How To Get A Credit Card With No Credit

Getting a credit card with no credit history is possible! Your choices may be limited on what cards you have access to, but there are options out there to help build your credit. Lenders may be hesitant to offer credit to those who appear risky — with no credit history, there is virtually no information on you as a borrower, so it’s hard to assess your financial behavior.

The good news is that there are certain things you can do to increase your chances of getting approved for a credit card with no credit. Keep reading to learn how to get a credit card even if you have no credit.

Can You Get A Credit Card If You Have No Credit?

Yes, you can get a credit card if you don’t have any credit, though your options might be more limited.

For instance, premium unsecured credit cards that offer lucrative rewards programs are not available to consumers with no credit. However, you might be able to open a less exclusive credit card or a secured credit card. With the latter, you will need to put down a refundable cash deposit that acts as your credit line. Whichever credit card you end up getting, you can use it to build up your credit over time.

No Credit Vs. Bad Credit

Having a bad credit score means that you have a credit history, but there are numerous negative marks on it. For example, you can get a bad credit score if you’re consistently late or miss your loan payments, declare bankruptcy or have your loans go to collections. Having no credit history means there are no records of your credit behavior. So, if you were to try and look for your credit history, you most likely won’t be able to find one.

What To Look For In A First Credit Card

You can get a credit card if you don’t have any credit, but you may not get an offer from every credit card issuer. Part of your research will be looking for the institutions mostly likely to issue you a card.

When you’re shopping around for a credit card with no credit, be sure to consider the following factors:

• APR: Credit card APR refers to how much you’ll pay every year to borrow money on a credit card. While the ideal credit card APR is 0%, that’s not always available. Especially with no credit history, you should expect a higher than average APR. Still, try and find the lowest one for your financial profile and pay off your balance in full if you can. That way, you can avoid paying interest altogether.
• Reward programs: Credit cards offer a wide variety of rewards. Some of the most common rewards include sign-up bonuses, cash back for certain purchases or paying off your total balance, hotel or travel incentives and retail store rewards. Don’t be discouraged if you can’t secure a credit card with all of your desired rewards yet. Typically, the most rewarding credit cards are available to borrowers with a good credit history.
• Fees: Unfortunately, not all credit cards are free to use. Some charge an annual fee that may range anywhere from $25 to more than $500. In addition to an annual fee, most credit cards have many other types of fees, including for late payments, balance transfers, foreign transactions and more. Find out what fees a credit card will impose on you before you apply. Compare these fees to your budget and lifestyle to determine whether the card is a good fit. For example, if you travel internationally often, then you will want to avoid cards with foreign transaction fees.
• Credit limit: The credit limit refers to the maximum amount of money you can spend on a credit card. If you hit this limit, then you will “max out” your card. In most cases you can only secure a high credit limit if you have a strong credit history. This means that if you don’t have a credit history at all you can’t expect to get approved for a credit card with a high credit limit.

Types Of Credit Cards For People With No Credit

There are several types of credit cards that have a higher chance of approval for those with no credit, including:

• Secured credit cards: You will need collateral to apply for a secured credit card. Essentially, it’s a cash deposit that’s usually equal to your credit limit. The deposit is refundable — in time, you may be able to qualify for or get upgraded to an unsecured credit card and get your deposit back.
• Store cards: While store credit cards are easier to get approved for than traditional credit cards, they can usually only be used at particular retailers. Credit card limits for store cards tend to be low, though they may offer a rewards program for extra perks at the retailer.
• Student credit cards: Student credit cards are specifically designed for college students and can be a great way to establish credit history. Criteria you’ll most likely need to meet include being at least 18 years old, proof that you’re a student, and meet outlined income requirements.

How To Get Approved For A Credit Card When You Have No Credit

Aside from having a Social Security number and proof of income or employment, you can try the following strategies to get approved for a credit card with no credit history:

• Adding a co-signer: When someone co-signs your credit card, they guarantee that they’ll pay your balance in full if you’re unable to pay it. The benefit of being approved for a credit card with a co-signer is that as long as you pay the balance, you’ll be able to build your credit like you would if you didn’t have a co-signer. Generally, a co-signer will need to have an excellent credit history. It may be difficult to get someone to agree to be a co-signer, though. If you are unable to make your payments, then they will be on the hook for your debt, and your credit spending habits can also negatively affect their credit.
• Becoming an authorized user: When you become an authorized user, you can make purchases using someone else’s credit card. Even if you don’t make any purchases, you can start building your credit by leveraging someone else’s. Since the primary cardholder’s credit will also be affected, you should make every effort to be responsible with this line of credit.

If neither of those options sound appealing or are feasible to you, you can hold off until you’ve built some credit before applying for your own credit card.

Aside from the no credit history card options mentioned previously, you can consider other methods such as a credit builder loan. These are typically offered by credit unions and come in small loan amounts. Instead of receiving the loan proceeds right away, they will be held for you in a separate savings account until you pay the loan off. Your payment activity is reported to the three major credit bureaus, helping you to build your credit.

How To Apply For A Credit Card With No Credit

Before applying for a credit card, check to see what your credit history is like by checking your credit report with any of the three credit bureaus — Experian™, Equifax® and TransUnion®. That way you can find out if you have no credit.

Once you’re aware of your credit situation, consider using the following steps to get a credit card with no credit.

1. Do Your Research

Choosing the right credit card is important no matter what your credit score is. In addition to comparing the features such as APR and rewards, check to see what credit scores the credit card issuer is willing to work with. If a credit card is designed for borrowers with good credit, then you can cross it off your list.

In the future, you may be able to secure a more exclusive credit card. But for now, focus on building your credit history by managing your credit responsibly.

2. Apply To One Credit Card At A Time

Once you’ve decided on a couple of credit cards that might work for you, rank them in order. Apply to your top pick first. Hopefully, you’ll be approved!

You should wait until you hear back from one credit card issuer before applying for a second. Otherwise, your credit score could be negatively affected due to a higher number of credit inquiries.

The Bottom Line: You Can Start Building Credit With A Credit Card

While getting approved for a credit card with no credit does come with its challenges, it is possible. Once you get approved, be sure to use your card responsibly by paying off your balance in full and on time every month. Let your credit card help you establish a positive credit history and set yourself up for a healthy financial future.

If you are having trouble getting approved for a credit card with no credit, then it might be time to work on your credit score. A higher credit score can open doors to premium credit cards and higher credit limits. Download free tools like the Rocket Money℠ app to monitor your credit score and get guidance on improving your credit for the future.