Credit history plays a huge role in applying for a credit card. This is the credit card company’s way to check how credible you are when it comes to making payments on time.

It is easy to get a credit card when you have a good credit score. But can you get it with no credit? Read on to find out.

Can You Get a Credit Card With No Credit?

The short answer is yes. It is possible to get a credit card with no credit. Although credit history plays an important role in getting a credit card (as well as other things including determining the credit limit you are eligible for) - not having a credit history isn’t a deal-breaker.

There are card issuers that give high importance to the credit history of the card applicant. When they have a limited credit history to check, the credit card issuer may be hesitant. You can get approved with a credit card but with limited options. There is no need to fret as there are many ways to establish your credit and increase your credit score so they can lift the limitations on your credit card.

Once you have built your credit and maintained it in good scores, getting a regular credit card can be easier than you think.

What Does it Mean to Have No Credit?

Having no credit means you have never opened a credit account. This includes having no credit cards and loans. This is a record reported to major credit bureaus. It is where the credit card issuers check on the payment credibility of an applicant.

You may think that having zero credit is good for your finances since you do not have any debts to pay. However, it can also come out disadvantageous since there are deals and offers that you cannot get hold of. One of these is getting approval for a credit card application.

Having zero records of credit can give you limited options when applying for a credit card. It is fine to have credit records, especially if you pay promptly and keep debts at the smallest.

Preparing for Your First Credit Card

To have a credit record, you need to open your first credit account. Since you do not have any credits history, you have to prepare for your first credit card. Preparation means you have to research for your best option. There are a lot of credit cards that you can choose from. You have to select the one that will work well with your income and spending habits.

Look at the income requirements

Your income will not show in your credit reports. This is why credit card companies still ask for proof of income from applicants.

Before you apply for a credit card, make sure that your income will fit into their income requirements. This is to avoid rejections. You need to prove that your income is enough to pay for your credit card bills. It is best to include all your sources of income in your application.

Consider the annual percentage rate

The annual percentage rate is the amount that you will pay for using your credit card as a yearly interest rate. It is essential to check on the annual percentage rate that a credit card company has set. Having a high APR will mean paying a lot for the interest rate monthly.

Most credit companies offer a low-interest rate for their customers who pay their debt regularly. However, if you fail to pay your debt regularly, they will raise your interest rate and make it more difficult for you to manage your debt. So be sure that you will be able to pay your debt in time. Choose credit cards that offer lower APRs so payment will not come out as a problem for you.

Do not ignore credit card fees

Before you sign up for that credit card application form, make sure that you know all the fees that the credit card will impose. There are a lot of credit card fees that you will shoulder once you start using the card. You will encounter annual fees, interest charges, late payment fees, cash advance fees, and many more.

Know and understand more about each fee included in the use of the credit card. This way, you will make it a habit to use your card wisely. These fees are unavoidable. As you keep using your card, you will incur different fees to pay.

Make sure that you check on all the fees attached to the credit card you are applying for. Your knowledge and understanding of the fees will help you avoid some of them. For example, if you make payments on time, then you can avoid having late payment fees.

Check credit limit

Credit cards have credit limits. This is what you should always remind yourself of. Always ask the card issuer about the credit limit so you can monitor your credit every time you use your card.

Before you keep using your card, make sure that you check on what the credit limit is. As much as possible, do not go near the limit as there will be interests added to your existing credit. It would be great if you will not go overboard when buying things.

Do not let your spending habits develop like a habit. After all, you should not always rely on your finances to pay off debts. You should also learn how to manage your money and to spend properly.

Getting prequalified

When you have submitted all the needed documents for your credit card application, the card issuer will inform you if you get prequalified. Getting prequalified offers means that you have met their initial conditions for approval. Though it is still not a guarantee of approval, you have better odds when offering you prequalified deals.

Applying for a credit card can be intimidating when you have zero credit history to show. Yet, if you are confident with the documents and information you submit, your no-credit records should not be a problem for approval.

Credit Cards You Can Apply for With No Credit

There are credit cards that you can apply for easily when you have no credit history. These starter credit cards can also help you build your credit history.

Student credit cards

A lot of credit card companies offer credit cards that are suitable to students with minimal to zero credit history. This type of credit card has limited credit limits. It also has small incentives as compared to regular credit cards.

This is to maintain responsible usage of the card. Students who want to establish their credit scores early can apply for student credit cards. A student needs to be above 21 years old to apply for this card.

Store credit cards

Establishments and retailers offer store credit cards to customers to make a purchase but are paid overtime. Retailers partner up with credit card companies and banks so they can offer this type of credit card to clients.

People with no credit can easily apply for this credit card since their credit history is not a big issue. It is also a good way to build their credit history so they can apply for regular credit cards in the future.

This is among the many credit card offers you can get, especially if you are a loyal customer of a retail shop or establishment. Banks can also offer store credit cards to their clients. If they offer you this type of card, grab it right away as it can give a credit record.

Secured credit cards

A secured credit card is a credit card supported by a cash deposit. The funds that the card has served as collateral. It is a way to assure the credit card company that there will be funds available in case the cardholder is not able to make payments on time.

This is the most common credit card given to people with limited or zero credit history. It can help in improving credit scores. Make sure that you put in a good amount of funds in your account. This way, you can keep using the card without any hassles.

Other options for establishing credit

Aside from getting credit cards, there are several ways to establish credit. You can opt to open a savings or checking account. Creating connections with banks will help you get closer to getting a credit card. The savings or checking account can help you prove your ability to make payments for your credit card bills if you get approved.

You have to make sure that your account has good amounts deposited. Maintain funds in your account. If possible, keep depositing money in it. This will help you build your financial credibility.

You may also consider getting a co-signer. They will serve as your co-applicant, whether it is for a loan or credit card. This is a common practice where one will be sharing their credit card with another person who has good credit.

However, you should understand that with the account shared with another person, the credit history obtained will reflect on both of your credit reports. Keep in mind that if the primary cardholder is unable to pay off the loan, they can ask their co-signer to make the payment.

Recommendation

Applying for a credit card is easy. Yet, it is quite challenging to get it approved when you have little to zero credit. It is best to establish credit first.

Choose starter credit cards that you can manage well. Do not dive into getting all those starter credit cards and end up in a financial problem because of failed payments. Manage your finances well.

Getting lots of starter cards will not guarantee that you will get a regular credit card approved right away. It is still about having a good financial account and a steady source of income.

Conclusion

Your credit history should not stop you from your goal of getting a credit card. Besides, credit cards can help you build a credit history. You can use this for other financial terms and deals.

If you are not granted to have regular credit cards, you can settle for starter credit cards. These are all accepted to establish a credit history. You can also opt for other credit building methods, such as having a savings or checking account.

Keeping your financial records in good status can also help you prove your financial credibility. Keep in mind that you have to take things step-by-step. Since you have zero credit, you will have to start from the initial step, and that is to establish your credit. This will make it easy for you to get your credit card application approved in no time.

Credit cards can help you and your financial situation, so make sure to look into getting one as soon as you have built your credit history.

Looking for information on refinancing during COVID-19? Read ”Key Things to Know When Refinancing During COVID-19” to learn more.