Building Credit: Secured Credit Cards for Military Recruits and Students

Choosing a military career or attending college is a big leap of faith. It's not just about exploring new opportunities; it's also about learning to make smart financial decisions. One of the best ways to build a strong financial foundation is to start building credit early, and secured credit cards are a great tool for that. But what are secured credit cards, and how can they help military recruits or college students build credit? As a military bank, we know a thing or two about this topic. Let's gather intel!

What Are Secured Credit Cards?

Secured credit cards are your boot camp for building credit. Unlike regular credit cards, secured cards require an upfront cash deposit. This deposit becomes your credit limit. For instance, if you deposit $500, that's the maximum you can spend. This credit-building strategy is a great way to establish trust with lenders, even if you are a credit rookie.

Why opt for a secured card instead of a traditional (unsecured) one? Well, if you don’t have a credit history, getting approval for a regular credit card can be a challenge. A secured card is the best way to build credit because it's more accessible, providing you with an opportunity to prove your creditworthiness. It's like a credit card with a safety net, ensuring you won’t overspend.

For a refresher on credit and its various concepts, refer back to our article: Your Guide to All Things Credit.

Why Should You Build Credit Early?

Building your credit as a military recruit or college student is crucial. It's not just about bragging rights; it also paves the way for future financial opportunities. A good credit score can make it simpler to rent an apartment, qualify for a car loan, and even get special security clearance. Plus, it can impact certain job opportunities! Some employers conduct credit checks to gauge your responsibility, especially for roles in government sectors or the financial industry.

Starting early sets you up for success when you are “adulting” for the first time. In fact, having a solid credit history helps your day-to-day life run smoothly, giving you the independence to make financial decisions without relying on family and friends.

How to Build Credit in the Military with a Secured Credit Card:

Building credit with a secured card is like planting a flag on new territory and watching your base expand. Here's how to build credit while in the military or college:

1. Choosing the Best Secured Card

The first step is picking the right secured credit card. Choose one with low fees, a reasonable deposit requirement, and that reports to all three major credit bureaus (Experian, Equifax, and TransUnion).

2. Making a Security Deposit

Your deposit determines your credit limit. Begin with a manageable amount—roughly $200-$500—to avoid stretching your budget too thin.

3. Using Your Card Responsibly

Make small, regular purchases—like groceries or gas—that can be paid off each month. Try to maintain a balance that is below 30% of your credit limit to preserve a good credit utilization ratio.

4. Paying Your Bill on Time

Just like staying on schedule during a mission is critical for success, it’s also essential to pay your credit card bill on time every month. In fact, making consistent and timely payments are one of the most important factors in building a positive credit history.

5. Monitoring Your Credit Score

Check your credit score consistently. Many secured credit cards offer free access to your credit score. This can help you understand the impact of your financial habits and credit usage.

6. Avoiding Common Pitfalls

Avoid maxing out your card, missing payments, or applying for too many credit cards at once, as these can hurt your credit score.

7. Upgrading to an Unsecured Card

After several months of consistently making on-time payments, you might qualify for an unsecured credit card. This type of card doesn’t require a deposit and can offer more financial benefits.

Best Credit Card to Build Credit While in the Military or College:

Ready to deploy your credit journey? A secured credit card is your perfect ally, especially if you’re new to the credit world or wanting to raise your credit score. Armed Forces Bank’s Credit Builder Secured Visa® Credit Card is a great match for military recruits and college students who want to build credit in straightforward and convenient way. Your cash deposit sets your spending limit, helping you stay in control while you establish reliable credit habits.

Here’s why Armed Forces Bank’s Credit Builder is one of the best credit cards for building credit:

• Choose your own credit limit, from $300 to $3,000
• Automatic reporting to the three major credit bureaus to help establish your history
• No application fees, annual fees, or over-limit fees
• Simple application process—just have your ID, social security number, and a few other details ready
• Fast and secure online transactions with Visa® Checkout

Ready to make a move? Apply for our Credit Builder Secured Credit Card, get tips on managing credit, or use our financial calculators to make a game plan (including the Credit Assessment Calculator and Credit Card Pay Off Calculator).

Member FDIC

Subject to credit approval. Transaction and Penalty fees apply. Credit Builder Savings account required. $5.00 quarterly fee charged to the Credit Builder Savings account if not enrolled in eStatements. Improved credit score is not guaranteed. Credit score is determined by credit reporting agencies based on multiple factors, but satisfactory performance on a credit card product can improve your credit score. Default on a credit card, including missed or late payments can damage your credit score. Once added, funds cannot be withdrawn from the Credit Builder Savings account and the Credit Builder Card without closing the savings account and the credit card.