This page was originally published in late 2023 and reflects the author’s financial decisions during that time. 

Key takeaways

  • When used appropriately, credit cards can be powerful credit-building tools.
  • Depending on where you’re starting from, a secured credit card can be a good first step to building strong credit.
  • As you build a strong history with issuers, you may be able to move on to higher-level credit cards.

A credit card isn’t just a convenient payment method with nice perks, rewards and fraud protection. It’s also an effective, low-stakes credit-building tool.

In 2018, my credit score was infuriatingly fair, hovering around 620. It seemed as though nothing I did could help it. But then I got a credit card.

Fast forward three years, and my credit score is finally good (above 670). I’ve added some of the best credit cards to my wallet, refinanced my car to significantly save on interest and kept more money in my bank account using a 0 percent APR offer.

For those who are curious, I built credit with a credit card by doing the following:

Picking the right card

It’s 2018. I’m shopping for a credit card, not yet the credit card nerd I’ll later become.

I know enough to realize I don’t have the most exciting options. At this point, I think I’d be happy with any card issuer who would have me. (I’m wrong. There are plenty of fish in the sea of bad credit card and fair credit card options.)

Fortunately, I come across Capital One, which promptly approves me for the Capital One Platinum Secured Credit Card.

Maybe the Capital One Secured isn’t the best secured credit card out there, since some secured cards offer better rewards these days, but it’s definitely not a bad card. Bad cards, unfortunately, are also abundant. Clueless as I am, I’m lucky I haven’t come across one of those. And Capital One is a top issuer, meaning it’s good to start a relationship with.

Having been burned in the past, I barely use my credit card. And if I do, I pay it off right away. As a result, in six months, I get a credit limit increase from $200 to $500.

Keeping credit utilization low

It’s 2019. My career leads me to working in personal finance. It’s then that I start consuming countless articles about credit and learn from credit experts.

Now I know that my cautious approach has been a good one. I learn about credit utilization ratios — how much balance you carry compared to your credit limit, expressed in a percentage. It turns out that you shouldn’t use more than 30 percent of your credit line to keep your credit in good shape.

I do the math. If my credit limit is $500, I can carry a balance of up to $150 without hurting my credit.

That’s what I proceed to do.

Paying bills on time

It’s 2020. I’m still watching my credit like a hawk, and it’s been faring better. I’ve taken out a car loan, used Experian Boost to help my FICO score and begun learning more and more about credit cards.

I realize how many amazing credit cards there are, of all different types. My credit score isn’t high enough to qualify for them yet, so I keep my card balance low and religiously pay it off on time. I know now that a late payment is like a curse put on your credit reports for seven years, doing the evilest things to your scores, so I do my best to avoid being late.

Capital One sees my effort. The issuer triples my credit limit to $1,500, and my credit loves it.

Upgrading to a better card

It’s still 2020. I decide it’s time to start being proactive. Capital One knows I’ve been a responsible and loyal customer, so I call the issuer to ask to graduate me to an unsecured card.

Capital One is happy to do so. Moreover, a customer service representative tells me I’m preapproved for the Capital One Quicksilver Cash Rewards Credit Card.

My first rewards credit card. I’m so ecstatic, it feels like Christmas morning.

Staying strategic with credit cards

It’s 2021. After some fluctuations, my credit score is finally good — meaning I’ve crossed the 670 threshold.

I now have five credit cards, including some I only dreamed about, like the American Express® Gold Card, the Chase Sapphire Preferred® Card and the Discover it® Cash Back. I’ve gone beyond just making on-time payments. I’m keeping my utilization low to raise my score. I’m collecting rewards in the top points programs and juggling multiple cards to earn higher rates on all of my different kinds of purchases.

I don’t think I’ll be getting any new cards for a while. All the ones I have serve a purpose. They’re a mix I’ve created for my specific spending patterns.

I’ve come to the conclusion that credit cards are like pills for your financial health. If you know what you’re doing and follow what’s in the prescription, your credit and budget will be well. If not, side effects may include credit card debt and financial distress.

So, I keep following the prescription: Only apply for a credit card that you really need, keep your balances low and always pay on time.

My credit is healthy and so is my budget.

How you can implement these learnings in building your credit

Before I became intentional about credit building, some steps I took were intuitive and some of my successes were pure luck. Nevertheless, you can use my takeaways and build your credit with a credit card, too. It all starts with following these steps:

  1. Find the right credit card to become your credit-building tool. No matter where your credit is now, there are excellent products that can earn you rewards while improving your scores.
  2. Make a point to keep your balance low. It should be under 30 percent of your credit limit. Pay your bills on time and eventually, you’ll see your credit scores climb up.
  3. Track your credit to monitor your progress. This also means staying strategic about your credit cards. Each of your cards should have a purpose and fit your spending.

It may take a while to build your credit, but with these tips and some patience, you’ll see it grow soon enough.

Credit building strategies for 2024

This article was originally written in October of 2023, and Bankrate continues to stand by this advice and the experiences that led to it. For those reading in 2024, much of the credit advice given here still applies — to build your credit with a credit card, you’ll want to pay off your balance in full each month, avoid late fees and keep your credit utilization ratio low, among strategies we detail here.

Become an authorized user

If you don’t feel ready to own a credit card yet, consider talking to a trusted family member about becoming an authorized user on their account. If their card issuer reports authorized user activity to the three major credit bureaus, you’ll start building credit. But be careful — your credit card usage decisions will impact both of you. Make sure you’re on the same page with what your budget and payment plans will look like.

Keep an eye on your credit reports

In September of 2023, Equifax, Experian and TransUnion made their pandemic-era program of free weekly credit reports permanent. Make a habit of looking at your credit card reports every month or so to check for inaccuracies or signs of fraud—both of which can lower your credit score.

Note any positive income changes to your credit issuer

While you’re not obligated to update your income information when issuers ask, doing so can lead to potential credit limit increases, which can lower your credit utilization ratio. However, if you report a lower income than you had when signing up, you could ruin any chances of getting a credit limit increase in the near future.

The bottom line

There are plenty of benefits to knowing how to use a credit card to build credit. Never miss a payment, watch your card balances, be proactive and you’ll see your credit grow.

If you’re not sure where to start, use our CardMatch tool to pick a credit card that’s tailored to your credit and fits your needs. Checking the offers won’t impact your credit, and you’ll get card matches you have a good chance of being approved for.