We recommend a $300 secured card, spending only $60 monthly (20% of the limit) on essentials like gas or groceries. Pay the balance in full and on time to keep utilization low and show responsible credit use to TransUnion, Equifax, and Experian. Some people have a credit history but no active credit card; lacking one may drop a FICO score from 700 to 650, even with the same payment history.
Secured cards are better than car loans, which often carry 16-27% interest rates for subprime borrowers, leading to costly payments. A $300 deposit acts as collateral, minimizing risk. Many cards, like those on NerdWallet (www.nerdwallet.com), have low fees and report to all bureaus, boosting your credit profile.
NerdWallet highlights the Discover it® Secured Credit Card, with no annual fee, cash back, and a $200 minimum deposit. After seven months, Discover may upgrade you to an unsecured card, refunding your deposit. Responsible use can boost your FICO score by 30+ points in six months, even for those rebuilding credit.
Car loans burden you with high interest, while a secured card teaches credit management and maintains active credit accounts. After 6-12 months of good habits, you’ll qualify for better loan terms. Patience and discipline—spend modestly, pay on time—are key to credit growth.
At Honest Car Payment, we champion smart choices. A $300 secured card with a $60 monthly spend is a low-stakes way to build or maintain credit. Visit NerdWallet’s top secured cards list to start your journey and prepare for goals like car financing with confidence.