When applying for a credit card, you may find yourself in a conundrum. You need credit history to get a credit card, but you can’t build credit history without access to a line of credit.
It may be frustrating, but there are ways for people with no credit history to get around this. And, yes, there are banks and credit card issuers that will work with you.
Getting a Credit Card With No Credit History
First things first. If you’re applying for unsecured credit cards, you may have to look around for more flexible lenders. You should also be prepared to pay higher interest rates and fees. Credit card issuers utilize these increased rates and fees as security against new credit users.
Once you build credit and prove yourself reliable, you may be able to adjust rates or find a credit card company with better fees, rates, and benefits altogether.
In the meanwhile, you have to start building credit history to gain access to that credit. Here’s how you can get an unsecured card with no credit history.
Check to See if You Prequalify
Cut to the chase and see whether you qualify for lines of credit at major credit card companies by heading online. Many credit card companies will offer free checks to see whether you prequalify.
Unlike traditional credit checks, which can affect your credit score, these “soft checks” won’t appear on any of your credit reports. Make sure it’s a soft check before you fill out any information online. You want to avoid putting any extra risk to your future applications with a negative credit check tacked on to your credit report.
Get a Cosigner
A straightforward way to cut to get a credit card with no credit is to use a cosigner. Cosigners essentially take on the responsibility of paying back your debt if you fail to do so.
Cosigners with a strong credit history can help you gain access to unsecured credit cards. However, you need to be cautious and weigh your options carefully. You’re entering a financial agreement with a credit card company as well as with your cosigner.
If you’re nervous you won’t be able to make your payments on time, keep in mind that your late payments will affect your cosigner’s credit history, too. If you default on a loan, both you and the cosigner will be held responsible.
What to Consider Before Using a Cosigner
Depending on the arrangement you come to, your cosigner may also have access to checking your purchase history, which can be uncomfortable to some. Here are a few things to consider before using a cosigner:
- Your relationship with the cosigner. Will they regularly check in on your finances or give you the freedom to use the card on your own terms?
- Your ability to pay back in full. Your credit is their credit once they sign off a loan. Don’t put others’ credit history at risk unless you’re positive you can handle monthly payments.
On the other hand, teaming up with a cosigner be a great option if you are committed to using an unsecured card for small, manageable purchases. Just be sure to have a talk with your cosigner to lay out the financial and personal terms of the agreement before you head into this kind of relationship.
Evaluate your employment situation realistically. If you’re employed part-time, it may be more difficult for you to gain access to unsecured cards. You’ll have to list your income during the application process.
You won’t be able to include the income of household members, including spouses or parents. This will affect your chances of getting a credit card, particularly if you’re under age 21.
If you’re applying for a small credit line and can demonstrate to lenders that you can make your monthly payments on time, you’ll have an advantage over other applicants.
Apply for a Store Credit Card
Retail outlets can be a good place to start when applying for unsecured credit cards. These stores often use more lax credit checks to get you started with a store credit card. Do your research when applying for one of these cards.
Don’t just take the first offer you come across during check out at your favorite shop. These credit cards tend to have high interest rates attached, which means your monthly bill can add up quickly if you don’t pay on time.
In fact, you may want to sign up for a store credit card at a shop you don’t frequent. It’s far more tempting to whip out a credit card when you’re at a store you go to every week. Instead, make small purchases regularly at an outlet where you’re not tempted to make impulse buys when there’s a sale on.
Pay off these small purchases regularly and in full, each month. This positive payment history will be reported to the three credit bureaus (Equifax, Experian, and TransUnion) and will help you improve your credit score.
Starter Credit Cards
Many banks and credit unions offer starter credit cards. They come with small credit limits of $200 to $500. These credit cards offer a way to help you enter the world of credit spending and building without taking on major risks.
It’s ideal to pay off all debt each month before interest rates rack up. However, if you find yourself in a tight financial spot, it’s far better to have your credit reined in. A starter credit card can help you manage your spending, learning not to rely too heavily on a credit card.
Remember, getting out of major credit card debt can take years of dedicated work. Don’t start off your credit history with major debt. Take that $200 or $500 credit limit and make small purchases. Then, pay them off on time, and you’ll soon see your credit scores rise over time.
Secured Credit Cards
If you’ve exhausted all of your options and still cannot get unsecured credit cards, you may need to start with a secured credit card. These credit cards require a refundable security deposit, which is usually returned after 12 months.
Secured cards are not ideal. However, by making timely payments over 6-12 months, you can upgrade your secured credit card to an unsecured credit card with a higher credit limit.
Before signing up for a secured credit card, make sure the credit card issuer reports your on-time payments to all three major credit bureaus.
See also: How to Build Credit With a Secured Credit Card
Top 4 Secured Credit Cards
1. Chime Secured Credit Builder Visa® Credit Card
Chime Secured Credit Builder Visa® Credit Card is perhaps one of the best secured credit cards7 on the market. With no credit check, no annual fees, no interest, and no minimum requirement for a security deposit, it simply can’t be beaten.
APR: No interest
Intro APR: No interest
Annual Fee: $0
Security Deposit: No minimum requirement
2. OpenSky Secured Credit Visa Card
APR: 18.89% variable APR
Intro APR: None
Annual Fee: $35
Security Deposit: $200
One of the biggest benefits of the OpenSky Secured Credit Visa Card is that there’s no credit check required to open the account. Instead, you’ll apply and make a one-time refundable deposit of $200.
This makes the OpenSky secured card a great option for individuals with poor credit or limited credit history. And you’ll receive resources and information on building credit on the company’s website.
3. Discover it Secured Credit Card
APR: 24.49% variable purchase APR
Intro APR: Balance transfer APR of 10.99% for six months
Annual Fee: $0
Security Deposit: $200
Another secured credit card that is highly recommended is the Discover it Secured card. There is no annual fee. You also have the option to upgrade to an unsecured card if you pay on time and use the card responsibly.
Plus, the Discover it Secured card is one of the few secured cards that offer cash back rewards. You can earn 2% back on the first $1,000 you spend at gas stations and restaurants per quarter. And you can earn unlimited 1% back on everything else.
4. Capital One Platinum Secured Credit Card
APR: 26.99% variable APR
Intro APR: None
Annual Fee: 0%
Security Deposit: $49, $99, or $200
The Platinum Secured Credit Card from Capital One is a viable option for borrowers that are just starting to build credit. There’s no fee to get started and you’ll pay a refundable deposit of either $49, $99, or $200.
And the best part is, you have the option to receive a higher credit line after five months of on-time payments. You can manage your account online or through the bank’s mobile app.
Student Credit Cards
Student credit cards are a type of credit card specifically designed for college students who may not have a long credit history or a high income. These cards are often easier to qualify for than traditional credit cards.
They typically come with features and benefits that are tailored to the needs and financial situations of students. Some student credit cards offer low interest rates and flexible repayment options. Some even have rewards programs that allow students to earn points, cash back, or other benefits for making purchases with their card.
Additionally, you may be able to find a student credit card that offers free credit scores, financial education resources, and other benefits. It’s imperative for students to be mindful of the terms and conditions of any credit card they are considering. In addition, they should understand the potential risks and benefits of using credit.
Apply for a Credit-Builder Loan
If you’re worried you won’t pass a credit check for a credit card, consider applying for a credit-builder loan. Your local bank or credit union may have them, but it’s also easy to apply for one online.
These are beginner loans designed to build your credit score from scratch. If you work with a bank or credit union, you may need to open a checking account to gain access to this line of credit.
Be specific about wanting to open a small loan. Now isn’t the time to test your resolve to pay back several thousand dollars before opening a credit card. Once you’ve been approved for a credit-builder loan, focus on paying back the sum quickly and in full.
As your payments get reported to the three major credit bureaus, it will have a significant positive effect on your credit score. This will increase your chances of being approved for unsecured cards down the line.
See also: 8 Ways to Build Credit Without a Credit Card
How do I get a credit card with no credit?
If you have no credit history, there are several steps you can take to get a credit card:
- Research your options: There are several types of credit cards for people with no credit, including secured credit cards, credit builder loans, student credit cards, and authorized user cards. Each type of card has its own features and benefits, as well as potential drawbacks. It’s important to research and compare different credit cards to find one that best fits your needs.
- Check your credit score: If you don’t have a credit history, you may not have a credit score. However, if you have a limited credit history, you may have a credit score. Knowing your credit score can help you understand your creditworthiness and what types of credit cards you may be able to qualify for.
- Gather the required documents: To apply for a credit card, you’ll need to provide some personal and financial information, such as your name, address, Social Security number, and employment information. You’ll also need to provide your income and any outstanding debt you may have.
- Choose a credit card: Once you’ve researched your options and gathered the required documents, you can choose a card that fits your needs and financial situation. Be sure to carefully read the terms and conditions of any credit card you are considering and understand the potential risks and benefits of using credit.
- Apply for the credit card: You can typically apply online, over the phone, or in person. The application process will usually involve filling out an application form and providing the required documents.
- Wait for a decision: After you submit your application, the credit card issuer will review your information and make a decision on whether to approve your application. If your application is approved, you’ll receive a card in the mail along with instructions on how to activate it and start using it. If your application is denied, you may be able to find out the reason for the denial and take steps to improve your creditworthiness in the future.
It’s important to use your credit card responsibly once you get it, by making timely payments and keeping your credit utilization low (i.e., using a small portion of your available credit). This will help you build a positive credit history and improve your credit score over time.
Use Your Credit Card Regularly
Build credit history by utilizing that line of credit each month. Consider putting regular, small purchases such as groceries or gas on your credit card or other purchases that have already been built into your monthly budget.
Use Credit Responsibly
It’s essential to use your credit card responsibly once you get it, by making timely payments and keeping your credit utilization low (i.e., using a small portion of your available credit). This will help you build a positive credit history and improve your credit score over time.
No major purchases unless you’re sure you can pay them off on time. That means considering the risks before you put that next vacation on your credit card. You also need to pay your bills on time, learn strong habits and, ideally, pay off your credit card in full each month.
Frequently Asked Questions
What is a “credit card for no credit”?
Credit cards for no credit are credit cards that are specifically designed for people who have no credit or limited credit history. These cards may be easier to qualify for than traditional credit cards and can help you establish a credit history and improve your credit score over time.
Is no credit better than bad credit?
Yes, no credit is better than bad credit when it comes to your credit score and creditworthiness.
If you have no credit, it means you don’t have a credit history, so there isn’t any information for a lender to consider when evaluating your creditworthiness. While this can make it harder to qualify for a credit card or loan, it’s better than having a bad credit score.
How can I get a credit card with no credit and no income?
With no credit and no income, it may be challenging to qualify for a credit card. Many credit card issuers require applicants to have a certain level of income to qualify for a credit card, as income is typically used as an indicator of your ability to repay your debts.
Your best option is to become an authorized user on a family member or friend’s credit card account. You could also get one of the cards discussed above, but it will be difficult to make payments on them if you don’t have an income.
Can I get a Chase credit card with no credit?
With no credit history, you may have a harder time qualifying for a traditional Chase credit card. However, Chase does offer two cards that may be more accessible to people with no credit or limited credit histories. These include the Chase Freedom Student credit card and the Chase Secured credit card.
The Chase Freedom Student credit card is specifically designed for college students who may not have a long credit history or a high income. It offers cash back rewards on everyday purchases, and there is no annual fee. To qualify, you must be a college student with a valid student ID.
The Chase Secured credit card is a secured card that requires a security deposit, which acts as collateral in case you default on your payments. Your credit limit will typically be equal to your deposit amount. The Chase Secured card offers cash back rewards on everyday purchases, and there is no annual fee.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
7. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or beneﬁts payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, veriﬁcation or trial deposits from ﬁnancial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.