Find a steady source of income
How do you get a credit card with no credit, when it’s is the first thing a credit company will want to see when you apply for a new card. Your credit score is the best predictor of whether or not you will meet your credit obligations. But it’s not the only one. When your credit history is not available, your income is the next best thing. In fact, even when you do have a credit score, your income still has a significant influence over whether your application will get approved and on what terms. So, if you’re struggling to get approved for a credit card, the best thing to do is to get a steady source of income, wait a couple months, and then apply again.
Build credit through a temporary card
It’s only natural that credit card companies are cautious towards clients with no credit history. They want to get to know you a little better before giving you access to credit. So, what you are likely to get at first is a card with limited features. It could be a student card with a low credit limit. It could be a secured card that requires a deposit. Or it could be a shared card, where someone else is responsible for your debt if you fail to pay. Use these products responsibly, and, after a while, you might be upgraded to a full-fledged credit card.
Get a student credit card
Perhaps the most common time to enter the world of credit is in college. To acknowledge that, most credit card companies have designed some kind of a student credit card. Those card tend to have very few application requirements. All you have to do is prove that you are a student and you should get approved even with no (or a limited) credit history.
All you have to do is prove that you are a student and you should be able to get approved even with no (or a limited) credit history.
Even though student credit cards are simplistic, many of them do offer some kind of rewards. Cash back is common, but sign-up bonuses and spending bonuses are not off the table either. Better cards even go as far as include small, but fun, student-specific perks. Discover it® Student Credit Card, for example, adds an extra $20 to your account if your GPA is above 3.0 at the end of the year. Overall, student cards are a great deal, since no other type of card is likely to offer similar terms to someone with no credit history.
Apply for a secured credit card
For anyone looking to build or repair credit, a secured credit card is the go-to option. What makes it so accessible is that the bank doesn’t have to trust you at all. Instead, you submit a deposit, which works as collateral. You are then issued a card with a credit limit the same size as your deposit. If you fail to pay your debt to the bank, it uses your deposit to recover its losses. Whatever you do with that card, you can’t do any damage to the bank. That’s why the bank is not afraid to give those cards out to virtually anyone.
Although secured cards are not very exciting, some of them are pretty good cards for that level of credit. Features to pay attention to are the cost of ownership (including the deposit requirements, the annual fee, the interest rate, and any additional fees), the graduation option, and whether the card offers any rewards. Discover it® Secured Card is the card that ticks most of those boxes. It’s also one of the very few secured cards that offers rewards to its users. Our other suggestions include Capital One® Secured Mastercard®, which has the lowest deposit requirements, and OpenSky® Secured Visa® Credit Card, which performs no credit checks and is easy to get approved for, even with bad credit.
Get a shared credit card
You can compensate the lack of credit by sharing a card with someone who has good credit history. It’s not very convenient and it requires a certain level of trust between you and the other person. Still, it’s an easy way to get started on your credit.
There are two ways to share a card. One is to become an authorized user on someone’s card. And two is to apply for a co-signed card.
The difference is that an authorized user is not accountable for any debt on the card, while on a co-signed card, both users are equally accountable. The other difference is that it could be challenging to get an authorized user reported to the credit bureau. Although relatives and people sharing the same address have a good chance. All things considered though, a co-signed card is probably the better option.
Apply for a retail or a gas credit card
Both retail chains and gas station chains tend to have branded credit cards. They are not much risk to the companies, since the credit limit on those cards is usually low. It means that application requirements are not very high either. Hence people with no credit have a better chance of getting one of those cards. Another good thing about retail and gas cards is that they come with chain-specific rewards. Those rewards are mostly discounts and cash back, which are as much as you could hope for a low-requirement card.
The bottom line
Having no credit history is not really a challenge when it comes to getting a credit card. Granted, you won’t get the best of cards at first, but it’s really a short-term delay. All you have to do is get at least some kind of credit card. You can get a better one once you prove you can handle credit. Among the most accessible cards are student cards, secured cards, retail and gas cards, and joint cards. Try a student card if you are a student, but any of the other types will work just fine. Although a secured card would probably be our top pick.