- Personal Finance
get credt card with no credit
build a positive credit history
Are you looking for ways on how you can get a credit card without credit? There is no doubt that every person needs a credit whether good or bad to transact conveniently. You will need credit when carrying out transactions such as purchasing a cell phone or even renting an apartment among other ordinary transactions. The current harsh economy has made individuals more reliant on credit cards to pay their daily bills and making purchases
However, it is usually a headache for a person who does have a credit history or have never held a credit card before to get a proved for a new credit card. Some of the individuals who usually do not have credit history include immigrants from cash-based economy and students. Although their financial records may seem to be clean, lack of credit history is always viewed to be as bad as having a bad credit history. With a bad credit history, you are in a better position than lack of any credit history since with time you can restore bad credit. Without credit, lending institutions cannot be able to calculate your credit score or your ability to pay back the money advanced to you.
Many individuals get their first credit card once they join college whereas others wait until they get their first job. No matter at which time you intend to get a credit card if you do not have a credit history this can be a headache. However, there are several ways that you can use to obtain your first credit card if you have no credit history which includes:
Establishing a line of credit with a prepaid card
A prepaid credit card is similar to a debit card but can be very helpful in building a credit score. You are required to load a certain amount of money which becomes your credit limit. For instance, if you load $1000, then your credit limit will be $1000. After using the entire funds loaded on your card, you will have to load more money to continue transacting using the card. It is highly recommended that you ensure that your credit is recorded when transacting using the prepaid credit card. It is easy to obtain a prepaid card, but most of them do not help in building a credit score. The cards that help in building credit score may sometimes be more expensive to acquire and may also have extra fees attached such as activation fee, but they are highly recommended for they help in building credit score as time goes by.
It is also advisable that you confirm when getting your prepaid credit card whether your charges will be reported to a credit agency. Even if you are buying your card over the internet, you should call the institutions support team first to confirm all the details about the card you intend to buy. This will help you to ensure that you have purchased the right card. After getting your card make sure that you use it responsibly. Avoid misusing the funds so that you can build a good credit score that will help you acquire a real credit card in the near future.
Get a secured credit card
A secured credit card is similar to prepaid credit card whereby as a card holder you are required to load some funds on your card ranging from $200 to $5000 which is then considered to be your credit limit. However, unlike a prepaid card where your initial deposit become your total credit limit, with a secured credit card, your initial deposit becomes your monthly credit limit. This means that if you load $1000 on your card, you will have a $1000 purchasing power every month.
There are many lending institutions which offer secured credit cards, therefore; if your bank does not offer a secured credit card try obtaining it from other lending institutions. However, before getting a secured credit card from any lending institution, check their policies and charges. There are some institutions that charge unnecessary fees on secured credit card making them very expensive. After getting your card, use it responsibly since over time you can change your card into a real credit card.
Apply for a store credit card
Getting a store credit card is much easier than getting any other credit card. However, store credit cards are a bit expensive since they tend to change higher interest rates. If you are looking for an effective a way of building a good credit history to avoid rejection when applying for the real credit card, then a store credit card is the way to go. To build a good credit history with a credit card store you need to have an in-depth knowledge of how credit works. Always pay your credit on time and also try to maintain a low debt to credit ratio. It is good to ensure that you maintain the amount you owe 20% below your total credit limit. Most individuals make mistakes by over spending using their store credits card which as results ruins their credit score.
Capitalize on student credit option
Students are usually in a better position of getting a credit card than any other regular person who has no credit history. If you are a student, you can take advantage of the credit cards that are offered specifically for students. Lenders have come up with special offers for students to help them access credit. You can visit your local bank and inquire whether they offer credit cards for students. Although due to change in federal lending laws in 2010 which made access to student credit card more difficult there are still financial institutions that offer credit cards for students. However, be aware that there are some non-established banks that offer credit cards with ridiculous interest rates to students with an intention to exploit them since they are not well conversant with credit card policies. Therefore, it is highly recommended that you get your student credit card from established banks that have already gained a high reputation.
Apply for a charged card
A charged card is a credit card that allows you to transact with it, but you will have to pay the charged amount at the end of each month. You cannot carry forward the charged balance over the next months; otherwise, you would ruin your credit history. Using a charged credit card is an effective way of building a positive credit score which will help you get a real credit easily.
Get a cosigner
A cosigner agreement involves a person who has an incredible credit history putting his or her credit on the line for an individual who has no credit history. A cosigner agreement can play a significant role in helping a person with no credit history to acquire a real credit card. This form of the agreement allows a person with no credit to use another person’s credit line as he or she builds his or her credit score. Getting a cosigner is usually very hard since the person who can allow you to use his or her credit line have to trust you completely. Many individuals are reluctant in engaging in this form of agreement since they fear that their credit score might be ruined if the entrusted person is irresponsible.
Getting a real credit card with no credit may seem to be almost impossible but the above credit card options can help you build a good credit score that will allow you to qualify for a real credit card. It is also good to always maintain a positive score so that you can increase you credit limit which will allow you to pay your bill and make purchases comfortably.