Best Starter Credit Cards for No Credit of August 2020

FULL 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

Like other secured credit cards for people building or rebuilding credit, the Discover it® Secured requires a cash security deposit. Unlike most others, it offers rewards. But what really makes it stand out from the competition is its upgrade possibilities. The issuer has a process in place for automatically reviewing accounts for possible transition to an unsecured card. 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.