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Best Starter Credit Cards for No Credit of May 2020

NerdWalletMay 1, 2020

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The best starter credit cards are easy to get, have no annual fee and report your payments to the three major credit bureaus.

The right card for you depends on your situation. Options include secured credit cards — which require refundable upfront deposits — student credit cards and alternative credit cards from smaller issuers that evaluate applicants' creditworthiness on factors other than FICO credit scores.

NerdWallet's Best Starter Credit Cards for No Credit of May 2020

Best Starter Credit Cards for No Credit From Our Partners

Our pick for

Secured cards: Rewards and upgrading

Secured credit cards can be a good option for those with no credit who want a starter card from a major issuer. These cards require an upfront refundable deposit, usually equal to the card's limit. That cash collateral is returned to you if the card is upgraded to an unsecured account or closed in good standing.

Discover it® Secured

on Discover's website, or call (800) 347-0264

Rates & Fees

on Discover's website, or call (800) 347-0264

Rates & Fees
Annual Fee

$0

Regular APR

22.99% Variable APR

Intro APR

10.99% on Balance Transfers for 6 months

Recommended Credit Score
With the Discover it® Secured you have the chance to get automatically upgraded to an unsecured card and get your deposit back without having to close your account. It also earns rewards, nearly unheard-of for a secured card. Like almost all secured cards, you can qualify with no credit.

Pros

You earn 2% cash-back on up to $1,000 in combined spending per quarter at restaurants and gas stations, and 1% on all other spending. Discover will automatically match all the cash back you’ve earned at the end of your first year. The annual fee is $0. And after eight months, Discover automatically begins evaluating your account to see if you qualify for getting your security deposit refunded.

Cons

For some, the $200 minimum deposit might be hard to pull together — especially since you need to have the funds ready upfront when you apply.
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line with your tax return by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • INTRO OFFER: We automatically match all the cash back you've earned at the end of your first year.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • View Rates and Fees

Our pick for

Student cards: Simplicity and value

Student credit cards are ideal for working college students. Unlike secured cards, they don't require upfront deposits. If you're under 21, however, you have to have an independent income to qualify.

Discover it® Student chrome

on Discover's website, or call (800) 347-0264

Rates & Fees
Annual Fee

$0

Regular APR

12.99% - 21.99% Variable APR

Intro APR

0% on Purchases for 6 months and 10.99% on Balance Transfers for 6 months

Recommended Credit Score
The Discover it® Student chrome is a standout student credit card due to its no-frills rewards structure and student-friendly features. And, according to Discover, you don't need a FICO history to qualify.

Pros

This card features simple rewards: You earn 2% cash back at restaurants and gas stations, on up to $1,000 in combined purchases per quarter. All other purchases earn 1%. The annual fee is $0. It comes with a potentially generous sign-up offer: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched. If you maintain a GPA of 3.0 or higher, you also get a $20 statement credit every year for up to five years.

Cons

Discover isn’t the most ideal payment method abroad, so this card isn't the best one to take on a study abroad trip. The network isn’t as widely accepted internationally by merchants as Visa or Mastercards.
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • View Rates and Fees

Our pick for

Student cards: Bonus category cash-back rewards

Discover it® Student Cash Back

on Discover's website, or call (800) 347-0264

Rates & Fees
Annual Fee

$0

Regular APR

12.99% - 21.99% Variable APR

Intro APR

0% on Purchases for 6 months and 10.99% on Balance Transfers for 6 months

Recommended Credit Score
The Discover it® Student Cash Back offers a generous rewards rate on quarterly bonus categories upon activation. Discover says there is no FICO history requirement to qualify.

Pros

This card offers 5% cash back in rotating categories on up to $1,500 in spending per quarter. Activation is required. All other spending earns 1% cash back. It has a $0 annual fee, no late fee on the first late payment and an annual $20 statement credit (for up to five years) when you earn good grades. It also has a potentially rewarding sign-up bonus: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.

Cons

Bonus categories may not match your spending at all times and you'll have to activate them every three months to get the higher rewards rate. It can be a lot to manage when you’re just starting out with credit. Discover also isn’t as widely accepted abroad as Visa or Mastercard.
  • INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
  • Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • View Rates and Fees

Our pick for

Student cards: International students

Deserve® Edu Mastercard for Students

on Deserve's website

Annual Fee

$0

Regular APR

18.74% Variable

Intro APR

N/A

Recommended Credit Score
The Deserve® EDU Mastercard for Students is an excellent starter card for students who lack a U.S. credit history, a Social Security number or both. The card's issuer has its own underwriting process that evaluates applications based on alternative factors.

Pros

This $0-annual-fee card may be the exception for students who can’t qualify for other credit cards — international students included. Deserve uses its own underwriting process to evaluate applications based on alternative factors like your U.S. bank account and contact information. If you’re an international student, you don’t need a Social Security number to qualify. Cardholders get 1% cash back on all purchases and a statement credit for a 12-month Amazon Prime Student subscription.

Cons

Other student credit cards offer higher rewards rates, but in some cases, come with stricter requirements. Rewards only redeem for a statement credit and you have to wait until you’ve earned $25 before they automatically redeem.
  • Receive one year of Amazon Prime Student on Deserve after your first purchase with your new Deserve EDU Mastercard (Lifetime Value of $59).
  • Earn 1% Cash Back on all purchases with your Deserve EDU Mastercard. Once approved, you'll automatically start earning cash back on all purchases.
  • Feel secure with cell phone protection up to $600.
  • No deposit required. No annual fees.
  • No international transaction fees on purchases abroad so you can travel with confidence.
  • No Social Security Number required for international students to apply.
  • Refer A Friend Program: Refer anyone to Deserve using your personal referral code. Upon approval, card activation and use, you'll receive $30 and so will your referral. Referral bonuses are unlimited!
  • Manage and track your spending, set automatic payments and securely freeze your card all through one easy to use app.
  • See if you prequalify with no impact to your credit score in minutes.
  • Deserve Mastercards are issued by Celtic Bank, Member FDIC.
  • Enjoy Mastercard Platinum Benefits intended to make your life easier like Mastercard ID Theft Prevention™ and Master Rental®.

Our pick for

Small-business card: Startups

Brex

on Brex's website

on Brex's website

Annual Fee

$0

Regular APR

N/A

Intro APR

N/A

Recommended Credit Score
The Brex Card for Startups is ideal for business owners with no credit history and plenty of cash in the bank. It's one of the very few small-business cards that doesn't require a personal guarantee, meaning you're not personally on hook for outstanding balances if your business fails. Brex evaluates creditworthiness by looking at a company’s cash balance, spending patterns and investors.

Pros

This $0-annual-fee card packs a lot of opportunities to earn rewards and discounts on business expenses. Earn 75,000 in Brex Rewards points upon signup and waived card fees for life (equal to $750+ value). With this card, you'll get 1 point per dollar spent on purchases or more points if you make the Brex Card for Startups your only company card for expenses. If you do, you'll get 7 points per dollar on rideshares, 4 points per dollar on travel booked through Brex, 3 points per dollar at restaurants and 2 points per dollar on recurring software expenses.

Cons

You need $100,000 in your bank account to qualify for this card. And, since it’s a charge card, you’ll have to pay the full balance at every billing cycle.
  • 75,000 in Brex Rewards points upon signup and waived card fees for life (equal to $750+ value)*
  • No personal guarantee needed - we do not ask for a personal credit check or security deposit during the application.
  • Credit limits 10-20x higher than traditional small business corporate cards.
  • $100,000 bank balance required to qualify for Brex.
  • Exclusive signup offers from the best products and tools for your business (e.g. AWS, Google Ads, WeWork, Salesforce) worth over $50,000 in value.
  • Earn points on every dollar spent with industry-leading multipliers: 7x on rideshare, 4x on travel, 3x on restaurants, 2x on software subscriptions and 1x on all other transactions.
  • Miles transfer program to 6 airlines (including Singapore Airlines, Qantas, Air France, and more) and their loyalty programs, giving Brex customers access to book travel across all of the major global airline alliances - Star Alliance, Oneword, and SkyTeam.
  • 30-day charge card running on the Mastercard network. Enjoy global acceptance with no foreign transaction fees.
  • Build business credit: Brex partners with Dun & Bradstreet and Experian to report your on-time payments.
  • Make employee expenses seamless - automated receipt-capture and expense matching and reconciliation via text and email. Instantly add new users and set spending limits.
  • Simplify reconciliation with built-in integrations with Quickbooks, Xero and more.

Want to compare more options? Here are our other top picks:

COMPLETE LIST OF EDITORIAL PICKS:
BEST STARTER CARDS FOR NO CREDIT

Click the card name to read our review. Before applying, confirm details on the issuer’s website.

 

» SECURED CREDIT CARDS 

Secured credit cards can be a good option for those with no credit who want a starter card from a major issuer. These cards require an upfront refundable deposit, usually equal to the card's limit. That cash collateral is returned to you if the card is upgraded to an unsecured account or closed in good standing.

Capital One® Secured Mastercard®

Our pick for: Secured card — low deposit

The Capital One® Secured Mastercard® requires a security deposit, as do all secured credit cards. But while most cards require you to put down a deposit equal to your credit line, this one allows some qualifying applicants to get a $200 credit line with a deposit of $49 or $99. Further, if you make your first five payments on time, you might get access to a higher credit line with no additional deposit. Read our review.

Discover it® Secured

Our pick for: Secured card — rewards and upgrading

What makes the Discover it® Balance Transfer (No longer in market) stand out from other balance-transfer cards is its ongoing cash-back rewards, which give you a great reason to keep using the card regularly even after its introductory 0% APR period ends. Read our review.

 

» STUDENT CREDIT CARDS 
Student credit cards are ideal for working college students. Unlike secured cards, they don't require upfront deposits. If you're under 21, however, you have to have an independent income to qualify.

Discover it® Student chrome

Our pick for: Student card — simplicity and value

Simplicity makes the Discover it® Student chrome a standout for students searching for their first credit card. You'll earn bonus cash back at restaurants and gas stations with no activation required and no rotating categories to keep track of. Read our review.

Discover it® Student Cash Back

Our pick for: Student card — bonus category cash-back rewards

The Discover it® Student Cash Back gives students the same excellent rewards as the regular Discover it® Cash Back — notably, bonus cash back in rotating categories that you must activate. Activating and tracking categories might be too much of a hassle for some students brand new to credit cards, but if you're up for a little work, the rewards can be handsome. Read our review.

Deserve® EDU Mastercard for Students

Our pick for: Student card — international students

The Deserve® EDU Mastercard for Students doesn’t require applicants to have a co-signer or security deposit, and international students don't need a Social Security number. That makes it a little easier to get approved — even for students with limited credit histories. Plus, it comes with a solid 1% back on all purchases. Read our review.

 

» NO-DEPOSIT STARTER CARDS

It's possible to qualify for these cards without a U.S. credit history if you meet other criteria.

Deserve® Pro Mastercard

Our pick for: No-deposit starter card — newcomers to the U.S.

It's not easy to establish credit as an immigrant in the U.S., even if you had a good credit history in your home country. The Deserve® Pro Mastercard uses an underwriting process that also takes employment and income into consideration. There's a rewards program, too. Read our review.

Petal® Visa® Credit Card

Our pick for: No-deposit starter card — no fees 

The issuer of the Petal® Visa® Credit Card doesn’t only rely on credit scores to determine eligibility. Instead, it assesses your creditworthiness based on your income, expenses, savings and debts. You can earn a decent rate of up to 1.5% cash back, depending on your on-time payments. And there's no annual fee, late fees or foreign transaction fees. Read our review.

American Express Cash Magnet® Card

Our pick for: No-deposit starter card — foreign credit histories

(Through a partnership between American Express and the international credit-reporting startup Nova Credit, immigrants and expats in the U.S. can instantly translate credit reports from certain countries to U.S.-equivalent credit reports when applying for AmEx consumer cards. This feature is integrated into AmEx's online applications. Currently, it can access credit histories from bureaus located in the following countries: Australia, Canada, India, Mexico and the United Kingdom.)

The American Express Cash Magnet® Card pays a simple, flat cash-back rate on all purchases, with no limit to how much cash back you can earn. Plus, get a decent bonus offer and an introductory 0% APR period. If you want an AmEx card with a no-hassle rewards structure, this is your card. Read our review.

 

» BUSINESS CREDIT CARD  

Brex Card for Startups

Our pick for: Startups 

Unlike most cards designed for entrepreneurs, the Brex Card for Startups doesn't require the cardholder to personally guarantee the debt on the card. Instead, Brex determines creditworthiness by evaluating a company's cash balance, spending patterns and investors. It's a good option when a business owner has a thin credit file but is well-capitalized. The card earns rewards, too. Read our review.

 

What do you need to qualify for a starter credit card?

You don't need a credit history to get a starter card. In some cases, you won't need a Social Security number. But generally, you'll need:

  • A U.S. mailing address.
  • Income.
  • A checking or savings account.

Depending on your age, you might have to meet stricter income requirements to qualify:

If you’re under 21: To qualify for a credit card, you'll need to show that you can make payments on the account independently or get a co-signer, someone 21 or older who assumes the responsibility of your debt if you can’t pay the bill.

If you’re over 21: You’re still required to report your income if you’re over 21, but you have the option to list any income to which you have “reasonable expectation of access.”

Other requirements can vary depending on the type of starter card. Some examples:

  • Secured cards. These require a cash deposit as collateral to reduce the risk to the issuer, which may present an obstacle for some applicants. The amount deposited usually determines your credit limit. With a good payment history, you eventually get your deposit back when you close the account or upgrade to a regular credit card.
  • Student cards. These may require you to be an enrolled college student. You might have to provide information like the name of your school, your major and your expected graduation year.
  • No-deposit starter cards. Applications for these cards may require government-issued documents, bank account information, employment verification requirements and other details. That's because they assess creditworthiness in alternative ways, such as looking at employment, income, spending, savings or your credit history from a different country.
  • Small-business cards. At least one issuer offers small-business cards without taking personal credit history into account, but to qualify, you'll have to have plenty of cash in the bank.

» MORE: NerdWallet’s guide to your first credit card

How does a credit card affect my credit?

A credit card can help you make or break your credit history.

As you’re making payments on your credit card, that history is being recorded in your credit report which compiles the information used to calculate your credit score.

As long as you make on-time payments and stay well below your credit limit, you can work your way up to a good credit score of 690 or higher. Your payment history makes up 35% of your FICO credit score. And, the amount of available credit used accounts for 30% of your credit score.

How long you keep the account open also impacts your credit. Once you work your way up to good credit, it's helpful to keep the starter credit card open or maintain the original line of credit by upgrading to a regular credit card with the same issuer. This way, you preserve the length of your credit history which accounts for 15% of your credit score. Closing your account could have negative consequences.

» MORE: Using a credit card to build your credit

What to look for in a starter credit card

When you’re new to credit, you generally can't qualify for the best credit card offers. Among starter cards, ongoing interest rates are often steep and credit limits are low.

But in some cases, you can be choosy. Here are a few things to look for in a starter credit card:

No annual fee. A starter credit card that doesn’t charge an annual fee makes it easier to preserve the length of your credit history and your credit score because you can keep it open for a long time at no cost.

A path to a better credit card with the same issuer. Look for this option during your initial search. Once you establish a good credit history, you could upgrade to a better credit card with the same issuer and keep your original line of credit. This way, you're not stuck with the lower credit limits and lower rewards rates typically found on starter cards.

A report to all three credit bureaus. The ideal starter credit should report payments to all three credit bureaus — TransUnion, Equifax and Experian. These companies record your payment history which is a key factor in your credit score. It helps to cover your bases when a lender pulls your credit report. This way, they can access your credit history and have all of the information they need to make a decision.

Here are some features that are less important but could still prove valuable:

Travel-friendly features. If travel is in your future, consider getting a credit card that doesn’t charge foreign transaction fees — a percentage assessed on every international purchase, typically between 1% and 3% of the amount charged. You can also choose a credit card that belongs to a Visa or Mastercard network which has broad international merchant acceptance.

Rewards. On a starter card, these aren't a top priority, but many cards offer them. If you're deciding among multiple rewards cards, consider your spending habits and how well they match up with the bonus categories.

» MORE: What really matters for your first credit card

Making the most of your starter credit card

With a starter card, your goal should be to hit or exceed the 690 credit score target necessary to establish good credit. Here's what you can do to work toward that:

  • Pay on time and in full every month to avoid interest (or at least pay more than the minimum).
  • Aim to use less than 30% of your available credit limit at all times. The lower your balance, the better.
  • Keep the account open and active.
  • Check your statement for mistakes.
  • Monitor your credit score through your issuer’s app.
  • Get your free annual credit report.

You can track your credit score for free through NerdWallet, certain banks and other third-party apps.

 

To view rates and fees of the American Express Cash Magnet® Card, please visit this page.

Last updated on May 1, 2020

Methodology

NerdWallet's credit cards team selects the best cards in each category based on overall consumer value. Factors in our evaluation include fees, promotional and ongoing APRs, and sign-up bonuses; for rewards cards, we consider earning and redemption rates, redemption options and redemption difficulty. A single card is eligible to be chosen in multiple categories.