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Getting a credit card with no credit history is a huge challenge. Although building a solid score is essential to your financial health, getting there starts to feel impossible when no one will give you a first-time credit card.
But the Nerds did some digging and uncovered a few products that will meet your needs. These are the best credit cards for people with no credit:
If you have no credit because you’re a student
If your credit history is limited because you’re a young adult and in school, the good news is that there are some pretty decent student credit cards out there today. Remember, per CARD Act regulations, you may need a cosigner to get one of them if you’re under 21 and don’t meet certain requirements. Not all issuers offer a cosigning option. Check with the credit card company if you’re not sure whether you can qualify independently.
Here are our favorite student credit cards:
Discover it® for Students
The Discover it® for Students is much like its grown up cousin, the Discover it® - Cashback Match™. With it, you’ll earn 5% cash back in rotating quarterly bonus categories, up to $1,500 spent per quarter. You’ll also earn 1% cash back on all other purchases.
One of the great things about opting for the Discover it® for Students is that you’ll get free access to your FICO credit score. This will allow you to track your progress toward building good credit on a monthly basis.
In terms of fees, the Discover it® for Students charges no foreign transaction fees and an annual fee of $0. All in all, it’s a great starter card to consider.
Citi ThankYou® Preferred Card for College Students
If you’re like most college students, you probably spend a lot of money each month on going out. Luckily, the Citi ThankYou® Preferred Card for College Students will provide good rewards on these purchases: You’ll earn 2 ThankYou points per dollar spent on dining out and entertainment and 1 ThankYou point per dollar spent elsewhere. You can redeem your ThankYou points for gift cards, merchandise and other items.
Unlike most other student credit cards, this one comes with a signup bonus: Earn 2,500 bonus ThankYou® Points after spending $500 within the first 3 months of cardmembership. Since the Citi ThankYou® Preferred Card for College Students charges an annual fee of $0, it’s another cost-effective card to get you on the road to good credit.
If you have no credit because you’ve avoided borrowing
Getting into the thick of adulthood without ever opening a credit card or loan makes it tough to qualify for most mainstream plastic. You’ll probably have to start out with a secured credit card, which will require making an up-front deposit. But thankfully, if you make it a priority to pay on time and in full, you should be able to upgrade to an unsecured card pretty quickly.
Here are our favorite secured credit cards:
Wells Fargo Secured Visa Card
We like the Wells Fargo Secured Visa Card because it charges a low annual fee compared with other secured cards — the annual fee is $25. You’ll be able to get a credit line of $300-$10,000, depending on the size of your deposit. The ongoing APR is 19.99% Variable.
Another factor to consider is that the Wells Fargo Secured Visa Card is issued by a major bank. After a period of time (usually about 12 months) you may be able to upgrade to one of its unsecured cards if the credit history you’ve built is positive. Since this is the ultimate goal, picking a card that makes this process smooth is a smart choice.
UNITY® Visa Secured Credit Card - The Comeback Card™
The UNITY® Visa Secured Credit Card - The Comeback Card™ charges a somewhat higher annual fee than the Wells Fargo Secured Visa Card, but at $39, it’s certainly not outrageous. Also, its interest rate is slightly lower at 9.95% on balance transfers for 6 months, and then the ongoing APR of 17.99% (Fixed).
With this card, you’ll be able to get a credit line of $250-$10,000, depending on how much you initially put down. Also, your activity on the UNITY® Visa Secured Credit Card - The Comeback Card™ is reported to the three major credit bureaus. As long as you’re spending and paying responsibly, you should be on your way to an unsecured card in no time.
Tips for building a solid score
No matter which no-credit situation you’re in, your objective is the same: Build good credit as quickly as possible. To get there, be sure to follow the Nerds’ top tips:
- Pay all of your bills on time – no exceptions.
- Keep the balance on your credit card below 30% of your credit line at all times throughout the month. This might be tough if your credit limit is low, but making multiple payments throughout the month is a trick that might make it easier.
- Use your credit card consistently.
- Don’t apply for any additional credit cards right now – in general, it’s best to wait until you have a year of credit experience under your belt before trying to get another card.
- Check your three credit reports once per year at AnnualCreditReport.com. If you spot an error, take steps to have it corrected.
With our card suggestions and advice, we’re confident you’ll make the leap to the good credit zone in no time. Happy swiping!
» MORE: Credit cards for bad credit
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