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So, you don’t like credit cards. Maybe you had a bad experience with an overwhelming balance. Maybe you like the simplicity of paying with cash. While your reasons may be perfectly valid, building an excellent credit score usually comes from experience with different types of credit accounts. The good news: there is generally a credit card for every need and personal preference.

Gaining Credit Experience

A challenge that comes with securing credit is that you usually must first demonstrate credit experience. If your credit file is thin, a secured credit card can help you develop it. Unlike traditional credit, secured credit cards require you to put down a cash deposit ahead of time, acting as your “limit.” This allows you to gain credit experience while also budgeting the amount of money you plan to spend with your card.

Your payment history is typically reported to the credit bureaus with secured credit cards, just as it is with the other types of credit cards (though you may want to double-check with a prospective issuer just to be sure). As a bonus, many card issuers allow you to convert your account to traditional unsecured credit after a successful given period of time, enabling you to potentially improve your credit utilization ratio, which represents 30% of your credit score.

The Discover it Secured credit card (which you can read a full review of here) is one option for credit newbies looking to gain credit experience. A $200 minimum deposit is required to open an account, which may be refundable after 12 months. You’ll also earn rewards like 2% cash back at restaurants and gas stations (up to $1,000 in combined purchases) each quarter, and 1% cash back on all other purchases. The Discover it Secured credit card also comes with no annual fee and a standard variable annual percentage rate (APR) of 23.24%.

Repairing Your Credit

If you have an experienced yet damaged credit history, you may still qualify for certain types of traditional (unsecured) credit line. Consider using a retail credit card to establish good payment habits and lengthen your credit history. For example, Emporium is a shopping site that allows customers to open a line of credit and pay for their purchases over time by making equal monthly payments.

The Emporium Black credit card does not have an annual fee or interest fees (as long as the items are paid for during the promotional period, typically six to 12 months). You’ll receive an early payoff discount if you pay sooner. However, you’ll want to use the leasing payment options with caution. Extending your payment terms will drastically increase the interest you pay.

And, in general, if you take out a store credit card to build credit, be sure to read the terms and conditions carefully and try you best not to carry a balance That’s a basic best practice with all plastic, but these cards typically carry higher APRs than traditional credit cards.

Rewarding Yourself for Traveling

As if going somewhere new isn’t reward enough — paying for it with a travel rewards credit card can give you more to love about jet-setting. Habitual travelers have ample opportunity to use their credit as a lifestyle tool. Keep in mind, these cards are typically meant for people who have good credit, so you may want to review your credit before applying so you don’t get hit with a hard inquiry just to ultimately be denied for the credit card. (You can see two of your credit scores for free, updated every 14 days, on Credit.com.)

One such card is the Discover it Miles credit card, which boasts no annual fee and a 0% APR for the first 12 months (with a variable 11.24% — 23.24% APR after that, depending on creditworthiness). As we mentioned, you’ll need good credit to qualify for the Discover it Miles card, but the benefits can be worth it if you travel. For example, the issuer will match all the miles you earn within the first 12 months, and you’ll earn 1.5 miles miles for every dollar you spend. When you redeem these rewards, there are no blackout dates or airline restrictions. Plus, you’ll receive an annual $30 credit for in-flight Wi-Fi.

Getting Cash Rewards

You may not like to use credit because you prefer cash, but what if your card paid you back for your purchases? Cash rewards are an attractive benefit for those who have achieved good to excellent credit. Take the Chase Freedom Unlimited credit card, for example. This card (which you can read a full review of here) offers an unlimited 1.5% cash back on purchases, which is redeemable at any time (no minimum amount required). And, when you initially get the card, you’ll receive a $150 bonus after spending $500 within the first three months. There is no cash back expiration date or annual fee tied to the card. Plus, you’ll enjoy a 0% APR for the first 15 months (followed by a 14.24%, 19.24%, or 23.24% variable APR, based on creditworthiness).

Reaping Credit Card Benefits

It can be difficult to change your perspective of credit, especially if you have struggled with it in the past. The best strategy is to use your credit card benefits by keeping a few key points in mind.

  • Risk and Rewards: Using credit requires money management skills. Paying your bills late can damage your credit, while carrying a balance month to month can make the rewards you get from a credit card not worth it because of the high interest charges.
  • Lifestyle: Choosing the right card for your lifestyle is important. Consider your needs and current credit status to make the best selection.
  • Credit Score Improvement: Using credit wisely can help boost your credit scores over time. You can understand more about how to use your account successfully by learning about more about your credit scores.

At publishing time, the Discover it Secured, Emporium Black, Discover it Miles and Chase Freedom Unlimited cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: JackF

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Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

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