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| Applying For A Credit Card With No Credit History |
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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, it
is the way things work in the complicated world of consumer credit. Lenders are
leery about opening accounts for people with no credit history because they
simply have nothing to base your reliability on.
So, if you can't build
a credit history without credit and you can't get credit without a credit
history, just what has a person to 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 of
the options that can eliminate this Catch-22.
Available Credit Options
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 and not just your credit history. Some lenders will look at
your employment history, your housing situation, and how often you have moved.
If this is all on the up and up, they may approve your application. Again, use
this card 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 no giving 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 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 that either matches, or is 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 that you will need to depend upon 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 the bill on time.
Don't go crazy with the spending. It will only cause you problems in the future.
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