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The Best Credit Cards in America: Student and Secured Cards

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Welcome to the second installment of The Best Credit Cards in America. In this edition, I’m giving awards for the Best Student Credit Card and the Best Secured Credit Card in America.

The category winners are the cards that score the highest number of points based on a unique, 41-factor formula I designed. The formula gives each card a “benefits/rewards score” and then subtracts the “costs score.” Using my formula, a “perfect” card gets a score of 100.

Since students are getting ready to go back to college, this seems like the right time to look at student credit cards. Many experts will disagree with me, but I think college is a great time to learn how to use a credit card. Hey, I even think high school is a good time if you have a kid who can handle it.

[Free Resource: Check your credit score and report card for free before applying for a credit card]

VIEW OTHER WINNERS
Best Airline Miles Credit Card
Best Low Interest Credit Cards
Best Travel Rewards Credit Cards
Best Cash Back Credit Cards

This only works, however, if the parent is very involved and keeps an eye on things. Leaving college with a good credit history gives your child a head start in life. Right away, they’ll save money on loans, insurance and other life necessities.

If your kid isn’t ready for a student card—and, really, you’re the only one qualified to make that call—consider a secured card. It’s like a credit card on training wheels, so to speak. Secured cards are also an excellent choice for those who are still recovering from the recession and who need to rebuild their credit. Use these cards responsibly, and you’re on your way to an improved credit history.

Okay, so let’s move along to the winners and find out what makes them so awesome.

The Best Student Credit Cards in America »

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  • http://paulscreditguide.blogspot.com/2011/07/are-student-credit-cards-worth-it.html Paul’s Credit Guide

    Great advice here! Thanks

  • Shannon

    Thanks for the solid advice regarding secure credit cards. I am ready to apply for your top two secured cards, Orchard and Citi, but would like to know first, Do either of them report to the credit bureaus AS SECURED CARDS? Which from what I understand CAN HARM YOU POOR CREDIT EVEN WORSE. I REALLY cannot afford to do this and start from the bottom again.
    Thanks for any info

    • Beverly Blair Harzog

      Hi Shannon–Congrats on taking the steps to improve your credit! These cards are not reported to the credit bureaus as secured cards. Your credit report will list this as a revolving credit account. And FYI, a secured credit card also looks just like an unsecured card so you don’t need to worry about that, either. Best wishes for success!

      • Timothy Baker

        I would like to say that you are wrong when it comes to Citi Bank not reporting there secured card to the credit bureaus as a secured card. I I’m closing my citi bank account as we speak for that same reason..

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  • Nellie

    I am a member of Navy Federal Credit Union & I plan on obtaining a secured credit card with them. Thank you for this helpful information! I wanted to know if the NFCU nRewards card will be flagged as a secured credit card on my credit report. Also, do you know how long I would have to keep this card until I am able to apply for an unsecured credit card? Thanks!

    • Beverly Harzog

      Hi Nellie–I’m glad this was helpful to you! A secured card is not flagged on your credit report. it’s reported to the bureaus the same way as unsecured cards are.

      You have the perfect attitude! You can use the secured card to work your way back to an unsecured card. There’s no magic number, but if you use your card responsibly, it will probably take about 12 to 18 months. Best wishes for success!

  • K.J.

    Hello. I currently don’t have credit and wanted to obtain a secured credit card to start establishing credit. I have school loans out that are in deferment but no other things on my credit report. I contacted Navy Federal Credit Union today and they said I would be able to apply. They took my information and are waiting on me to send identification verification to process my application. I just would like to know is this truly the best secured card for my circumstances. I know you stated that this card was hands down the best secured card to get if one could apply because of the armed forces connection. But I was looking at some of the comments from people say that even after a year or more with good standing with the card and bank they do not automatically offer you unsecured credit card. That they do not offer it to you after a term but you have to apply for one. And most people said they were denied when they tried. That Navy Federal doesn’t really take your current good standing with the secured card but still more so focuses on you past credit history. I want to know should this really be a concern for me in regards to this matter in trying to eventually get an unsecured credit card with them. And just take in the consideration of all the advantages the card has and when the time is present apply for a unsecured credit card somewhere else with another company. I am really kind of stuck on what I should. In your opinion in me telling you this and situation. Would Navy Federal’s secured card still be the best cared over the Orchard and Citi. Also do you know if the money you deposit with them for the card, does it earn interest. And also do they report to all 3 credit bureaus monthly. I truly appreciate your response and help Ms. Harzog. I am just really confused on the best bank and card I should go with that will benefit me the most in the short and long term. I just don’t want to make a critical mistake because I don’t have any one around me to guide me in this matter and concerns and really can’t afford a mistake. Thank you for your help.

    • Beverly Blair Harzog

      Hi K.J.–Thanks so much for your comment. Picking the right card is, indeed, confusing. Believe me, most people feel the same way! I do think that the Navy Federal card is the best secured card for those who qualify. You get rewards with the card, but you don’t get interest on your deposit. This card does report to the credit bureaus.

      Credit history is very individual so it’s hard to say why the folks you mentioned didn’t get upgraded to an unsecured card. My recommendation is to get the Navy Fed secured card and use it responsibly for at least a year. Then, check your credit score to see if it’s risen enough to qualify for an unsecured card. If Navy Fed doesn’t have an unsecured card you can qualify for, consider applying for the Orchard Bank card. By then, you’ll have a chance to get the unsecured version.

      Trying to get your credit history back on track takes time so think of the secured card as a stepping stone to an unsecured card. The first unsecured card you get might not be the card of your dreams, but you’ll be on your way improving your credit history and you’ll eventually qualify for a card with better terms.

      I commend you being so determined to make the right decision! I’d love to hear about your progress. You can reach me at creditexperts@credit.com.

      • K.J.

        Thank you, Ms. Harzog. I appreciate you responding to my message. I Thank you for your insight and guidance. I will go with Navy Fed and make sure I keep the car in good standing by paying of my balances. I will be sure to keep you updated with my progress. Thanks you again for answering my questions, it is much appreciated

  • Pasqual.

    I have filed for bankruptcy and it has been discharged, now I have to rebuild my credit, can I do this with you with secured credit.

    • Beverly Blair Harzog

      Hi Pasqual–A secured card is a good way to start rebuilding your credit. With a secured card, you need to make sure they report your credit history.The cards listed in my blog all report to the major credit bureaus. Good luck to you!

  • wakeupmpls

    Can you apply for a secured cc while still making Chapter 13 bankruptcy payments?
    I have about 2 years of Chapter 13 bankruptcy payments left.

    • Beverly Harzog

      wakeupmpls–I asked a bankruptcy attorney and was told that a debtor in a Chapter 13 bankruptcy case is not usually permitted to add new debt during the course of the case unless the court approves it. The attorney said this goes for secured as well as unsecured debt.

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  • Roy Cato

    Take a look at the new USAA secured mastercard or american express.

  • Taffy

    Is it easy to get a secured visa card? I want to re-establish my credit.. My credit is not very good at all… Do the application have to be approved?

    • Beverly Harzog

      Taffy–Getting a secured card is a good way to rebuild your credit. Unless you’re in the middle of bankruptcy proceedings, it’s usually easy to get approved since you have to provide a security deposit. Take a look at the card suggestions I’ve made in this blog and perhaps one will fit your needs. I wish you the best while you work on improving your credit!

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  • Pamela anderson

    Hi I would like to know how often is your FICO score re-calculated or redetermined, so to speak.

    • Beverly Blair Harzog

      Pamela–I’m not a FICO score expert, but it’s my understanding that your score can change pretty much constantly. There are so many factors involved and the value of each factor can change based on what’s being reported to the bureau that day. A free and easy way to get an estimate of your credit score is Credit.com’s Credit Report Card, https://www.credit.com/ufg/default/ccom_credit_report/.

      You can buy your FICO score for about $19.99 on myFICO.com, but that gets expensive if you want to monitor it frequently.

  • Cheryl

    Hi Beverly. I know this may be a stupid question but do you have to be a student to apply for a student credit card. I’ve already graduated from college and am wanting to go back for grad school, but I’m not currently in school at the moment.

    • Beverly Harzog

      Hi Cheryl–There are no stupid questions when it comes to credit cards! You do have to be a student to apply for a student card. These cards are designed to help those who are in school. But since you’re planning to go back to grad school, perhaps you’ll qualify for one soon.

  • Barbara

    I am confused … when I use a secured card to re-establish my credit … do I pay it off in full every month or do I carry a balance? I am so used to paying cash for everything it is really hard not to pay it off every month.

    • Beverly Blair Harzog

      Barbara–I know this stuff is confusing! A secured credit card works just like a regular credit card when it comes to paying your bill. You can pay off the balance completely during the grace period and avoid paying interest. Or you can revolve a balance, which I don’t recommend.

      You do want to use your card for a few purchases every month so you can show that you can buy things on credit and then repay the bill on time. This will help rebuild your credit as long as the card issuer reports to the major credit bureaus. The secured cards I’ve highlighted in the article all report to the bureaus. If you have more questions about the process, just let me know.

  • http://AOL Ken,

    I think credit.com do a wonderful job with informing the general public with their credit issues, I plan on asking ms. Herzog a few questions after this note letting you know how great you truly are.

  • http://AOL Ken,

    Ms. Herzog, my credit is poor, after coming from under bankruptcy after a divorce 10 years ago, I will be shopping around for a couple of secured cards, I did get an unsecured card from Orchard several months ago with a very small credit limit, I’ve been paying the min. to try and build up my score. I spoke with Navy fcu and they do have a min. and max. deposit limit of 500 dollars to 25,000, does it matter the amount of security deposit one places on a CD for the cards to help to get to an unsecured card. I plan on doing some traveling soon so I do want a large credit limit, but I also want to earn interest on my deposit, so which cards would you suggest for me?

  • Tarie

    I have a CapOne secured MC. Currently my limit is at $2500 and it doesn’t report as secured on the report. I plan on keeping the card well after my score improves

  • Samantha

    Hi, I was wondering about a secured credit card. I am trying to rebuild my credit score, and know that A secured credit card is a great way to start, however I was wondering whats the best limit to have. I was going to get one card at NFCU and then one with USAA both secured, with a $500.00 limit each. But would it benefit my credit report to get one at each for $500.00, or just one card with NFCU with a limit of $1000.00?

    • Beverly Harzog

      Hi Samantha–Since the total credit limit would be $1,000 whether you have two cards or one, it won’t make any difference to your score. But that’s a great question and you’re thinking about this the right way.

      I’d stick with one secured card (NFCU) and a credit limit you know you can handle.
      At this time, just focus on using the card responsibly and over time you’ll improve your credit history.

  • Nicole

    Is it possible to be denied for a secured card through navy Federal credit union? I have become a member and am waiting for the $500 to transfer from my current bank acct. I know my credit is in the low 500′s and am trying to bring it up. Thanks for all of your help!

    • Beverly Harzog

      Nicole–It’s possible to be denied, but if you are, give them a call and ask to be reconsidered. If it doesn’t work out, apply for another secured card. But you’re doing the right thing. Using a secured card responsibly is a good way to improve your credit score.

  • stacy

    Do you have to pay off all of your current bad credit first before trying to reestablish new credit? Would this work best if bankruptcy was done first? I am just confused from reading the other post. Sounds like everyone have cleared up the bad credit first in some form.

    • Beverly Harzog

      Stacy–it’s a good idea to have all the debt behind you so you can start fresh with a secured card. But some secured cards do allow for balance transfers. The Orchard bank credit cards do. If you have a lot of debt, though, you might consider talking with a credit counselor so you don’t end up in a situation with more debt.

  • Lyla Burns

    Thank you for this information on best student credit cards! I really hope that I can qualify for the Discover card! I’m going to apply for credit cards this weekend. Thanks for the great post!

  • Sanrica Mayes

    Hi, I just got approved for a Visa Secure Card from Navy Federal and have a limit of $500.00 and i was wondering is the payment protection plan really neccessary for me to have since its a low line of credit or should I just get it anyway in case my limit increase? I know it’s probably a crazy question but I would surely appreciate your feedback. Thank You.

    • Beverly Harzog

      Hi Sanrica–First, congrats on being approved for the card! As for the payment protection plan, I’d pass on it. Too often, these are costly and have many loopholes. Instead, put the money you’d pay for this in your emergency fund. You can use your emergency fund money if you ever have a problem making a payment. But do your best to avoid carrying a balance and hopefully this won’t be an issue.

  • kedisha

    hi im a current college student and i have no credit history watsoever and i would like to establish one so i can start building my credit , i would like to know if a secured credit card is rite for me and if yes which banks should i apply to for one , your advice would be appreciated.

    • Michael Schreiber

      Kedisha– apologies for the delay… can you move this question over to our Forum: http://forum.credit.com
      Thanks,
      Mike

  • terry

    Hi Beverly..Thanks so much for the credit card advice! I have a question. I have an unsecured credit card with NFCU with a $3000 limit, and I am at 2900.00. Which is more beneficial, paying off the current card to lower my ratio or pay half of it off and get a secured card with the remaining money so that 2 cards are being reported? Let me also add that my credit score is around 590-600, and I have some old debt to clear up as well that equals the cash that I have available. I need to know which is more important at this time, in order to raise my score the fastest.

    • Michael Schreiber

      Terry — apologies for the delay… can you move this question over to our Forum: http://forum.credit.com
      Thanks,
      Mike

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  • DM

    Is it better to leave a very small balance on the card so they issuer earns a little interest – OR pay off the balance in full every month? Also, does charging your regular bills (cell phone, etc..) to the card & paying them off every month count? I don’t need to buy consumer-ish items I don’t need just to re-build my credit after a bankruptcy. In other words, does it ever matter “what” you charge to the card, is it looked at differently in some way – good or bad? I’d rather try paying my fixed expenses this way and kill two birds with one stone as they say…

    • Michael Schreiber

      DM — apologies for the delay.. can you move this question over to our Forum: http://forum.credit.com
      Thanks,
      Mike

  • Fred

    My questions is! Once you open account at NFCU with $500.00 for the Secured Visa can you add to it and increase your credit limit?

  • Canija

    The Citi Secured Card isn’t available anymore :(

  • luis

    does anyone know if i have to be in the military to get approve for a Navy federal Credit union credit card.?

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