Best Credit Cards for Beginners 2021 (NO CREDIT HISTORY!)

What are the best starter credit cards for beginners with no credit history? Should you get a secured or unsecured credit card, and what's the difference? How do credit card deposits work? We'll cover all those questions and more in this video.

First, you need to understand the difference between secured and unsecured credit cards. Secured credit cards require that you put up a deposit - usually equal to the card's credit line (aka balance limit) - when applying for the card. This deposit acts as collateral for the bank, because you have little to no credit history to prove that you're a trustworthy borrower. After about 6-18 months of on-time payments, your card will likely transition into an unsecured credit card, which means that you no longer need a deposit to continue using your card, so you get your deposit back. While most people with stable incomes and at least a semi-decent credit history can apply directly for an unsecured card without ever having to put up a deposit, secured credit cards are great for beginners with little to no credit history.

There are 5 things you should look at when evaluating a secured credit card. First, how much of a deposit is required to open the card? Second, what fees does the card charge? Third, what kind of benefits does the card offer? Fourth, how long does it usually take for that card to transition from secured to unsecured? And fifth, what's the interest rate on the card?

One great option is the Discover It Secured Card. This card comes with no annual fees and cashback on your purchases, including a cashback match at the end of your first year, where Discover matches all the cashback you've earned during your first year with the card. Another option is the Secured MasterCard from Capital One, which is a great option if you don't have a lot of money to put up for the deposit, since a $49 deposit will give you access to a $200 credit line. Lastly, if you're a student, there are student-specific cards that function similar to unsecured credit cards and come with better benefits than typical secured cards.

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🕒 TIMESTAMPS 🕒

0:00 - Secured vs. unsecured credit cards
2:02 - Why you should get a secured credit card
4:00 - 5 ways to evaluate secured cards
6:16 - Best beginner credit cards
9:57 - Student credit cards

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Disclaimer: I am not a professional financial advisor nor a tax professional. The content presented in this video is for entertainment and educational purposes only.

[xA]

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[Andygg]

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[miked]

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[kbelfon]

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[natalyt]

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