The Consumer Financial Protection Bureau records suggest that about 26 Million Americans are credit invisible. This means that the three major credit bureaus do not have any record of their credit history. Now, getting a starter credit card for no credit helps you establish credit and have a credit history.
Your credit report contains your credit history and reflects if you are a risky borrower. If you have a positive credit history, lenders perceive you to be a responsible borrower. This helps to get access to credit options with low interest rates and good repayment terms.
On the other hand, without a credit history or a bad credit history, you will not get approved for credit lines such as loans and credit cards. And without having access to regular loans, you could end up falling prey to high-interest payday loans. All this can keep you entangled in vicious debt cycles.
Why do First-time Users not get a Credit Card easily?
To obtain your first credit card with no credit score, you have to fulfil some criteria.
You should be at least 18 years old and have an income source. Additionally, you need an Individual Taxpayer Identification number, or Social Security Number, to get approved for a credit card.
Moreover, you need to show proof of enrollment if you are applying for student credit cards. Additionally, to get the best first time credit cards with no credit, you have to give a deposit as collateral for accessing credit lines.
In case you do not meet the requirements to obtain your first credit card, you can become an authorized user on your parent’s credit card. By doing so, you can build credit irrespective of your age since there is no age requirement for becoming an authorized user.
How do Secured Credit Cards help you build Credit?
A secured card is the easiest credit card to get for the first time; it helps people who have no credit history to build credit.
Remember your credit report contains a history of all your card payments, which is compiled to determine your credit score. So long as you meet your payment deadlines and remain below the credit limit on the starter credit card for no credit, you can earn a good credit score.
Remember that your payment history constitutes 35% of your FICO credit score and the number of available credit accounts for 30% of it. Among other factors that impact your credit is the duration for which you keep your account open.
However, even after working your way up to a good credit score, you should consider keeping your starter credit card open or upgrading to a traditional credit card. By doing so, you retain the length of your credit history, which makes up for 15% of your credit score. Avoid closing the account since it could have a negative impact.
We will now look at the best secured credit cards for first time users with no credit below:
Best Secured Credit Cards without Credit Check for First Time Users:
Here is a list of the best secured credit cards for first timers with no credit:
- Zolve Azpire Secured Credit Card
- Petal® 2 Visa® Credit Card
- Citi® Secured Mastercard®
- PCB Secured Visa® Credit Card
- Secured Sable ONE Credit Card
We will study the features of these cards in detail below:
1) Zolve Azpire Secured Credit Card
Some features of the Zolve Azpire Secured Credit Card, one of the best first time credit card with no credit, are:
- No annual fees or late fees
- Accessible to people with limited credit
- 0% Annual Interest Rate
- Upto 10% rewards
- Sends reports to the three main credit-reporting bureaus and gives access to free credit score reports
2) Petal® 2 Visa® Credit Card
Some features of the Petal® 2 Visa® Credit Card, a good first credit card with no credit history, include:
- Available to people with limited or no credit, with no security deposit requirements
- Offers 2% to 10% cashback at select merchant stores
- Charges no membership or foreign fees
3) Citi® Secured Mastercard®
The varied features of the Citi® Secured Mastercard®, rated among the best credit card for first time users with no credit, are:
- Comes with low minimum refundable deposit requirements of only $200, which is equal to your credit limit
- Charges zero annual fee and helps to establish credit when used responsibly
- Reports to all the major credit reporting agencies and provides access to free FICO score online
4) PCB Secured Visa® Credit Card
The various features of the PCB Secured Visa® Credit Card, one of the easiest credit card to get for first time, are:
- Requires a minimum collateral deposit of $200, which can go up to $1000
- Helps people with bad or no credit to build credit by reporting payments to three credit-reporting bureaus
- Levies membership fees and offers no rewards
5) Secured Sable ONE Credit Card
Here are the different features of the Secured Sable ONE Credit Card, counted among good credit cards for first timers with no credit:
- Does not levy membership fees and offers rewards
- Provides 1% to 2% cashback on purchases
- Mandates putting up a security deposit
Always check the features of the best student cards if you are studying in college. And if you are a working professional, applying for the Zolve Azpire Secured Credit Card is your best bet. Such cards offer better terms as compared to other credit cards.
Obtaining a good first credit card with no credit history is the best way to establish credit. Only use the credit card responsibly to get maximum rewards. In any case, make sure to pay your bills on time and stay within the given credit limit.
1. Do credit scores and credit reports imply the same meaning?
Ans. Although your credit report and credit score are not the same, they both are important to determine your financial standing.
A credit report details your credit accounts and debts (current and past ones). A credit score, on the other hand, provides lenders with a numerical snapshot for measuring your creditworthiness.
2. What to look for in a starter credit card?
Ans. The best starter credit cards for beginners to credit:
- Do not levy annual fees
- Provide upgrades to better unsecured credit card options if you manage credit responsibly
- Report your payment history to all three main credit-reporting agencies
- Offer rewards
3. How to make the most of my starter credit card?
Ans. If you use your starter card responsibly, you can achieve a good score. For this, you should:
- Pay your monthly credit card bills in full for avoiding interest
- Maintain a low credit limit balance; try to keep it lower than 30%
- Keep your account open
- Review your statement to check for any errors
4. Can I apply for a credit card even without any credit history?
Ans. Yes, people with no credit history can apply for a credit card. The market is flooded with credit cards that are designed for people who are new to credit. For someone with no credit history, you can apply for a credit builder card to build your credit score and then graduate to an unsecured credit card.
5. How long does it take to establish credit?
Ans. The amount of time it takes to build credit history depends on your situation. If you are just starting out, it takes about 3 to 6 months for the credit bureaus to determine your credit score. However, it is advisable to apply for a card that matches your needs. And be responsible by paying your bills on time every month.