Establishing your credit score isn’t easy, especially if you’re young or new to the country. Also, it takes time and in some instances, you just don’t have it. Now, if you’re looking to build your profile, you may want to start out with a credit card.
Now, it can be quite tricky for you to get a good credit card without good credit, but that’s where we come in. We’re going to try and point you in the right direction and help you find the best credit card even if your credit score is very low.
How Do You Get A Credit Card With No Credit?
All it takes for you to get a credit card is to go to the bank and apply for the credit card, right? Well, yes, but no. When you apply for a credit card, banks or credit card companies perform a check. They check your credit score and the credit report in order to find out how financially responsible you are.
However, if you’ve never had a loan or a card, your report will be non-existent, which means you won’t have a credit score which means you won’t get a good deal on a credit card, right? No. There are cards specially designed with people like you in mind. So, when the time comes and you want to take out a credit card – ask for those.
Do You Have Options?
In general, your options are “limited” to either secured or student cards.
Secured cards are the ones with a very low or no-score requirement, but they do come with a catch. You’ll need to deposit some funds with the bank first, to cover the expenses in case you ever decide to stop making your payments for whatever reason. The deposit will also serve as your credit limit until you build your score and upgrade to an unsecured one. Additionally, the deposit is entirely refundable, so you don’t have to worry about losing money.
The drawback of these cards is that they’re usually a bit heavy on the fees, but other than that, they can be used in the exact same way as the unsecured ones.
On the other hand, student cards, as you can tell from the name, are designed for university students, over the age of 18, that haven’t had the time to build their credit score. Contrary to secured cards, student ones don’t require any initial deposit and they usually come with low interest rates. These are the most similar to the regular, unsecured cards and they often come with some additional promotions or bonuses.
Key Features Of Credit Cards For People With No Credit
To be fair, your options are fairly limited, but still, if you know what to look for, you can get a better deal on a card.
Annual percentage rate or APR is usually one of the things people are mostly focused on when selecting a credit card, but in this case, it’s not that important. For an entry-level card like this, you’ll pay off the balance on a monthly basis, therefore, APR won’t matter as much. However, if you do have the option to choose a card with a better APR – do it.
Ideally, you’ll want to look for a card without a ton of fees. Student cards are a safe choice. In most cases, you aren’t burdened with things like maintenance, application and other fees, as you can tell from https://www.creditcard.co.in/best-credit-cards.
On the other hand, secured cards are usually very expensive to use, but unless you’re a college student, that’s what you’ll have to deal with.
Now that you know the main features and how to obtain these cards, let’s take a look at some of them.
Wells Fargo Cash Back College
This is arguably the best card for students without credit. It checks all the boxes when it comes to being a great card. It comes with a 0% introductory APR for the first 6 months. It has no annual maintenance fees and it comes with some nice rewards as well. You get a 3% cash rewards on purchases like gas and groceries for the first six months, followed by a 1% cash reward for every other purchase.
You will need a Wells Fargo account to apply for the card, but it would be worth it to open up an account just for the sake of this card. Additionally, we wouldn’t recommend using this card overseas if you don’t have to, as it costs a little bit extra to do so.
Discover it Secured
For people that aren’t students, but still don’t have credit – Discover it Secured might be the right choice. It’s not common for a secured card to come with a 0% annual fee, but this one does. You’ll need a $200 cash deposit to obtain the card and you will have to pay upfront, in a single instalment. You also get cashback rewards, which is rare for a secured credit card. What’s even rarer is that this one actually helps you build credit with three major credit bureaus and if you make regular, on-time payments, you will get upgraded to an unsecured card and you’ll get your deposit back.
There are some drawbacks to this one, such as a pretty low credit limit compared to some other secured cards and a low cap on the highest rewards earning rate, but other than that, you get a pretty solid card.
Jasper Cash Back Mastercard
If you sign up for this one during this month, you’ll be met with a $100 bonus, but that’s not all that’s great about this one. This one, just like the previous ones, doesn’t come with any annual fees. Additionally, you won’t have to make a security deposit and the variable APR is pretty solid. However, all of that pales in comparison to the rewards you could get with this one. If you refer enough friends, you can enjoy as much as 6% cashback, on every purchase, for the first year!
The drawback of this one is, if you don’t refer any friends to become cardholders – you’re stuck with only a 1% cashback rate, which is less than ideal.
You don’t have to worry if you don’t have any credit – you can still build one with one of these cards. Hopefully, we have managed to help you learn how to choose a solid credit card and we hope one of our picks suits your needs.