How to Apply for a Credit Card with No Credit

A credit card is a payment tool that you can use to borrow from your issuer. There are two main categories of credit cards. We have unsecured and secured ones. You will know the difference between the two later on, so just stick around. In most cases, you require a credit score to apply for one. However, today you will know how to apply for a credit card with no credit.

Unlike loans, credit cards allow you to borrow in a revolving manner from your issuer. That means you can borrow today, and then if tomorrow you still need money, you can borrow again. In short, they allow you to borrow repeatedly. Every issuer usually gives you a line of credit with a credit limit which is the highest amount of money you can borrow from the card issuer. Once exhausted, you cannot borrow any more until you clear your debt.

Application of a credit card is usually a straightforward process as long as you have all the requirements. Some issuers require you to apply for your credit card online, while others require you to visit their physical branches. Financial companies allow you to choose whether to apply online or at a physical branch. However, an online application is very convenient since you can complete the process in the comfort of your couch.

How to get a credit card

As I have mentioned above, you must apply to get one. When you apply, your bank or credit union contacts a hard inquiry from the credit bureaus. The hard inquiry helps to determine your creditworthiness. Of course, no one would risk giving you a credit card without knowing your ability to repay your debt.

When contacting hard inquiries, the issuers usually check your credit scores. You may have bad, fair, good, or excellent credit scores. There are cards for various credit scores, and once your issuer determines the number of scores you have, they can then go ahead and see the card that suits you. But which credit card can I get with bad credit? You will discover about them shortly so just stay around.

You can also check your scores from the credit bureaus or your bank if you have ever taken a loan earlier. After that, you can hover around various banks and see the card that suits you. Bad scores credit cards have low limits and high-interest rates due to the high risk the borrower poses to the issuer.

On the other hand, excellent scores give you credit cards with high borrowing limits and low-interest rates. You are able to enjoy repaying debts with very low interest and that way, you are able to save substantial amounts of money.

The better your scores, the better the terms and vice versa. Some issuers have guaranteed approval unsecured credit cards for bad credit. Therefore, it does not matter the scores you have.

When you receive your card, you must activate it to start using. You can activate it online or at your issuer’s physical branch. When activating your card, you have to provide the card number, the expiry date, and the security code. Once active, you can then start transacting.

How does a credit card work?

how to apply for a credit card with no credit

You can start using it for various transactions when you get it, just as you can use a debit or prepaid card. The card allows you to perform various kinds of transactions. First of all, you can buy goods and services online and at physical stores. When purchasing commodities online, you need to provide the card number, the CVV, and the card’s expiry date when checking out.

At physical stores, you can swipe your it to pay at the register. The cashier can also enter the card details in their system to deduct the correct amount. If your card has notifications, you can receive them in your phone number or email address about the transaction details.

Also, credit cards allow one to withdraw money at ATM points. You just insert it at the correct slot, enter your PIN, and withdraw the necessary amount. Again, you can withdraw money to a bank account of your choice. However, withdrawing money from your credit card is very costly due to the high fees accompanying cash advances.

Credit cards allow you to send money at ATMs or even online using banking apps. You can send funds to recipients within the same institution or of a different one. You need to know that when using a credit card, the line of credit reduces with expenditure, and so does the limit.

If you have a limit of, for example, $1000, then you use $100 for your transaction, then your limit now falls to $900. It keeps on declining until the borrowing cycle is over, then you repay your debts to start a new borrowing cycle. Your limit at the start of the new borrowing cycle is $1000. You can even get a higher limit for the next borrowing period depending on your card usage.

Remember that you have to repay your card’s debt every month. If you do not pay, your ssuer reports that to the bureaus. Remember that everything you do with your card, including the spending reaches the credit bureaus.

How do I pay a credit card bill?

Once you take a credit card, you should repay all that you spend with it. You only need to deposit the used amount together with interest in your account, and you are good to go. But can you pay a credit card bill with another credit card? The answer to this query is yes. You can use another credit card to repay the debts of another one. That is called balance transfer and happens in a situation where you have seen a good card with better terms than the current one.

When performing a balance transfer, you first apply for the new card, then provide the current card details to the new issuer, who then pays off the debt and transfer it to the new one. Depending on the new card’s terms and conditions, you can pay your debt at a 0% APR or a low rate. Credit cards that you use for balance transfers have a 0% introductory APR that goes for several months or years. To benefit from the offer, you should pay during the timeline given, and once finished, you can then start borrowing again.

How to apply for a credit card with no credit

I have talked about card issuers performing hard inquiries to determine your creditworthiness to allow you to borrow. Does that mean that you cannot get a card without credit scores? Absolutely not! You can get a one for your transactions even when you have never applied for any loan before.

Someone who have just finished college is fresh and maybe starting financial life fresh. When starting this article, mentioned that we have secured and unsecured credit cards. The unsecured are the ones that require FICO scores. However, the secured ones do not require any scores. 

One can build credit with a secured credit card since the issuers report your usage to the credit bureaus. To get the secured one you have to deposit some money to act as security. The security deposit is important in case you decided to default the debt payments. That way, financial companies can avoid collapsing.

Remember that you have no credit history, and no one knows whether you will repay your debt or not. Most secured credit cards allow you to borrow slightly below your deposit amount to make sure that if you do not repay your debt, you can recover their funds together with an interest rate with ease. However, very few find themselves in such scenario since this is s decision to improve your credit worthiness.

Since the secured are mainly used to build credit, it means that you can advance to the unsecured ones once you build substantial scores. Your deposit then becomes available for use in your account. Secured credit cards are also suitable if you have bad scores.

How long can you take to receive a credit card?

Applying for a credit card is not a lengthy process since most issuers contact the eligibility test within minutes. That means you can get yours immediately, although it might be virtual as you wait for the plastic card, i.e., if you apply online. At a physical branch, you can get it immediately. You can get any credit card for bad credit instant approval no deposit if you apply for a card that accepts any credit scores. By the way, the card issuer might not even check your creditworthiness. 

Bottom line

A credit card allows one to borrow funds from your issuer in a revolving manner. Once you repay your debt, you then proceed to borrow again. There are two main types of credit cards. We have secured and unsecured ones. One can apply for any of them either online or at a physical branch. Secured cards are suitable for people with bad scores and those with no borrowing history.