Credit Cards for No Credit
Getting your first credit card can be exciting and frustrating at the same time. Since you most likely do not have credit history yet, many card issuers will turn your application down. Everyone talks about how important it is to build your credit history, but how can you do so when the creditors won't give you a chance? While there are other ways to build credit, using a credit card is the easiest and fastest way to establish credit.
There are many cards for people who have limited or no credit. There are the store cards, gas cards, or student cards. To make sure that you will get approved for the card that you have chosen, here are a few things that you must know first:
No Credit vs. Limited Credit
Cards that are meant for those with limited history and those who do not have credit are actually similar products. Those that approve people with limited history may also approve those who do not have credit history and vice versa. The only difference is that the cards for limited history will offer higher credit limit and, perhaps, a much lower APR than those without credit history yet. If you do not have credit and you applied for a card that requires limited history, you may still get approved. However, you may not get favorable rates and your credit limit may be low.
Income Matters
If you are below 21 years old, you should be able to prove that you have sufficient income to repay your balance. Having a job allows you to easily get approved for a credit card.
Pre-Qualify
Most of the major card issuers today offer pre-qualification processes online. These let you observe whether you can get a card from their available choices. The good thing about this procedure is that it will not hurt your credit score since this is simply a soft inquiry. If you apply for the cards presented to you, this will show up in your report and has the potential to hurt your score. Remember that being pre-qualified does not mean that you will really get the card.
Student Cards
Students understandably do not have huge income and may often not have credit history. Banks are aware of this, which is why they have created cards designed specifically for students. Make sure that you choose your student card carefully. Avoid those with annual fees and high interest rates even though they have attractive rewards.
Secured Card
A secured card often approves those who apply for one. This kind of credit card works like the traditional cards except that you need to make a deposit first to use the card. The deposit secures your account and your lender in case you default on your payments. The amount that you have deposited will also determine your credit limit. When selecting the card, make sure that you pick the one that reports to the credit bureaus and does not charge a lot of fees.
There are many cards for people who have limited or no credit. There are the store cards, gas cards, or student cards. To make sure that you will get approved for the card that you have chosen, here are a few things that you must know first:
No Credit vs. Limited Credit
Cards that are meant for those with limited history and those who do not have credit are actually similar products. Those that approve people with limited history may also approve those who do not have credit history and vice versa. The only difference is that the cards for limited history will offer higher credit limit and, perhaps, a much lower APR than those without credit history yet. If you do not have credit and you applied for a card that requires limited history, you may still get approved. However, you may not get favorable rates and your credit limit may be low.
Income Matters
If you are below 21 years old, you should be able to prove that you have sufficient income to repay your balance. Having a job allows you to easily get approved for a credit card.
Pre-Qualify
Most of the major card issuers today offer pre-qualification processes online. These let you observe whether you can get a card from their available choices. The good thing about this procedure is that it will not hurt your credit score since this is simply a soft inquiry. If you apply for the cards presented to you, this will show up in your report and has the potential to hurt your score. Remember that being pre-qualified does not mean that you will really get the card.
Student Cards
Students understandably do not have huge income and may often not have credit history. Banks are aware of this, which is why they have created cards designed specifically for students. Make sure that you choose your student card carefully. Avoid those with annual fees and high interest rates even though they have attractive rewards.
Secured Card
A secured card often approves those who apply for one. This kind of credit card works like the traditional cards except that you need to make a deposit first to use the card. The deposit secures your account and your lender in case you default on your payments. The amount that you have deposited will also determine your credit limit. When selecting the card, make sure that you pick the one that reports to the credit bureaus and does not charge a lot of fees.