For many people, a credit card is more than just a piece of plastic—it is a means of accessing financial possibilities. Credit cards come with a number of benefits and rewards, giving flexibility in managing expenses and acting as a safety net in case of emergencies. There's a catch, though. You will need a perfect credit history in order to take advantage of these benefits and establish a solid financial profile. However, what happens if you're just getting started and have no credit history?
Fortunately, there are credit cards made especially for people with no credit histories, so don't worry! In this comprehensive guide, we will explore how beginners can choose the best credit card.
What is a good Credit Card for people with No Credit History?
The Petal® 2 Visa Credit Card might be an excellent option for people who have recently started out to build credit while earning cashback rewards. With just 12 regular monthly payments, you can increase your cashback to 1.5% on eligible purchases. This card also offers 1% cash back on eligible purchases immediately. It has no annual fees and is intended for people with fair, good, or no credit. Furthermore, there is no need for a security deposit.
Before going ahead, clear the basics of credit cards by reading the following.
Credit cards that are tailored for individuals with no credit history serve as invaluable tools for establishing a strong credit foundation. Bright Money provides you with individualized financial guidance to assist you in managing your credit as well as making well-informed decisions regarding paying off debt, investments, and savings.
Best Credit Cards for people with No Credit History
You may now choose the ideal credit card by carefully weighing these aspects. This will guarantee that your credit journey gets off to a good start and provide a strong foundation for your financial future. Why not use Bright Money to boost your financial strategy while you're on your credit card journey?
1. Petal® 2 “Cash Back, No Fees” Visa® Credit Card
Petal 2 is an ideal choice for those with no credit history, offering cash-back rewards and no extra fees. It takes into account various factors for approval and provides a credit limit of at least $300.
Intro APR: None
Regular APR: 18.24% - 32.24% variable
Annual fee: $0
- Rewards like 1% cash back on eligible purchases right away, up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments, and 2-10% cash back at select merchants
- Welcome bonus: None
- Balance transfer fee: N/A
- Foreign transaction fee: None
2. Capital One Quicksilver Student Cash Rewards Credit Card
This card is perfect for students looking to build credit. It not only offers a generous cashback program but also provides a $50 Cash Back bonus when you spend $100 in the first three months.
Intro Offer: Earn $50 Cash Back when you spend $100 in the first three months
Regular APR: 19.99% - 29.99% (Variable)
Annual fee: $0
3. OpenSky® Secured Visa® Credit Card- Best for no credit check
OpenSky® Secured Visa® Credit Card is a great option for those who want to skip the credit check process. It doesn't require a bank account and provides the opportunity to increase your credit line after six months of on-time payments.
Intro APR: N/A
Regular APR: 25.64% (Variable)
Annual fee: $35
Security deposit – minimum $200
4. U.S. Bank Cash+® Visa® Secured Card- Best for cashback
Get started with BrightMoney today to embark on a journey towards lasting financial success.
U.S. Bank Cash+ Visa Secured Card stands out with its cashback rewards on various purchases. It allows you to earn rewards while building your credit, making it an attractive option for those with a bad or poor credit history.
Intro APR: N/A
Regular APR: High variable
Annual fee: $0
Earning rewards with a secured credit card isn’t common. However, with the U.S. Bank Cash+® Visa® Secured card, you can earn cash back on the following purchases:
- 5% cash back on your first $2,000 in combined eligible purchases each quarter in two categories you choose
- 5% cash back on prepaid air, hotels, and car reservations booked through the U.S. Bank Reward Travel Center
- 2% cash back on eligible purchases in your choice of one everyday category (gas stations, EV charging stations, grocery stores, and restaurants)
- 1% cashback on all other eligible purchases
5. First Access Visa® Credit Card - Great for rebuilding credit
Ideal for rebuilding credit, First Access Visa® Credit Card doesn't require a security deposit. It's accessible for individuals with no credit or those with negative marks on their credit history. However, it has a relatively higher APR and an annual fee.
Intro APR: N/A
Regular APR: 35.99%
Annual fee: $75.00 for the first year, after that, $48.00 annually
- A Credit limit of $225
How can you use Credit Cards to help Build Credit?
Here's a comprehensive guide on how you can use your credit card to maximize your benefits.
Reporting to Credit Bureaus
Ensuring that the credit card issuer reports your payment history to all three main credit bureaus—Equifax, Experian, and TransUnion—is one of the most important factors to consider to establishing credit. This way, you can lay the groundwork for a solid credit history by having appropriate credit management documented in your credit report.
No annual fees
Saving money is essential while starting your credit path, so choose a credit card that has low or no yearly charges. Thankfully, a lot of credit cards intended for those with no credit history have this feature, which helps to minimize the initial expenses associated with establishing credit.
Secured vs. Unsecured
There are two main types of credit cards: secured and unsecured. A security deposit is necessary for secured credit cards, and it also sets your credit limit. For people who might not be eligible for an unsecured card just yet, they are a great option. Conversely, unsecured credit cards don't require a security deposit and are accessible to people with better credit scores.
In addition to paying off your credit card debt in full every month to avoid incurring interest, you should look for a credit card with a lower annual percentage rate (APR). If you ever need to carry a balance for whatever reason, this can be helpful.
Credit Building features
Some credit cards intended for people without credit histories also come with extra features that enable credit building to begin sooner. One tool that enables you to keep a close eye on your credit report and score is credit monitoring. You can also ask for a credit limit increase once you've demonstrated a consistent payment schedule. This can help you become even more creditworthy.
In the context of personal finance, it is critical to choose a credit card that is suitable for people without a credit history. It's the first stage of building a solid financial foundation, and the credit cards mentioned can be a helpful tool in this endeavor. Whether you are a student attempting to avoid the annoyances of a credit check or are in the process of repairing your credit, there exists a credit card for you.
As you progress toward financial independence and responsibility, consider adding BrightMoney to your toolkit. It can offer helpful advice on debt repayment, wise investment choices, and efficient saving. Bright Money serves as a compass, guiding you toward sound financial decisions.
Frequently Asked Questions (FAQs)
- Is No Credit the Same as Bad Credit?
No, having terrible credit is not the same as having no credit. While bad credit indicates a history of poor credit management, such as late payments, defaults, or bankruptcy, having no credit simply indicates that you haven't yet established a credit history. Although getting credit may be difficult in both cases, improving each calls for a different approach.
- Can I get a credit card without a job and no credit history?
It can be challenging to obtain a credit card without a credit history or a job. In order to make sure you can pay back your credit card debt, lenders usually will want to see proof of your income. But certain credit cards—such as secured cards—might not necessitate regular work as long as you have a source of income.
- Which Credit Card Is the Easiest to Apply for Without Credit?
A secured credit card is usually the simplest to obtain without credit. A security deposit is all that is needed for secured cards, and it acts as collateral for the credit limit. This lowers the issuer's risk and increases their accessibility to people without credit histories.
- Why Can't I Get a Credit Card with No Credit?
Rejections of credit cards for people with no credit histories can result from a number of reasons. There could be mistakes on your credit report, inadequate income, or applying for cards that demand a higher credit score than you currently have. Review your credit report, establish credit with a secured card if needed, and make sure that you meet the criteria for the card you're applying for.