A Quick Guide to Getting a Credit Card

Need a new credit card, but don’t know where to start? Whether you have a low credit score and need help getting approved, or you have a high credit score and want to get the best deal, we’ve outlined our favorite picks for all credit backgrounds. Read more and learn what you should look out for!

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Types of Credit Cards: Secured vs Unsecured

There are many different types of credit cards designed to suit the needs of various people, but they can mostly be divided into two major categories: secured credit cards and unsecured credit cards. Unsecured credit cards are what most people think of when they think of credit cards in general. Unsecured credit cards are typically applied for by a consumer, the company reviews their application, and if approved, they get a card with a credit limit and they often do not have to pay any upfront fees. There may be a fee subtracted from their credit limit, or they may pay an annual rate, but they simply apply, receive the card in the mail, and then begin to use it.

Secured credit cards work differently. For a secured credit card, the user pays a deposit and that amount is used to fund the credit card. In other words, if you pay a $500 deposit, you have a $500 credit limit. Secured credit cards are typically used by people with lower credit scores because your creditworthiness is less important than if you were applying for an unsecured credit card. This is because despite being a high-risk customer due to a low score, the company would not lose a substantial amount of money because of your deposit. Secured credit cards were once a relatively rare option, but in more recent years they have emerged as a viable option for millions of Americans.

Preapproval vs Pre-qualified Credit Cards

It is important to note that applying for credit cards, as well as any other form of credit, impacts your credit. As a way to not deter potential customers, many companies offer pre-qualification or pre-approval. Which is offered depends on the company as well as the card. As an example, Capital One offers pre-qualification for some of their cards but preapproval for others.

So, what’s the difference? According to NerdWallet, pre-qualification basically means that the banking institution has a best guess that you would be approved for the card if you did a full application. Preapproval means that you are almost promised to be approved if you apply. It should almost be mentioned that you can sometimes get preapproved or prequalified for certain cards based on having accounts with Credit Karma and other companies like it. While you should exercise caution with a preapproval or prequalification offer sent via email, many legitimate companies mail out letters to consumers despite them not previously applying.

Our Top Picks for Credit Card Offers

Secured Mastercard from Capital One

The secured Mastercard by Capital One is a great option for building credit without paying a ton in fees. Besides an initial deposit of as low as $49, there is a $0 annual fee as well as a $0 foreign transaction fee. This card offers a $200 starting credit limit. Be advised that your initial deposit depends on your credit history.

Discover it Secured

The Discover It is 2021’s best-secured credit card because not only does it offer rewards, but it also has a $0 annual fee. While most secured credit cards do not offer rewards to customers, Discover It doubles the rewards cardholders earn their first year. This option is perfect for people with scores below 670.

Credit One Bank Visa

This is a great option for people who have fair credit- so not bad but also not good or great. The Credit one bank visa is great because it offers rewards as a small and manageable credit limit of $300 to start. This sounds like a small number, but it allows them to determine if you can be responsible with a higher limit after the first year with this card. This option charges an APR of 19.99%-23.99%, which is above the market average.

Blue Cash Preferred Card from American Express

Known as the family card, this credit card option offers 6% cashback at US supermarkets on up to $6,000 in spending per year, 6$ back on select US streaming services, as well as 3% back on transit. You also get 1% back on everything else. Your cashback can be redeemed as rewards dollars and can be used as statement credits if your balance is $25 or more. It should be pointed out that this card has what would be considered by most to be high fees.

Capital One Quicksilver Cash Rewards Credit Card

This card is known to have set the standard for a full generation of cashback credit cards due to offering 1.5% cashback on all purchases. This is great because sometimes users can become confused by all the different rewards credit cards and what they offer. This card is also great because it has a $0 annual fee, a $200 signup bonus after you spend $500 on purchases within the first 3 months. In terms of interest rates, it is 0% on purchases for 15 months and then between 15.49% and 25.49%.

Finding a great credit card to suit your needs is important and you need to as much research as possible. This article has outlined many of the important things you should know before deciding on a card or even before applying in the first place.