Credit Cards for People with No Credit

By: John Kiernan, Credit Card Editor

You don’t need credit to get credit. And anyone who is beginning his or her credit career should remember that. In fact, getting plastic for the first time is pretty straightforward. You just need to follow a few simple steps.
 

Here’s what you need to do to get a credit card with no credit history:

1. Confirm you have no credit – You may have some credit history without even realizing it. This could have come from being an authorized user on a parent’s credit card account, or it could be some sort of a mistake. And it could either put you in line for a better starter credit card or make it harder to get approved.
   
   So it’s a good idea to at least see if you have a credit report and score at this point. You can check both for free on WalletHub.

2. See if your school email still works – College students typically get much better credit cards than other credit newcomers. So if you have an active “.edu” email address, it will be an asset in your credit card search.

3. Compare starter credit cards – You have to comparison shop if you want to find the best credit card deal. Your top priority should be getting a card with no annual fee whose other terms complement your spending and payment habits nicely.

4. Submit your application – Actually applying for a credit card is the simplest part of the process. Just click “Apply Now” when you find your favorite offer, and we’ll redirect you to the issuer’s secure online application page.

5. Get a secured card, if necessary – If you don’t get approved the first time you apply for a starter credit card, place a refundable deposit on a secured credit card. Secured cards have the highest approval odds because your deposit usually matches your spending limit.

Once you open a credit card account, make sure to use it responsibly. Above all else, that means paying your bill on time every month and keeping your credit utilization as low as possible. That will ensure your credit score starts strong and stays headed in the right direction. You can track your progress for free on WalletHub, the first and only site with free daily credit score updates.

By: Odysseas Papadimitriou, WalletHub CEO

Your ultimate goal in using a no credit credit card is building credit as efficiently and cost-effectively as possible. The best way to accomplish that is to get into the habit of paying your bill on time and in full every month. If you can do this, you’ll render your card’s interest rate effectively irrelevant and make the annual fee your main consideration in comparing credit cards for people with no credit history. Should you find multiple cards with the same low annual fee, shift your focus to maximizing your rewards.

By: Odysseas Papadimitriou, WalletHub CEO

There are essentially three different types of credit cards for people with no credit: college student credit cards, unsecured no credit credit cards, and secured credit cards. College student credit cards usually offer the best terms because banks are eager to establish long-term relationships with people who are getting undergraduate degrees and are on their way to getting above-average-paying jobs. Unsecured credit cards for people with no or limited credit are for everyone else that is new to credit and usually have higher rates and fees. Secured credit cards are available to literally anybody, even people with poor credit, because they require a refundable security deposit that protects issuers against default. All three types of credit cards for no credit will report to the major credit bureaus and thereby help you build up your credit standing.

With the exception of the credit cards for college students, which are obviously geared toward a specific customer segment, no credit history credit cards are not only used by young people, but by recent immigrants, divorcees and widows as well.

By: Odysseas Papadimitriou, WalletHub CEO Store cards are in theory a good way to begin building credit, given that they report to the major credit bureaus and people with no credit often manage to get approved for them. However, stores often do not list the minimum credit levels required to open their credit cards and it is therefore difficult to determine which store credit cards cards are attainable. In light of the fact that multiple failed credit card applications are bad for your credit, blindly applying for a store card isn’t a wise play. You should therefore avoid store cards in the early stages of credit building and instead stick to credit cards specifically targeted to people that are new to credit.

By: Odysseas Papadimitriou, WalletHub CEO

Credit cards for people with no credit history differ from other credit cards in two ways. First, the underwriting standards that banks use are specifically geared toward applicants with thin credit files or no credit information to speak of. Second, the terms offered by these cards lie somewhere in the middle of those provided by their bad credit and good credit counterparts. Banks are willing to give the benefit of the doubt to people using credit cards for new credit and therefore offer decent rates and fees, but their generosity only extends so far.

By: John Kiernan, Credit Card Editor

The easiest way to apply for a credit card is to do so online, but applying through the mail or over the phone are options, too. You just need to find a card that fits your credit standing and financial priorities, fill in some personal information on the application form, and wait for a response. You’ll receive a decision within a few days, if not immediately.

You can read more about the process of applying for a credit card, here: https://wallethub.com/edu/ways-to-apply-credit-card/25512/.

By: John Kiernan, Credit Card Editor

A secured credit card is a credit card that requires you to place a refundable security deposit, the amount of which usually serves as your spending limit. This reduces risk for the issuer, allowing them to approve more applicants and charge lower fees. And that’s what makes a secured card so great for (re)building credit.

Find out more about secured credit cards here: https://wallethub.com/edu/secured-cards/19575/.