Are you curious about First Time Credit Card With No Credit History? How do they work? And how can you get one? If your answer is yes, you’re at the right place.
You’ve decided to apply for a credit card. It’s important to you that you are responsible for your money and that you can make the monthly payments. It can be hard to get a credit card if you don’t have a credit history.
You can quickly build your credit by opening a credit card. However, if you don’t have a credit history, you will have limited choices.
Then, how can you get a Credit Card With No Credit History? There’s no need to panic. It’s possible to obtain a credit card without having a credit history.
This article discusses First Time Credit Card With No Credit History, what they are, and how they work.
So, let’s begin.
Table of Contents
What is A Credit Card?
The purpose of a credit card is to allow you to borrow money for purchases. An individual’s credit limit identifies how much the credit card company will allow them to spend. You usually will not pay a fee for using the card if your balance is paid in full every month. The interest you pay on a monthly balance depends on how long you carry the balance. Your interest rate, expressed as an APR or annual percentage rate, is determined by your credit history and the type of card you have.
What Does Credit Card With No Credit History Mean?
A credit score of less than 500 could be indicative of someone who has never taken out a credit card or applied for a loan. An individual’s credit history refers to the amount of credit they have taken out and the amount they have repaid. Your credit history gives lenders a picture of how well you take care of your credit.
What is The Importance of A Credit History?
A person without a credit history usually is a student, a newcomer to the country, or someone who has never taken out a loan. Even though a clean slate may seem appealing, borrowing is safer when you have some history – whether it’s good or bad. You cannot be assessed as a credit risk without any record of credit. Credit cards and loans may not be available to you, even if you can easily repay them.
First Time Credit Card With No Credit History
The chances of receiving a secured credit card, store card, or student credit card are good regardless of the size of your credit file. A traditional credit card can be easier to obtain when you have these ties to your credit history.
The Secured Credit Card
The terms and conditions of a secured credit card are similar to those of a regular credit card. One of the biggest differences between these two types of loans is the requirement for a security deposit, which is usually the same as your credit limit. Secured cards are generally more accessible than traditional, unsecured credit cards as the deposit mitigates the issuer’s risk. Cards can be used as collateral to cover losses if you default on your payments.
Meanwhile, responsibly using your credit card can help build your credit history and elevate your credit score. To ensure this, you should pay your card on time every month and keep the balance on your revolving account below 30% of your credit limit. A refund of your deposit will be issued if you close or convert the account to an unsecured credit card.
| Pros | Cons |
| Easier issuance for banks due to lower risk | Requires funds for deposit |
| Commonly features low credit limits | |
| Some banks may not report secured card activity to credit bureaus, potentially hindering credit building efforts |
Retail Store Credit Card
Retail store cards are another option suggested by the Consumer Financial Protection Bureau.
The credit bureaus will report retail store cards to your credit report just like other credit cards. If you use the card responsibly, it could also build your credit. You can accomplish this by making consistent, on-time payments.
Remember that retail store cards might only be accepted at the store or group of stores they are connected with. The card’s terms and conditions can provide you with more information.
| Pros | Cons |
| General credit cards are easier to qualify for than specific ones | Limited usability to the issuing store |
| Typically carries higher interest rates |
Student Credit Cards
Student credit cards are one option for applicants Credit Card With No Credit History for an unsecured credit card. A student credit card usually functions like a regular credit card and doesn’t require a deposit like a secured card. Although many credit cards have similar eligibility requirements, they generally have different requirements. The eligibility requirements for student cards vary depending on the issuer, but typically, they are designed specifically for college students 18 and older.
| Pros | Cons |
| Lenders often forgive low income and no credit history | Some student cards may have high fees and interest rates |
| Many cards offering financial planning tools allow access to credit scores |
Required Documents for First Time Credit Card With No Credit History
The process of applying for a Credit Card With No Credit History doesn’t need to be complicated, but you will need this information on hand:
- A legal name in full
- Taxpayer identification number (ITIN) or social security number (SSN)
- Address
- The income before taxes for the year
- The status of your employment
- Rent or mortgage costs
- Contact information
Your application may be determined within seconds if you submit it online.
Application Process For First Time Credit Card With No Credit History
The eligibility requirements for Credit Card With No Credit History vary from issuer to issuer. The minimum credit score may be higher for some than for others. The interest rate on a credit card and the fees associated with it can also vary. The following are the general steps to take when applying for a Credit Card With No Credit History.
Credit Score Check
Your score indicates whether you are a creditworthy borrower. Your credit score won’t exist if you do not have any credit history. The difficulty of getting a traditional credit card can be attributed to that. The first step to getting started is to obtain a secured credit card, store card, or student credit card. Most of the top lenders use the FICO® Score, which is determined by a combination of three factors:
- Payment history is 35%
- Utilization of credit: 30%
- The length of your credit history is 15%
- The credit mix is 10%
- The new credit is 10%
Choosing the Right Credit Card
There are many different types of credit cards. Various rewards are offered, including points, miles, cash back, and more. The company also advertises 0% introductory APR periods or an introductory bonus. There are also credit cards available for people with bad credit. Store cards, secured credit cards, and student cards can be good options for customers with bad credit histories. Take a moment to consider what you need in a credit card.
Credit Card Comparison
Consider comparing different credit card options once you’ve narrowed your search. A good card can help you find the best terms and benefits. Here are a few things to keep in mind:
- Percentages (APRs)
- Fees for the year
- Transfer fees for balances
- Transaction fees for foreign transactions
- A fee for cash advances
- Payment minimums
Apply Online
It is possible to get a sense of whether or not you will be approved by getting prequalified. Credit scores won’t be affected by a soft pull of your credit. The lender will likely ask you for your income, monthly housing payment, and other basic information. It may only take a few minutes for an approval decision to be made.
Other Ways To Access Credit Card With No Credit History
You can access credit in other ways besides applying for a Credit Card With No Credit History on your own. It may also be possible to build credit through them. Getting a co-signed credit card with someone could be an option if you can become an authorized user on another account.
An Authorized User
A card that’s linked to an existing account you’re authorized to use is an authorized user card. There is a possibility that a friend or member of your family may want to add you to their credit card account.
You’ll receive a card as an authorized user so you can utilize the credit line on the account. Account responsibility ultimately rests with the primary cardholder.
It is important to check whether the issuer reports authorized users to credit bureaus. You may be able to build your credit history as an authorized user if the card issuer does report authorized users and if the card is used responsibly.
You can learn a lot about credit card management by being an authorized user. Additionally, some issuers, such as Capital One, allow eligible authorized users to create their own digital profiles, which makes it even easier to view the details of their cards.
A primary cardholder can also take advantage of these benefits. A single account makes it easier to keep track of spending. You could also earn rewards for spending with your primary cardholder, depending on the card.
A Credit Building Loan
A credit-builder loan may be an option if you don’t have a credit history or are rebuilding your credit.
Traditional loans require you to repay the borrowed money over time, while credit builder loans require you to borrow upfront and pay it back over a longer period of time. At the end of the loan term, you receive access to the loan amount after making fixed payments to the lender.
An on-time payment history is essential if you want to be offered a credit-building loan. You could build credit by keeping track of your payments because your payment history may affect your credit scores.
High-Cost Loans
There are also loans that don’t require credit checks for people with no credit history, such as payday loans. The risks associated with high-cost loans should be taken into consideration.
How Long Does It Take For A Beginner To Build Credit?
The process of building credit differs from person to person, so there’s no hard-and-fast rule. A credit score is generated from two to six months of credit activity in the major credit scoring models. The process of building a good credit score may take longer if you are starting from scratch.
As a general rule, establishing a credit score starts at the age of 18 since it’s the minimum age for a credit card. While minors are generally not permitted to use other people’s credit cards, it is possible for them to build credit before they turn 18.
Pros and Cons of First Time Credit Cards With No Credit History
A credit card may seem intimidating to those who have never had one. However, a credit card with no credit history can be beneficial if you don’t have good credit or a history of credit.
Pros
- You can improve your credit score with a credit builder card. Your credit rating will improve when you use your credit card to make purchases and avoid missing payments.
- It is helpful to spread the costs of purchases with a credit card so that they are more affordable. A credit card can cover household expenses until payday if any household emergencies occur mid-month.
- Consumer Credit Act covers purchases up to £30,000 made with a credit card.
- People with low or no credit scores can apply for credit builder cards because the application criteria are low.
- The interest-free period on certain credit cards allows you to avoid interest for a set purchase period.
Cons
- A person may get into debt if they fail to make their repayments promptly. You can avoid missing payments by setting up a direct debit from your debit card to your credit card.
- The credit limit on cards for poor credit is typically lower than that on other credit cards. You’re treated as a risky borrower when your credit report isn’t impressive. Your chances of getting your limit increase as you improve your credit score.
- In order to help lenders reduce the risk of losing money if you fail to repay your debt, credit builder cards often have a higher Annual Percentage Rate (APR) than other credit cards.
How To Get A Credit Card With No Credit History If You Are Denied?
Reasons You Were Denied
An adverse action letter explains why the lender denied you a Credit Card With No Credit History. Your credit report can help you determine where you may be able to improve, and the lender has the right to give you a free credit report as well.
Appeal The Decision
Lenders might reconsider their decision if they believe a mistake has been made. For example, the card issuer incorrectly used your income information when determining your application. You may receive approval if they reverse their decision.
Get Your Credit In Order
A legitimate reason may be given for declining your application. The more steps you take to resolve these issues, the more likely you are to be approved in the future. You were declined due to a history of late payments or a high credit utilization ratio, for example. The more you know about your credit, the more proactive you can be about improving it.
FAQs
Does Checking My Own Credit Score Cause It To Lower?
No, checking your credit score constitutes a “soft inquiry” or “soft pull,” which does not impact your credit score. Alternatively, a hard inquiry can affect your score for a short period of time, such as when you apply for a credit card.
Is My Credit Report Checked By Card Providers?
The credit report of every reputable credit card provider will be checked. Low credit scores may, therefore, result in you being declined.
How Long Does it Take To Be Approved For A Credit Card?
It usually takes about 10-15 minutes to apply for a credit card online, and you’ll learn within moments whether you’re approved. You may receive a response after up to two weeks if a provider needs to review your application further. To determine your approval chances, you should check your eligibility before making a formal application. Also You can get Best Balance Transfer Credit Cards For Poor Credit.
Can you Get A Credit Card With No Credit History?
The invisibility of credit can make getting credit cards and loans more challenging or costly. Credit Card With No Credit History can be obtained even without credit. In order to help establish and build your credit, consider applying for a secured credit card, a student credit card, or a retail store credit card.
Conclusion
It can be difficult to get a Credit Card With No Credit History, but it is not impossible. Secured credit cards, student cards, and store cards are good places to start. You can move on to a traditional card after establishing a track record of timely payments and responsible credit usage.
