Credit Cards
October 8, 2020

Credit Cards for People with No Credit

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Simple. Thrifty. Living.

Sometimes it can be difficult to get approved for your first credit card when you don’t have any credit. But there are a few types of credit cards for people with no credit. That is, if you know where to look. Think of them as starter credit cards. They’ll provide you with the benefits of having a credit card while also enabling you to build a credit history. Then, eventually apply for better credit cards.

But before you apply for any no credit credit cards, there are a few things you should know. There are different types of starter credit cards, read on to find out more.

Starter credit cards are available for people who have no credit or a very limited credit history. There are three types to choose from:

Secured Credit Cards

A secured credit card is the same as a regular credit card.  You can use it to charge purchases in the same manner, but there is one key difference. To get a secured credit card, you must first pay a security deposit that is usually equal to the credit limit of the card.

You must first pay a deposit, typically the deposit is between $200-300  The deposit is usually returned when you close your account, and the card allows you to build a credit history, which is important for acquiring regular credit cards in the future.

Secured credit cards often charge an annual fee, and don’t typically offer any rewards such as airline miles or cash back.

Student Credit Cards

College students often don’t have a credit history yet, but they can apply for student credit cards. These credit cards for no credit don’t require a security deposit and many of them also offer rewards, but they also typically come with high interest rates and fees.

Unsecured Credit Cards

These no credit credit cards can also be acquired without a security deposit, but usually have much higher interest rates and additional fees. However, so long as you pay off the balance in full each month, you can avoid paying the high interest.

Even with no credit credit cards, the credit card issuers still want some assurance that you’ll be able to pay the card balance, and that means you will need to show that you have income. Some cards require you to have a minimum income, and you cannot use the income of your parents or a spouse.

Student credit cards are an exception — you don’t need to show income, but you must show proof that you are currently enrolled in a college or university.

Don’t Qualify? Try These Tricks

If you aren’t able to qualify for any of the starter credit cards on your own, you can have someone else with a good credit history co-sign with you. The co-signer will of course need some assurance that you will pay your bill on time each month, because any financial irresponsibility on your part will negatively affect their credit as well.

You can also try signing up for some store cards. These are usually easier to get, and even though you can only use them at a particular store, they still allow you to build a credit history.

Building a good credit history will help you with several things throughout your life, so getting a starter credit card is recommended. Many organizations, utility companies, and financial institutions that handle loans such as mortgages or car loans will check your credit score. Having a good credit history and credit score will help with:

  • Renting an apartment or home
  • Signing up for utilities
  • Signing up for mobile phone services
  • Getting a car loan
  • Getting a mortgage

Some jobs will even run a credit check to see if you are financially responsible. A good credit score also grants you more favorable rates with other credit cards or loans, and can reduce or eliminate the deposits you’ll pay on utility accounts or auto and home insurance.

The sooner you start building your credit history, the more financially viable you’ll be in the future. Ready to sign up for your first card? Here are a few of our favorite reward credit cards.


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