Best Starter Credit Cards for No Credit

If you have no credit history, you've probably found that there are few credit cards you can qualify for. Starter credit cards are a type of credit card you can open with no credit. To help you get on the path to an excellent credit score, we'll cover what to look for in credit cards to build credit, how to open one, and how credit cards work.

Our experts analyzed several card offers to bring you a short list of our picks for the best starter credit cards. Check out our list below.

What to look for in a starter credit card

These are the features to look for in starter credit cards.

• No excessive fees. Beginner credit cards to build credit shouldn't be expensive, but some credit card companies charge all kinds of fees. Ideally, your starter card won't have any unavoidable annual or monthly fees. The card issuer also shouldn't charge you for standard services such as increasing your credit limit or paying your bill online.
• Reports payments to all three credit bureaus. The main consumer credit bureaus are Equifax, Experian, and TransUnion. Each one collects information for a credit report, used to calculate your credit score. That means we all have separate credit reports and scores with Equifax, Experian, and TransUnion. Since your credit score with each bureau is important, you need to build credit with all of them. For that, you need a credit card that reports your on-time payments to all three.
• Credit score monitoring. The best starter credit cards offer free credit score monitoring. With this service, you can review one of your credit scores monthly to see whether it's going up. Credit monitoring tools also usually provide tips on what you can do to increase your credit score.

What is a starter credit card?

A starter credit card is one that's available to people with limited or no credit history. This type of credit card is designed for those who are building credit for the first time.

There are a couple of common starter credit card types:

• Secured credit cards: A secured card requires a security deposit to open. The deposit is usually equal to the starting credit limit. Since the card issuer has a deposit, it can be more lenient about approving applicants with no credit history.
• Student credit cards: A student credit card is aimed at college students. Card issuers tend to be flexible about approvals for student cards, since young adults typically don't have much in their credit files.

Another way to get a starter credit card is with a card issuer that lets you link your bank account during the application process. Petal is one example of a credit card company with this option. Even if you have no credit, you can link your bank account when you apply for the card. The card issuer uses your payment history from your bank to evaluate your creditworthiness.

RELATED: How Do Credit Cards Work: A Beginner's Guide

Who needs a starter credit card?

You'll need a starter credit card if you don't have much or any information in your credit file. Since you don't have much borrowing history, card issuers likely won't approve you for anything except starter credit cards.

Here are some common examples of situations calling for a starter credit card:

• You're a young adult
• You haven't had a credit card or loan before
• You've avoided credit, and primarily paid for expenses with cash or a debit card
• You've immigrated to the United States
• You used to have credit accounts, but you haven't used them in years

If you wonder why it's important to get a starter credit card, there are a couple of good reasons. A credit card is a secure payment method, because it's not tied to your bank account and you can get a replacement card if yours is lost or stolen. When you use a credit card and follow good habits, such as paying on time, it can raise your credit score. This can help you qualify for better loan rates and credit cards with more benefits, including cash rewards or travel rewards.

Ready to get a card? See The Ascent's list of the best credit cards for young adults.

What do I need to open a starter credit card?

There are only a few requirements to open starter credit cards:

• You must be at least 18 years old
• You need a physical U.S. address (it can't be a P.O. Box)
• You need a Social Security number (SSN) or individual taxpayer identification number (ITIN)
• You need consistent income

Your income is what the card issuer looks at to confirm you can pay your credit card bill. It's also one of the main factors the card issuer uses to set an appropriate credit limit for you.

Keep in mind that your reported income can include more than just what you make from a job. If you're at least 21 years old, you can report any income you reasonably expect to access. Potential examples you could use when applying for credit cards to build credit include:

• A partner's income, if you've combined finances
• Distributions from a trust fund
• An allowance
• Scholarships and grants

If you're under 21, you can use income from work, allowances, scholarships, and grants.

To open a secured credit card, you need enough money to pay the security deposit. Most secured credit cards to build credit require a deposit of at least $200. However, there are some with smaller deposit requirements.

How can I get a credit card with no credit?

If it's your first time getting a credit card, here's how to open one with no credit.

1. Check out starter credit cards to build credit. Look for those that fit your situation. If you're in college, student credit cards are a popular choice. If you can afford a deposit, secured credit cards are worth a look.
2. Decide which of these credit cards to build credit you like most, and click the "Apply Now" option.
3. Fill out the application form.
4. Submit the application and wait for a response.

When you submit a credit card application, you may get an answer immediately. Sometimes, the card issuer needs more time to review your application. In that case, you'll get a response in the mail. You can also call the card issuer after a few days.

If your application is approved, you receive your new credit card in the mail within seven to 10 business days. If your application is denied, the card issuer will mail you a letter explaining why. You can call to ask that the decision get a second look. Card issuers sometimes reconsider denials.

Your other option is to shop around for other starter credit cards for no credit history. You may want to look at the easiest credit card to get if you're having trouble getting approved.

How can a credit card help me build credit fast?

A credit card can help you build credit fast if you follow a few credit habits:

• Pay by the due date so you have a perfect payment history.
• Stay below 20% to 30% of your credit limit for a low credit utilization ratio.
• Keep your credit card open to add to your length of credit history.

That's all it takes to get a good credit score. If you stick to those habits, your credit score should increase quickly.

To understand why these habits work, let's look at the factors that have the biggest impact on your credit score.

Payment history

Your credit score is basically a rating of how likely you are to repay debt. So it makes sense that nothing affects your credit score more than your payment history. If your credit report includes years of on-time payments, odds are that you'll have a very high credit score. Any late payments, on the other hand, can drop your score quite a bit, even into the bad credit range.

With a starter card, it's easy to build a good payment history. Pay on or before the due date and the card issuer reports that you paid on time to the credit bureaus. As your record of on-time payments grows, your credit score gets better and better.

Credit utilization ratio

Another big part of your credit score is your credit utilization ratio, or how much of your credit you use. You could also look at it as how close you are to maxing out your credit cards. The farther away from that you are, the better it is for your credit.

To calculate your credit utilization, divide your credit card balances (what you owe) by your credit limits (the maximum amount you can charge on your credit cards). For example, if you have one starter credit card with a limit of $1,000 and a $100 balance, then your current credit utilization is 10%.

Your credit utilization has a positive impact on your credit when you keep balances low. Very high balances, on the other hand, can lead to bad credit. A good rule of thumb is not going above 20% to 30% credit utilization. On a card with a $1,000 credit limit, that would mean not exceeding a balance of $200 to $300.

Length of credit history

Age is only a number, but the age of your credit accounts is a key factor in your credit score. Specifically, credit-scoring formulas look at how long you've used credit and the average age of your credit accounts.

The only thing you need to do here is to get a credit card and keep it open for the long haul. Once you have your first credit card, that starts the clock on your credit history. By keeping it open, you continue building a longer account age.

LEARN MORE: The Complete Guide to Understanding Your Credit Score

How to make the most of your starter credit card

Once you've found the best starter credit card for building credit, follow these tips to maximize its benefits.

• Stick to a budget. Don't spend more than you can afford. You don't want expensive credit card debt.
• Pay your bill on time -- and in full -- every month. By paying on time, you build your payment history and raise your credit score. And by paying in full, you avoid credit card interest charges. Use our interest rate calculator to see what the interest payment would be if you carry a balance.
• Never let your credit card balance exceed 30% of your credit limit. If your card has a $1,000 credit limit, never exceed a balance of $300. This keeps your credit utilization low and benefits your credit score.
• Check your credit score every month. Many credit cards provide a free credit score tool for cardholders. If yours doesn't, there are other free ways to get your credit score.
• Wait until you have a good credit score (670 or higher) before applying for any new credit cards. Credit card applications can drop your credit score by a small amount. It's better to focus on building credit and wait until you can qualify for the top credit cards to apply for a new one.

Your first-time credit card for no credit history is essential in starting your credit file. If you use it with an eye toward score improvement, you should see your credit score rise dramatically over time.

Want to know who the top credit card issuers are? See The Ascent's list of credit card companies.

RELATED: How Much Credit Card Debt Is Too Much?