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NerdWallet’s Best Unsecured Cards for Short Credit Histories, 2016

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NerdWallet's Best Unsecured Cards for Short Credit Histories

A short credit history is better than none, especially when it comes to getting approved for an unsecured credit card. With an unsecured card — that is, a card that doesn’t require cash collateral — you can get higher credit limits, lower fees and more valuable rewards than you would with a secured one.

To find the best unsecured credit cards for people with short credit histories, NerdWallet surveyed cards for those with fair or average credit profiles (FICO scores of 630-689) that offered the best rewards and benefits. Here are the cards that topped the list:

If you’re starting with no credit history, though, getting a secured credit card — a card that requires a refundable security deposit — is probably your best bet. After about six months to a year of on-time payments and responsible credit use, you could have good-enough credit to apply for an unsecured credit card or upgrade your existing account and get your deposit back.

NerdWallet looked for secured cards that had low deposit requirements, no annual fees and other benefits, and these cards got top marks:

Unsecured cards

Best for gas & groceries

Barclaycard Rewards MasterCard®

Apply Now on Barclaycard's secure website

Pros

  • Qualify with average credit
  • No annual fee

Cons

  • High APR

Bonus Offer

None

Annual Fee

$0

Intro APR Promotions

N/A

APR

  • APR: 25.24%* Variable
  • Cash Advance APR: 25.49%, Variable

Card Details

  • 2X points on gas, utility and grocery store (excluding Target® and Walmart®) purchases. 1x points on all other purchases
  • No annual fee
  • Points don't expire as long as account is open, active and in good standing
  • Redeem points for deposits to a U.S. checking or savings account, statement credits or gift cards, starting at 1,000 points for $10
  • No limit on the number of points you can earn or redeem
  • Free online access to FICO® Credit Score lets you keep an eye on your credit and get alerts when we learn that your score has changed
  • Use your card with confidence, $0 Fraud Liability protection means you're not responsible for unauthorized charges you report to us
  • Chip card technology, so paying for your purchases is more secure at chip-card terminals in the U.S. and abroad

Earn 2 points per dollar spent on gas, groceries and utilities, and 1 point per dollar spent on everything else. The annual fee is $0. The ongoing APR is 25.24% Variable.

Benefits of the Barclaycard Rewards MasterCard®

  • The card doles out decent rewards and has a $0 annual fee, a rare combination among cards for people with thinner credit profiles.
  • There are no quarterly spending caps for earning rewards, and points never expire.
  • You’ll get a free FICO score and, in some cases, a credit line increase after you make five monthly payments on time.
  • There’s no penalty APR. That means that if you fall behind on payments, you won’t have to pay a higher interest rate. Even so, make it a priority to pay on time, as late payments can hurt your credit score. When your credit file is already thin, the damage from a late payment could be even greater.

Drawbacks of the Barclaycard Rewards MasterCard®

  • It doesn’t offer a sign-up bonus.
  • The ongoing APR is high. If you often carry a balance, you could end up overpaying in interest.
  • You must have at least 1,000 points to redeem rewards, which may be difficult for frugal spenders to reach.

The bottom line

The Barclaycard Rewards MasterCard® is a good pick if you spend a lot on gas, groceries and utilities. As long as you pay your balance in full every billing cycle and spend enough to meet the minimum redemption requirement, you’ll come out ahead on this $0 annual fee card.

Best for flat-rate cash back

Capital One® QuicksilverOne® Cash Rewards Credit Card

Apply Now on Capital One's secure website

Pros

  • Qualify with average credit
  • High rewards rate
  • 0% intro on purchases for 9 months and 0% intro on balance transfers for 9 months
  • No foreign transaction fee

Cons

  • Has annual fee

Bonus Offer

Earn unlimited 1.5% cash back on every purchase, every day

Annual Fee

$39

Intro APR Promotions

0% intro on purchases for 9 months and 0% intro on balance transfers for 9 months

APR

  • APR: 23.24% (Variable)
  • Cash Advance APR: 23.24%, Variable

Card Details

  • Earn unlimited 1.5% cash back on every purchase, every day
  • Every 10th Uber ride is free up to $15 when you pay with your QuicksilverOne card through March 31, 2017
  • No rotating categories or sign ups needed to earn cash rewards; plus, cash back doesn’t expire and there’s no limit to how much you can earn
  • 0% intro APR on purchases for 9 months; 23.24% variable APR after that
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Fraud coverage if your card is ever lost or stolen

Earn unlimited 1.5% cash back on every purchase, every day. The annual fee is $39. APR: 0% intro on purchases for 9 months and 0% intro on balance transfers for 9 months, and then the ongoing APR of 23.24% (Variable).

Benefits of the Capital One® QuicksilverOne® Cash Rewards Credit Card

  • Rewards are unlimited, and cash back doesn’t expire.
  • You can redeem rewards in any amount.
  • There’s an introductory 0% APR offer: 0% intro on purchases for 9 months and 0% intro on balance transfers for 9 months, and then the ongoing APR of 23.24% (Variable).
  • There’s no penalty APR.
  • This card has no foreign-transaction fees, making it a good card to take on an international vacation.

Drawbacks of the Capital One® QuicksilverOne® Cash Rewards Credit Card

  • It comes with an annual fee of $39.
  • There’s no sign-up bonus.
  • The ongoing APR is high, so carrying a balance can be expensive.

The bottom line

The Capital One® QuicksilverOne® Cash Rewards Credit Card’s biggest catch is its annual fee of $39. You’d have to put at least $2,600 on this card annually to break even on this deal. But if you’re planning on spending thousands of dollars, using the card’s 0% APR period or traveling abroad, it could offer more long-term value than other cards.

Best 0% APR offer

Chase Slate®

Apply Now on Chase's secure website

Pros

  • $0 annual fee
  • $0 Intro Fee on Transfers made within 60 days of Account Opening
  • 0% Intro APR for 15 months on purchases and balance transfers
  • Qualify with Good credit

Cons

  • No rewards

Bonus Offer

Save with a $0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.

Annual Fee

$0

Intro APR Promotions

0% Intro APR for 15 months on purchases and balance transfers

APR

  • APR: 13.24%-23.24% Variable
  • Cash Advance APR: 25.24%, Variable

Card Details

  • Chase Slate named "Best Credit Card for Balance Transfers" three years in a row by MONEY Magazine
  • $0 Introductory balance transfer fee for transfers made during the first 60 days of account opening
  • 0% Introductory APR for 15 months on purchases and balance transfers
  • Monthly FICO® Score and Credit Dashboard for free
  • No Penalty APR - Paying late won't raise your interest rate (APR). All other account pricing and terms apply
  • $0 Annual Fee

Save with a $0 introductory balance transfer fee, 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.. The annual fee is $0. 0% Intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 13.24%-23.24% Variable.

Benefits of the  Chase Slate®

  • Among cards on NerdWallet, this is the only one that has a $0 introductory balance-transfer fee, a $0 annual fee, and a long 0% APR balance-transfer period. This makes it one of the best balance-transfer deals on the market, for people at all credit levels.
  • You’ll get a free FICO score.
  • There’s no penalty APR.

Drawbacks of the  Chase Slate®

  • After the 0% period ends, you may want to avoid carrying a balance on this card. The ongoing APR can be high if you have fair or average credit.
  • The card doesn’t earn rewards, and there’s no sign-up bonus.
  • You can’t transfer more than $15,000 to this account, regardless of your credit limit. You also can’t transfer debt from other Chase cards.

The bottom line

The  Chase Slate® is one of the best balance-transfer cards on NerdWallet, period. It’s also available to people with fair or average credit, which means that you have a decent chance of getting approved with a thin credit profile. You won’t earn rewards on this card, but if you want to save on interest with the card’s 0% APR offers on purchases and balance transfers, it offers the best value.

Secured cards

Best secured card for rewards and upgrading

Discover it® Secured Card – No Annual Fee

Apply Now on Discover's secure website

Pros

  • No annual fee
  • 10.99% on balance transfers for 6 months

Bonus Offer

None

Annual Fee

$0

Intro APR Promotions

10.99% on balance transfers for 6 months

APR

  • APR: 23.24% Variable
  • Cash Advance APR: 25.24%, Variable

Card Details

  • Once approved, your minimum security deposit amount of $200 or more will establish your credit line (up to the amount we can approve).
  • Monthly reviews start at 12 months to see if you qualify to get your security deposit back while you continue to enjoy your Discover card benefits. Reviews are based on responsible credit management across all of your credit cards and loans.
  • No annual fee. No late fee on your first late payment. Paying late won't raise your APR.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Earn 1% cash back on all other purchases.
  • Discover matches all the cash back you’ve earned at the end of your first year - automatically. New cardmembers only.
  • Reports to 3 major credit bureaus so you can build or rebuild credit with responsible use.
  • FICO® Credit Score for free on monthly statements & online.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.

Double cash back your first year. Earn 2% cash back at restaurants and gas stations, up to a combined $1,000 in purchases each quarter, and 1% on everything else. The annual fee is $0. Introductory APR of 10.99% on balance transfers for 6 months, and then the ongoing APR of 23.24% Variable. Requires a deposit of $200 or more; your deposit is equal to your credit limit.

Benefits of the Discover it® Secured Card – No Annual Fee

  • The $0-annual-fee card offers a generous sign-up bonus and decent rewards, which are especially rare among secured cards.
  • You get a free FICO score.
  • There’s no penalty APR.
  • The card reports to the three major credit bureaus, helping you establish a credit history.
  • After a year of responsible credit use and on-time payments, you may be eligible to get your deposit back and upgrade to an unsecured version of the card.

Drawbacks of the Discover it® Secured Card – No Annual Fee

  • It requires a deposit of $200 or more.
  • The ongoing APR is high, so it’s not a good card to carry a balance on.
  • You need to have an annual income of $10,000 or more to get approved for this card.

The bottom line

Unlike most secured credit cards, the Discover it® Secured Card – No Annual Fee offers rewards, a free FICO score, and a way to graduate to an unsecured account. If your annual income is over $10,000 a year, and you’re looking for a card that will help you establish credit and potentially upgrade to an unsecured account, this card probably is probably your best bet.

Best secured card for low deposit: Capital One® Secured MasterCard®

The annual fee is $0. The ongoing APR is 24.99% (Variable). Requires a security deposit of $49, $99 or $200, for a credit line of $200.

Capital One Secured MasterCard Credit Card
Learn More
Benefits of the Capital One® Secured MasterCard®

  • You may qualify for a credit limit that’s much higher than your security deposit. This feature is relatively rare in secured credit cards.
  • The card has no penalty APR.
  • You can take up to 80 days to pay your security deposit in full. Other secured cards typically don’t give you as much time to come up with the deposit.

Drawbacks of the Capital One® Secured MasterCard®

  • It doesn’t offer a sign-up bonus or rewards.
  • It doesn’t provide a way for cardholders to graduate to an unsecured account while keeping the same account information. This means you’ll probably have to close your account if you want to get your security deposit back.
  • The ongoing APR is high, so it’s not a good card to carry a balance on.
  • You probably won’t be approved for this card if your rent is almost as high as your income. A bankruptcy on your credit report or no checking account might also disqualify you.

The bottom line

The Capital One® Secured MasterCard® is an excellent card if you’re looking for a low-cost way to build your credit from scratch. You won’t be automatically upgraded to an unsecured account, and you won’t earn rewards. But if you make on-time payments and don’t use too much of your available credit, this card could help you qualify for a better offer in the future.

To recap our selections:

NerdWallet’s best unsecured credit cards for people with a short credit history

Best for … Card
Gas & groceries Barclaycard Rewards MasterCard®
Flat-rate cash back Capital One® QuicksilverOne® Cash Rewards Credit Card
0% APR offer Chase Slate®
No credit history? Consider these secured cards
Best for … Card
Rewards and upgrading Discover it® Secured Card – No Annual Fee
Low deposit Capital One® Secured MasterCard®

Methodology

NerdWallet’s credit cards team selects cards in each category based on overall consumer value. Factors in our evaluation include fees, promotional and ongoing APRs, and sign-up bonuses; for secured cards, we considered the security deposit requirement, fees and other benefits.

Last updated June 20, 2016.

Claire Tsosie is a staff writer covering personal finance for NerdWallet. Follow her on Twitter @ideclaire7 and on Google+.