If you don’t have a credit history, you might assume that it’ll be easy to get your first credit card. There are no missed payments in your history, you never filed bankruptcy or faced a foreclosure and you have zero credit card debt. But as nice as all this sounds, applying for a credit card with no credit history is a deal breaker for many lenders. They want to see some sort of credit history, and when applying for your first credit card, you’ll discover that many creditors aren’t so eager to extend financing. Not to say it’s impossible to obtain a credit card with no credit. However, you have to know where to look and you have to apply in the right places.
Department store or gas credit cards
If you’re looking for an easy approval credit card, apply for a department store or gas credit card. These credit cards are ideal starter cards because they’re available to people with no credit history. Make your payments on time, keep your balance to a minimum and you can build a strong credit score.
Secured credit cards
If your lack of credit history results in constant credit rejections, skip traditional credit cards and talk to your bank about a secured credit card. You don’t need a credit history or good credit. In fact, these cards are intended to help newbies establish credit and increase their credit scores. Approvals are super fast and easy, and as long as you provide a security deposit, you’re practically guaranteed a credit card account. Security deposits can be as low as $200 and as high as $5,000. Other fees can include an application fee, a processing fee and an annual fee.
Student credit cards
Attending a college or university creates additional options for credit cards, and you may be eligible for a student credit card. These credit cards can help you build credit at an early age. Options include the Discover Student Card, the Citi Forward Card for College Students and the Citi Dividend Platinum Select Card. These credit cards feature low initial credit limits, reasonable interest rates and the opportunity to earn cash back and other rewards.
Prepaid Credit Card
If you’re denied a department store or gas credit card, not eligible for a student credit card and you don’t have funds for a secured credit card, there is another option. Purchase a prepaid credit card and enjoy all the benefits of owning a credit card. Certain things in life may require a credit card, such as booking a hotel reservation, an airline flight or a car rental. With a prepaid credit card, you load a specific dollar amount onto your card and then use your card for purchases. There is no credit check, and if your card features a Visa or MasterCard logo, you can use your prepaid credit card wherever these cards are accepted. Since you can only spend what you load onto the card, there’s no risk of high debt or overdraft fees.
While getting a credit card with no credit history isn’t trivial, having one and using it responsibly can be an important step to building your credit history.