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Building credit with a credit card can seem like an uphill battle when you aren't sure where to start. After all, you need to show lenders that you are responsible with the money you borrow in order to get access to credit, but not very many lenders will take a chance on you without a credit score and a track record of on-time payments and responsible use. Talk about a frustrating issue to deal with.
While most credit card issuers will turn away borrowers who have no credit history, the good news is that having no credit score doesn't automatically mean that you can't get a credit card. There are certain types of credit card products that are geared toward borrowers who have limited credit histories or no credit history at all. These credit card products function similarly to normal credit cards and are typically the first step to building a solid credit history that lenders can trust. Here's how to get a credit card with no credit.
When you have no credit history, you have nothing on your credit report to show that you've had access to credit at all -- which means that lenders can't tell whether or not you're creditworthy because they have no information to rely on for that decision. You don't have a low score -- you have no score at all. So, you're essentially starting from scratch to build credit from the ground up.
Having no credit score is much different than having a bad credit score when it comes to borrowing money. A bad or low credit score shows lenders that you've misused credit products in the past and therefore may not be responsible with the money they lend you. That can get in the way of opening credit card accounts because lenders will have to worry that you will default on your account or make late payments -- or exhibit other less-than-ideal credit behavior.
While having no credit history can make obtaining a credit card more difficult, it's a little more ideal of a situation than overcoming a bad credit history. The main goal when starting from scratch on your credit is to obtain a credit card and prove to lenders that you can use the money you borrow responsibly. If you make purchases, pay your bill on time, and avoid maxing the card limit out, you'll be on your way to building a solid credit history with no blemishes.
That said, securing a credit card that builds credit can sometimes be easier said than done. If you have no credit score, prime lenders aren't going to approve you for the best credit cards on the market. You'll have to start with credit products that are unique to your situation -- and they may not come with the same types of perks you'd get from a top-tier credit card.
However, these credit cards will help you to build credit, so it's certainly worth the time and energy spent to obtain one. Here are some of the card options you may have.
If you have no credit score, you need to target the right types of credit cards. Otherwise, you'll likely be in for a denial on your application. The options you have for getting a credit card with no credit include:
Secured credit cards are one of the best credit card options when you're trying to build credit because they are geared toward people who have no credit score. These cards work like just regular credit cards -- you borrow money from a lender, swipe to make purchases, and then pay the money back either in full or with interest over time.
The main difference is that you have to put down a security deposit to obtain a secured credit card. The amount you put down for your security deposit is typically up to you and will nearly always be the equivalent of your credit limit. For example, if you put down a $1,000 deposit on a secured credit card, you will typically have a $1,000 credit limit.
And just as you would with a regular credit card, you will receive a bill each month for what you spent the prior billing cycle on your secured credit card. You don't use your security deposit to pay the bill, though. You pay that money back to the lender each month by one of the methods offered by the lender. With a secured card, your security deposit is held by the lender in case you default. It's not a replacement for your monthly payments.
The lender does not keep your security deposit forever, though. In nearly all cases, the secured credit card deposit you make is refundable after a certain period of time -- or when you close your card -- as long as your account is in good standing. If you default on the payments, the credit card issuer keeps your deposit.
Many of the major card issuers will offer these types of secured cards to customers who don't qualify for a typical credit card. Some will require credit checks and others won't, but the application process is the same as it otherwise would be. You apply, get approved, and your card is opened after you make your security deposit to the lender. These cards also report to the credit bureaus each month -- just like a regular credit card would.
Some lenders will also offer starter cards, or unsecured cards with lower limits and higher interest rates, to borrowers with no credit scores. The options for starter cards are typically limited to certain types of student credit cards or other similar card options, but if you do some research, you may be able to find a lender who offers this type of card with no security deposit.
Another option you have for getting a credit card with no credit is becoming an authorized user on someone else's credit card account. You don't need any credit to become an authorized user, but you will need to ask a friend or family member who has good credit and access to credit products to add you to their account. If they agree to do this, you will get a credit card that is linked to their account -- and it can be used just like any other credit card would be.
The big difference between an authorized user account and your own credit card account is that you aren't relying on your own credit picture to obtain a credit card. You're using the other person's on-time payments and responsible credit card history to be added to a credit card account instead.
Doing this will help you build your credit score, and it will also typically give you access to better credit products than you would otherwise have with no credit score. The main downside to this option is that it can be tricky to get someone else to agree to add you to their credit card account, as they -- not you -- will be legally responsible for the charges you make.
That said, it's important to understand the agreement between you and the main account holder if you take this route. Authorized user accounts can get sticky very quickly if there isn't a repayment plan in place with the other party, so make sure the details are ironed out before you are added to the account or use the card.
Store credit cards, or cards that are limited to use in a particular retail store, may also be available to you without a credit score. Many people use these cards to build credit as a pathway to other types of credit cards.
Unlike secured cards, though, you won't need to put up a security deposit on a store card in most cases. These cards are nearly always unsecured, meaning the lender gives you a credit card limit based on your credit score and financial picture -- not based on your security deposit.
That said, the limits on these cards are typically a lot lower than you would get with a regular credit card -- and they're also limited in their scope. You can only use them at the stores the cards are associated with, and the interest rates tend to be a bit higher than they otherwise would.
You typically apply for these cards the same way you would any other credit card. You'll need to provide the lender with your information, either in-store or online, and the issuer will make a decision based on the information you provide.
Getting a credit card with no credit doesn't have to feel impossible. There are ways to obtain credit cards without a credit score -- but you'll have to do some research to decide which route is best for you. And with responsible use, your new credit card will help you build a solid credit foundation that gives you access to the types of credit products you want or need in the future -- which is worth any hassle you may encounter while applying for credit cards with no credit.
Bonus Read: See our list of credit card companies to continue your research
Yes, you can get a credit card with no credit and no cosigner. A secured credit card is a great option for new cardholders with no credit, as these cards are geared toward those with bad credit or without credit scores. As such, these cards typically do not have a minimum credit requirement and do not require a cosigner. And you will still be able to build credit with a secured card -- you will just need to put down a refundable deposit on the card before your account is open.
Yes, you can get a credit card with no spending limit. There are certain types of charge cards, like the American Express charge card lines, that have no preset spending limits. That said, you will still have a limit on the card -- which is based on your spending habits and other factors -- but there won't be a firm card limit stated on your credit report or listed in your account. And because these cards are charge cards, they generally have to be paid in full each month.
No, you do not have to have a checking account to get a credit card. Credit card companies do not typically check to see whether you have a bank account or checking account. Credit card issuers will focus on your credit score, your current income and employment, and other credit-related factors to determine whether you should be approved for a credit card.
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