Credit Cards for People with No Credit

Learning how to get a credit card for the first time with no credit history is a rite of passage for young adults after turning 18 years old. And it’s a lot easier to accomplish than you might think. The key to getting your first credit card is to choose wisely, by focusing solely on offers for people with limited credit and secured credit cards, which provide nearly guaranteed approval. You also need enough income to afford monthly credit card payments, in addition to your other expenses. The minimum payments on a starter credit card usually are around $15 per month.

If you’re at least 21 years old, you are allowed to list household income and assets to which you have reasonable access on your credit card application. If you’re younger, you can only list independent income and assets. And you can’t get your own credit card account until you’re at least 18 years old. But there is no minimum age for being an authorized user on a credit card, in most cases.

High approval odds are one of the most important things to look for in your first credit card because the sooner you get approved, the sooner you can begin truly building your credit standing. Getting rejected for a credit card sets you back, both in terms of time and by possibly damaging your limited credit.

Low fees are another key feature to seek out when applying for a credit card for the first time. Starter credit cards generally don’t offer rewards or interest rates worth paying high annual or monthly fees for. So you’re better off saving your money and always paying your monthly credit card bill in full to avoid interest charges.

Those are the two main tenets of finding the best first credit card: consider cards designed for people with limited or no credit, and try to get one with no annual fee. But there are other steps in the process. And to make things as easy as possible for you, we’ll lay them all out below.

Here’s How to Get a Credit Card for the First Time with No Credit:

1. See if you have a credit report and score. You could have more credit history than you think, perhaps as a result of being an authorized user on a family member’s credit card. This will help you determine how good of a credit card you should shoot for. You can check your latest credit score and credit report for free on WalletHub.
2. Determine whether student credit cards are an option. College students can usually get better credit cards than other people with no credit. Their youth and above-average expected income make them profitable targets for banks and credit unions. So if you’re enrolled in school, check out the best student credit cards.
3. Compare secured and unsecured starter cards. Secured credit cards have the highest approval odds, but they require you to place a refundable security deposit. And the amount of that deposit becomes your spending limit.
4. Limit your search to the cards with the lowest fees. Focus on weeding out cards with expensive non-refundable fees. A no annual fee credit card with no security deposit is best. But a low-fee secured card isn’t bad, either, because you can get back your deposit when you close your account.
5. Choose the best remaining offer for your needs. If several credit cards are tied for the lowest fees and highest approval odds, consider the terms that are next most important to you. If you plan to pay your bill in full every month, that will probably be rewards. If not, you may want to focus on interest rates.
6. Submit your credit card application. Apply online for the fastest decision. You may even be approved instantly if you clearly meet the issuer’s criteria. You should receive your card within 7-10 business days of being approved.

Finally, it’s really important to remember that getting approved for a credit card for the first time is really only the beginning. You also need to use that card responsibly, which means spending within your means, paying your bill on time month after month, and keeping your credit utilization below 30%.

If you can avoid racking up costly credit card debt and hurting your credit score with missed payments, your first credit card will be a huge asset. It will add positive information to your major credit reports each month. That will gradually improve your credit standing. And better credit will make it easier to rent an apartment, buy or lease a car, find a job, get approved for good loans and lines of credit, and save on car insurance premiums, among other things.

You can track your progress for free on WalletHub, the only site with free credit scores and reports that are updated daily. We’ll even tell you exactly what you need to do to improve your credit score at a given time, plus provide personalized credit card recommendations. You can use them to find your first credit card and then graduate from it when the time is right.

You can’t get a credit card at 16, at least not your own account. The law prohibits issuers from offering credit cards to anyone under 18. And even then, you’ll need your own income to qualify. These restrictions prevent minors and young adults from taking on unmanageable amounts of debt due to inexperience or youthful impulsiveness.

But you can get a credit card at 16 if a friend or family member makes you an authorized user on their account. You won’t be responsible for bill payments as an authorized user, but you will build credit as long as the primary cardholder pays on time. That’s not the only way to get access to credit in your teens, either.

Here are the alternatives to getting a credit card at 16: 

• Become an authorized user: There’s no minimum age requirement for authorized users.
• Get a job and wait two years: You can get your own credit card account when you’re 18, as long as you have enough independent income for monthly bill payments. You should get a student credit card if you go to college, as they tend to have much better terms than other starter credit cards. A secured credit card is a good backup plan, too.  
• Get a debit card: This won’t help you build credit, and you won’t be able to borrow money. But a debit card linked to your checking account will free you from having to carry cash all the time.

You can get a credit card at 16. You just can’t get an account in your own name. But if someone is willing to add you as an authorized user, you can start learning about, using and building credit. And in a couple years, you’ll be able to get your first card.

Insufficient credit history means that you don’t have enough experience as a borrower for a lender to approve you for a credit card or loan. Without a sufficient amount of information in your credit report, a financial institution cannot predict how you will handle borrowed money as accurately. So it’s common to see the term “insufficient credit history” on a letter of denial from a lender. But it may come up other times, too, like when you’re apartment hunting. Renters with insufficient credit history are more likely to be asked for money upfront.

Having insufficient credit history doesn’t mean you’ve done anything bad. It just means you’re inexperienced. And that won’t keep you from borrowing, building credit, finding an apartment, etc. You just have to choose wisely. For example, there’s an entire class of credit cards for people with limited or no credit. And using such a card responsibly will help you build a strong track record as a borrower, making insufficient credit concerns a thing of the past.

Here’s what insufficient credit history means and how to fix it:

• Insufficient credit history is a term that lenders use to tell you that there is not enough information in your credit report to approve you for a loan or credit card.
• If you have insufficient credit history, it might mean that you have less than 3 years of recent credit experience, a track record of credit mistakes, or just not enough experience with different types of borrowing.
• Insufficient credit history is something you can start to change in as little as a month. One way to start is to become an authorized user on someone else’s credit card. Or, you can apply for one of the many credit cards for people with limited or bad credit.
• There are plenty of credit cards for people with insufficient credit history, including secured cards (easiest to get, thanks to a required security deposit) and unsecured credit cards designed for applicants with limited or no credit history. As long as you have some form of income, you should be able to get a card.
• You can ask your local bank or credit union if they offer credit-builder loans. This is involves the financial institution depositing a small sum of money in your savings account, which you then repay over an agreed-upon number of months. The lender reports your payment history to the credit bureaus each month. And you get access to the savings account afterward.

You don’t need to feel too stressed about having insufficient credit history. But you should also strive to start building credit as soon as possible. Getting a credit card, making small purchases each month, and always paying your bill (in full) by the due date will set you firmly on the credit-building path.

You can check your latest credit score for free, and track its progress over time, on WalletHub.

Unfortunately, credit history isn’t something you can just build overnight. However the sooner you start, the better. First, you should check out our guide made for those who are new to credit. Then, you’ll need to find a credit card aimed at those with limited or no credit history. We recommend going here for our Editors’ top choices of limited/no credit history cards. Remember, you can always check your credit report for free, right here on WalletHub over at https://wallethub.com/free-credit-score/. Good luck!

The best credit cards for no credit and no bank account are Capital One® QuicksilverOne® Cash Rewards Credit Card and the Capital One® Platinum Credit Card, which don’t require a bank account. Both are designed for people who are new to credit. And you can even pay your Capital One credit card bills with cash at the nearest 7-Eleven, without having a bank account.

For more tips, you can read our guide on how to build credit. Remember that you can easily track your credit score’s progress, for free, right here, on WalletHub!