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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 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
  • No foreign transaction fee

Cons

  • Has annual fee
  • High APR

Bonus Offer

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

Annual Fee

$39

Intro APR Promotions

N/A

APR

  • APR: 24.99% Variable APR
  • Cash Advance APR: 24.99%, Variable

Card Details

  • Earn unlimited 1.5% cash back on every purchase, every day
  • 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
  • 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
  • Use online banking to access your account, even from your smartphone, with our mobile app
  • Help strengthen your credit for the future with responsible card use

Earn unlimited 1.5% cash back on every purchase, every day. The annual fee is $39. APR: The ongoing APR is 24.99% Variable APR.

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 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 24.99% Variable APR, 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 and 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

  • No annual fee
  • $0 Intro on balance transfer fees made within 60 days of Account Opening
  • Long 0% Intro APR Period

Cons

  • No Rewards
  • Can't transfer debt from another Chase account

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% on Purchases and Balance Transfers for 15 months

APR

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

Card Details

  • $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% on Purchases and Balance Transfers for 15 months, and then the ongoing APR of 13.24% - 23.24% Variable APR.

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 APR
  • Cash Advance APR: 25.24%, Variable

Card Details

  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • A security deposit of $200 or more will establish your credit line (up to the amount we can approve). Automatic monthly reviews starting at 7 months to see if we can transition you to an account with no security deposit.
  • 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.
  • Tools to assist you; email alerts, text reminders and 24/7 customer service. Plus get your FICO® Credit Score for free on monthly statements and online.
  • Discover matches all the cash back you’ve earned at the end of your first year - automatically. New cardmembers only.
  • No late fee on your first late payment. And paying late won’t raise your APR.
  • 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 APR. 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 seven months 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 APR. 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+.