Credit Cards for No Credit | An Expert Guide
Trying to build credit can appear daunting as most credit cards are designed for people with established credit. But you should not get discouraged. There are still cards available for those with no credit history and getting a credit card can be an important first step in starting to build your credit. Our credit experts provide useful tips below. Click on the images below to learn more about credit cards for people with no credit.
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What To Look For When Applying
If you have no credit history and are looking for a credit card, your first priority will be to find a card that you can be approved for. One type of card worth considering is a secured card. These products require that you submit a security deposit, but otherwise work like any other credit card. Cardholders must make a payment each month, and interest charges can be incurred when you carry a balance. Other types of credit cards worth considering are student cards that are targeted at young adults, and even cards for newcomers that are targeted at recent immigrants. Finally, you might even consider applying for store charge card.
What To Avoid When Applying
Even if you have no credit, be aware of the costs of credit cards that carry poor terms, conditions and interest rates. For example, some credit cards charge a monthly fee, rather than an annual fee, which usually adds up to be more expensive. In addition, there are some cards that have interest rates above 30%, and others that have no grace period. Cards that offer a grace period allow you to avoid interest charges by paying your balance in full.
Should You Apply For More Than One?
When you are just starting out with credit cards, it's ideal to get started with a single account, and manage it responsibly. Once you have a track record of using a single account responsibly, then you can consider whether opening multiple accounts is right for you. In addition, submitting multiple new inquiries for credit can be seen as the need to borrow more, and is not the best way to start your credit history. Once you have successfully managed your new account for some time and built a good history of on-time payments and ideally, a low balance, then consider opening additional accounts.
When Is The Best Time To Apply?
If you have never had a credit card or any type of loan, then you essentially have no credit. To establish a credit history, you will need to start by opening a credit account of some sort, and the sooner you do so, the sooner you will be able to work toward better credit and qualify for other loans. To open a new account, you must be 18 years of age or older, and if you are under 21, then you need to be able to show a source of income as a means to repay the loan. One of the most popular ways to establish credit is by using a secured credit card. Before applying for a secured card, you should have some savings that you can submit as a deposit.
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