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How to Get a Credit Card With No Credit

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credit card for no credit

If you’re new to credit and have not yet established a credit history, it can often seem impossible to find a lender willing to approve you for your first credit card. It’s a bit of a Catch-22 — lenders want to see your credit history and how well you’ve managed credit obligations in the past before they’ll extend new credit, but how do you get credit if you don’t have credit? It’s a frustrating dilemma that most of us face at some point in our lives. Fortunately, the situation isn’t as dire as you may think.

How Do I Get a Credit Card With No Credit?

There are credit cards for no credit. Secured credit cards, in fact, are specifically designed to help people build or rebuild their credit scores, while student credit cards, too, are geared toward young consumers who are just getting started. Plus, you could always see if a friend or family member will add you as an authorized user on their credit card account.

We’ll break down all these options to help you find the best first credit card for you. But, before you assume you don’t have a credit score, be sure to check yours. If any of your accounts (including student loans) have reported information to the major credit reporting agencies in the last six months, you should have a score. You can check two of your credit scores for free every 14 days at Credit.com.

What Is a Secured Credit Card?

A secured credit card works much like a traditional credit card, except you open the account by making a cash deposit to “secure” the card. The credit limit on a secured card is equal to the cash deposit, which acts as collateral and minimizes the bank’s risk in the event that you don’t pay the bill. For example, if you deposit $1,000 for a secured card, your credit limit on the card would be equal to $1,000. Most secured cards can be opened with as little as $200 or as much as $2,000.

What Should I Look for in a Secured Credit Card?

If you’re opening a secured credit card for the purpose of establishing credit there are a few things you need to be aware of. First, secured cards often carry high-interest rates and annual fees, so they’re not something you’ll want to use long term. The goal is to establish and build good credit, after which you’ll want to convert to a traditional credit card with lower interest rates and better terms.

Recommended secured credit card

Discover it® Secured Card – No Annual Fee

Apply Now
on Discover's secure website
Card Details
Intro Apr:
N/A

Ongoing Apr:
23.49% Variable on purchases & balance transfers

Balance Transfer:
Intro: 10.99% for 6 months

Annual Fee:
$0

Credit Needed:
Poor-Bad-No Credit
Snapshot of Card Features
  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • A security deposit of $200 or more will establish your credit line (up to the amount we can approve). Automatic monthly reviews starting at 7 months to see if we can transition you to an account with no security deposit.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, unlimited 1% cash back on all your other purchases.
  • Tools to assist you; email alerts, text reminders and 24/7 customer service. Plus get your FICO® Credit Score for free on monthly statements and online.
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • No late fee on your first late payment. And paying late won’t raise your APR.

Card Details +

Second, not all secured credit card issuers report to all three major credit reporting agencies. Because you’re establishing credit for the first time, you want to make sure the card is reported to the three main credit bureaus — Equifax, Experian and TransUnion — so you’re getting credit for managing the account responsibly. Remember, if it’s not in your credit reports, the account won’t factor into your credit scores and it won’t help you establish and build great credit. (You can learn everything you need to know about secured credit cards.)

What Is a Student Credit Card?

Lots of big issuers offer starter plastic specifically geared toward students. These cards are generally unsecured — meaning they don’t require a deposit as collateral. They do, however, come with lower credit limits, so new cardholders can’t get themselves into too much trouble. Just be aware: If you are a student looking for a credit card, you may need a little help qualifying. Under the CARD Act of 2009, anyone under 21 must demonstrate their ability to repay (via some sort of income) or have a willing co-signer in order to get a credit card.

What Should I Look for in a Student Credit Card?

Again, your aim is to build credit, so it’s best to opt for a no-frills card. Issuers are hankering to establish financial relationships with new marketplace entrants, so there are quite a few student credit cards that offer no annual fee and competitive annual percentage rates (APRs). There are also some that offer rewards. If you are interested in points, miles or cash back, consider cards that pay out for smart spending habits (like making on-time payments) or a good GPA. (You can find our picks for the best student credit cards.)   

Recommended student credit card

Discover it® for Students

Apply Now
on Discover's secure website
Card Details
Intro Apr:
0% for 6 months on purchases

Ongoing Apr:
13.49% - 22.49% Variable on purchases & balance transfers

Balance Transfer:
Intro: 10.99% for 6 months

Annual Fee:
$0

Credit Needed:
Fair
Snapshot of Card Features
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Earn 5% cash back in rotating categories each quarter like gas stations, Amazon.com, restaurants, wholesale clubs and more, up to the quarterly maximum each time you activate. Plus, unlimited 1% cash back on all other purchases.
  • Good Grades Rewards: $20 cash back 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 & your FICO® Credit Score for free on monthly statements & online.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 13.49% - 22.49%.

Card Details +

How Do I Use my First Credit Card Responsibly?

No matter what type of card you wind up getting, you’ll want to stick to two primary rules to ensure you build good credit:

1. Make your monthly payments on time, every time. Your payment history accounts for 35% of your credit score and paying late or missing payments can have a detrimental impact your credit standing. This may sound obvious, but the first step to establishing great credit is to make your payments on time, every time — no exceptions.

2.Keep your balance as low as possible. A significant portion of your credit score factors in the percentage of your balance in relation to your credit limit on your credit cards (often referred to as your revolving utilization). In short, the lower your revolving utilization, the better your credit score, which means you’ll want to keep your balances to a minimum. Keep in mind that secured cards and student credit cards often have very low credit limits, so even a balance of just a few hundred dollars can often wreak havoc on your credit scores. To earn the maximum number of credit score points, you’ll want to limit your credit card spending to no more than 10% of your credit limit. As an example, if you have a credit limit of $1,000, you would want to keep your balance from going over $100. (Even if you pay it off every month, you wouldn’t want the balance to go over $100 if your primary goal is to boost your credit scores.)

What’s an Authorized User?

There’s another option worth mentioning when it comes to getting a credit card with no credit. Most issuers allow their credit cardholders to add an authorized user to their account. This person gets their own card and, as such, can make charges, but they’re not responsible for paying the bills. That job still falls to the primary credit cardholder. Becoming an authorized user on friend or family’s credit card can help you build credit, because the account should appear on your credit report. As with secured credit cards, if you’re being added to an account in the hope of building credit, it’s a good idea to ask the issuer if they report authorized users to the credit bureaus. If they do, you will get “credit” for all of the good information associated with the account. You can learn more about authorized users here.

This article has been updated. It was originally published on October 30, 2013.


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