How To Get A Credit Card With No Credit History

Oddly enough, not only will bad credit work against you when applying for a loan or a credit card, but no credit will, too. Even though this doesn't seem fair, its the way things work in the complicated world of consumer credit. Lenders are leery about opening accounts for people with no credit history, simply because they have nothing by which to judge your reliability.

If you can't build a credit history without credit, and you can't get credit without a credit history, what can you do? It's nearly impossible to rent a car, stay in a hotel, or shop online without a credit card. So let's explore a few ways to work around this "Catch-22."

Getting Started in Credit

Although many of the major credit card companies won't give you a card without a credit history, some smaller ones, like department stores, will. Find a department store that will issue you a card and apply for it. You can try getting a gas station card also. Either way, use your card but be sure to make all payments on time. Your goal is to build a good credit history, not just get a credit card.

Find a credit card company that will review your overall financial situation, not just your credit history. Some lenders will look at your employment history, your housing situation, and how often you have moved. If all this meets their standards, they may approve your application. Again, once you get the card, use it wisely.

Credit Unions

If you are a credit union member, or are eligible for membership, see what their card issuing terms are. Although they are not handing out cards with their eyes closed, they will often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. So, it's well worth checking to find out if there's one in your area.

Secured Credit Cards

Secured credit cards are offered by lenders who will give you a line of credit either equal to, or slightly higher than, a cash deposit that you give them to hold. As your experience with the card grows, these lenders will often raise your limit without requiring you to increase your deposit. Eventually, you can use your experience with this lender to apply for cards that are not secured.

Student Credit Cards

If you are a student, then you'll be best off with a student credit card. Student credit cards can be a great way of building the credit history you will need after graduation. The important thing here is to remember to use that opportunity wisely. Many banks will issue college students a credit card, especially banks that are located in college or university cities and towns.

When you do manage to get a credit card, remember that you are establishing a credit history. Show that you are a good financial risk by paying your bills on time. Don't go crazy with spending. It will certainly come back to haunt you in the future.