Credit Cards for People with No Credit

By: Odysseas Papadimitriou, WalletHub CEO

If you haven’t yet built any credit, there are a number of credit cards that you’ll be able to get (including those listed on this page), so don't worry, there isn’t a trick to finding one. However, you must be careful to stick to credit cards specifically geared toward people with no or limited credit. If instead you apply for a credit card for fair or good credit, not only will you not get approved, but you may also put yourself at a greater disadvantage thanks to credit score damage coming as a result of repeated hard inquiries into your credit report.

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/.