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Even though the well of loose credit has been dry for about three years, there are still a few easy credit cards available to those who, for whatever reason, have bad or no credit. In fact, those who have limited credit have quite a few attractive options.
No Credit – Students
Out of the no-credit-history cohort, students have it the easiest. Banks understand that a dewy-eyed freshman getting his first credit card isn’t going to have a well-established payment history. After the CARD Act of 2009, though, students must either have a steady stream of income or a co-signer (usually a parent). There are quite a few student credit cards that give low interest rates or high rewards. In our opinion, one of the best student credit cards is the Citi Forward® Card, which gives 5% rewards on music, movies, bookstores (read: textbooks) and dining out. It also gives 1% on all other purchases, plus a host of good-behavior bonuses.
No Credit – Young Adults
Unfortunately, once you leave the protective cocoon that is higher education, establishing a credit history becomes more difficult. In order to qualify, you must have either income or a co-signer (actually, this is true for everyone, but it’s a dramatic change for college students and young adults), and banks are more likely to look askance at a twenty-something who’s been in the labor force awhile but hasn’t established a payment history. Fortunately, a couple of credit cards cater to just this segment: banks that use Elan card services (generally smaller banks and credit unions) offer a Young Adult Visa with low or no annual fees and decent interest rates. This card does require a cosigner with decent credit.
No Credit – Immigrants
When you first move to the States, your credit history is wiped out. No matter how good a score you’ve built up abroad, you need to start over. Fortunately, the Capital One® Cash Rewards for Newcomers is targeted at immigrants with an income, but not necessarily a credit history. It offers 1% rewards on all transactions, 2% rewards on travel and no foreign exchange fee, great for traveling home.
If you have just plain bad credit, your options are even more limited. The easiest credit card to qualify for is the Capital One® Secured Mastercard®.
One thing we like about this card is its flexibility. You can pay your $200 security deposit in smaller increments, as long as you pay the full amount within 80 days after your approval. The Capital One® Secured Mastercard® also has a flexible line of credit, which you can increase up to a maximum of $3000 by providing additional security deposits.
Another good card for bad credit is the Citi® Secured Mastercard®, but be warned: this card requires you to be you to be out of bankruptcy for a year before you can qualify. The Orchard Bank card used to be another top pick, but now that Capital One owns HSBC (Orchard Bank’s parent company), this card is being phased out.