There is simply no getting around the fact that getting approved for a credit card is incredibly difficult when you do not have a credit history.
Many people, especially those that are living alone for the first time, do not have a credit score yet. The reason for this is simple: they have simply not had at least one active account (open for six months or more). Until you are able to do this, your credit score will remain blank and you will continue to have trouble finding a credit card.
Yes, the entire situation is a bit of a paradox. How can you build credit without a credit card? But you can’t get a credit card with no credit history?
Fortunately, there are more than a few ways that you can get a credit card with no credit history. Let’s look at a few of the most effective below.
One of the primary factors that creditors look at when examining a new application is the applicant’s employment history.
They want to make sure that you are currently employed in a secure, steady job. The reason for this is that they need to know you will be able to make your monthly payments on time. If you do not have sufficient income to repay your balance, chances are you won’t be approved. This especially holds true for those under the age of 21.
So if you need a credit card but don’t have the required credit history to be approved, get a job. It will help.
Credit Card Pre-Qualification
A number of the largest credit card issuers now provide online pre-qualification. This process lets you enter your information and see if they have a credit card available that fits your personal and financial profile.
One of the benefits of credit card pre-qualification is that it is a soft credit check. When you apply for a real credit card, it shows up on your credit report. Apply for too many at once and your credit history could be negatively affected. Soft inquiries don’t hurt your score and thus allow you to test the ice without getting a bruise. (Find out what else can harm your credit rating.)
If it looks like you might qualify for a credit card after your pre-qualification check, then you can easily follow through with the application process (note: this will show up on your report). Though it doesn’t guarantee approval, pre-qualification is a great way to check and see which options might be available for you.
Student Credit Cards
College students have a good chance of qualifying for a student credit card, even without prior credit history.
These college student credit cards are designed specifically for students that do not have a credit history or a large income.
Important note – Student credit cards can harm your future. They often come with hefty interest rates and lots of fees. Be careful during your selection.
Store Credit Card
Many retail stores offer store specific credit cards for people with no credit.
You are much more likely to be approved for a credit card from a retail store that does not have a Visa or MasterCard brand.
Important Note – Retail store credit cards often have low credit limits and very high interest rates. Select your card wisely and pay off your balance on time to avoid additional interest.
Secured Credit Card
Another option for those looking to get a credit card with no credit history is to sign up for a secured credit card.
Secured credit cards are different from normal credit cards because you make a security deposit on them. The amount of this security deposit then dictates your credit limit.
It’s important to note that, like student credit cards and retail store credit cards, secured credit cards come with a lot of fees. However, it is possible, with a little research, to find ones that keep the fees to a minimum. You can often find good secured credit cards from local credit unions.
Perhaps the easiest way to get a credit card without a credit history is by finding a co-signer.
A co-signer is someone that applies for a credit card with you. The creditor looks at their credit score and approves the both of you based off of that.
You are then required to make payments on that card. The biggest drawback is that if you don’t make your payments on time, the responsibility falls on the co-signer to make these payments. Furthermore, both of your credit scores are affected by these missed payments.
When looking for a credit card with no credit history, it is essential to keep these additional tips in mind:
Avoid applying for a lot of credit cards at once. As soon as you are turned down by one major provider, look for a store credit card or a secured credit card instead of applying for more. This will keep your credit rating in check and allow you to effectively build your credit.
Be wary of credit cards that guarantee approval. When a provider offers a credit card without first checking your credit score, you can be pretty certain there are huge fees or a high interest rate lurking somewhere close behind.
Prepaid cards and debit cards are two alternatives to credit cards. Though they do not let you build your credit history, they can be used in most credit card-like transactions.
Get a Credit Card With No Credit History
Yes, it is a bit of a paradox, but that’s just how things go. It is incredibly hard to get a credit card without a solid credit history yet it is hard to build your credit history without a credit card.
Fortunately, there are a few options that can help you get on your feet. The best of these were discussed in detail above.