you can enjoy the benefits of credit without the drawbacks.