People who don’t have a credit history can still get a credit card. Everyone starts off at some point without a credit history, and there are options available for people who would like to get a credit card. They can start to build their credit history by applying for a secured credit card or applying for a joint credit card with someone who has an established credit history. The third option available to someone who has no credit history is to find a credit card issuer catering to first-time customers and offer student credit cards or bad credit credit cards or just plain and simple credit cards that are able to be approved for with little or no credit history.
Secured Credit Cards
With a secured credit card, the card holder puts up a deposit that is equal to the credit limit they have requested. This type of card is available for people who want a limit as low as $500. Once the application and the deposit have been received, the credit card is issued.
Be sure to look at the terms and conditions that the credit card company is offering before applying for a secured credit card. The company may charge a monthly fee, whether there is any activity on the credit card account or not. There may be service charges levied for each transaction as well.
The deposit money is held in an interest-bearing account. If the secured credit card customer doesn’t make his or her payments, the money in the account is used to repay the debt. After the cardholder has established a history over several months of paying his or her bills on time, he or she can apply for an unsecured credit card. The deposit, plus any interest accrued, will be released to the cardholder when the account is closed.
Joint Credit Card Accounts
Another way for a person with no credit history to establish credit is to apply for a joint credit card. Each person on the credit card account is responsible for any purchases made on it. Before choosing this option, the prospective cardholder should consider the other person’s financial habits.
If the goal is to establish a good credit rating, then entering into a joint credit card account with someone who spends lavishly and has trouble paying when the bill comes in is not a good idea. The other person on the joint credit card account should be someone who is trustworthy and who will be responsible about the privilege of having the card.
No Credit History Credit Card Offers
Some credit card companies have cards designed for people who don’t have a credit history. An example is a company with card products catering to students. A person who is still in school and looking to establish credit may want to look at this option.
A person may qualify for a student credit card without having an income. Some cards have no annual fee, while others offer a lower APR (Annual Percentage Rate) in return for the cardholder paying an annual fee. The person who is interested in this type of credit card should make sure they understand how much they will be charged for interest on purchases, cash advances and balance transfers.
Working adults who have finished school and want to establish credit may want to start off by getting a credit card from a retailer or a gas company. This type of credit card product is relatively easy to get and by making payments on time, the cardholder can establish a credit rating.
One disadvantage to this type of card is that the interest rates charged may be higher than with other credit card products. A person who chooses to apply for this type of card should try to avoid carrying a balance, if possible. This type of credit card may not entitle the cardholder to cash advances; the card may be used to purchase merchandise only.
A person who doesn’t have a credit history can still qualify for a credit card. Their options may be more limited than a person who has a well-established credit history. As the cardholder makes his or her payments on time, he or she will eventually be able to qualify for an unsecured credit card.
With all the options available, it can be confusing to find the right card. The free credit card Chaser tool on our home page can help to narrow down the various offers available from different companies. It’s very easy to use; all you need to do is click on it to get started right away finding the best credit card today!
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