How to Get Approved for a Credit Card with No Credit

A credit card is one of the most helpful payment cards in the banking sector. Others include debit and prepaid cards. The card allows you to borrow money from your card issuer in a revolving manner. That means you have to pay your dues every month. However, you can still get a credit card if you do not have credit scores. You will learn more about how to get approved for a credit card with no credit.

Credit card issuers usually give credit limits for a credit card. Once you get the card, you usually get your limit depending on your credit scores and your credit history. That is usually for unsecured credit cards. If you have a bad credit history, that means you have bad credit scores. High credit scores attract credit cards with high limits and low-interest rates on the borrowed amounts.

You can get credit cards from banks, credit unions, and from some mobile wallets. Most financial institutions allow you to apply online and get it at your physical location, while others require you to visit the nearest branch to carry out the registration process. Online application is more convenient since it saves time for other activities instead of queuing up in a bank or credit union office.

What are the factors to check when applying for a credit card?

You can’t just wake up and apply for any credit card since you may not get what fits your needs and financial status. There are various factors to observe when applying for a credit card. They include the following.

i) Credit score requirement

Yes, you have seen a card, and it is very attractive in terms of its offers. But does it match your credit scores? That means you should know your credit scores first before proceeding to apply for any credit card. If you have a bad credit score, you should look for cards with bad credit scores and vice versa.

ii) Fees

Payment cards come with some fees. Some cards have many fees, while others charge a few fees. You should look for monthly fees, annual fees, inactivity fees, and so on. The more the fees, the more the card is likely going to drain you financially. 

iii) Credit limit

Different card issuers have different credit limits for the same credit scores. It is wise to shop around and see credit cards with high credit limits. The higher the limit, the higher you can spend within the recommended credit utilization ratio.

iv) Interest rates

Credit card lines of credit are loans and are to be paid at the end of every month. What you have to do is to check the interest on the amount spent. Interest refers to the extra amount of money that you return with the borrowed amount. Go for the lowest interest rate to be on the safe side.

v) Online or at a physical branch application

As mentioned above, some credit card issuers allow you to apply online, while others only want you to apply at their branch. Most payment card issuers have gone digital, and you can easily get your credit card online and receive it in your place. Online card application is the best since it is convenient and saves time.

vi) Rewards

Various credit cards offer various rewards such as cashback, points, and miles. It is good to get a credit card with rewards to get a slight cushioning when you spend a certain amount of money. You can redeem the rewards at various places for goods and services.

Where do I get my credit report and scores?

How to Get Approved for a Credit Card with No Credit

You might be hearing about credit scores and wondering where you can get yours. Three main credit bureaus have the mandate to calculate credit scores using the FICO model depending on your line of credit usage. They include TransUnion, Equifax, and Experian. All the three credit bureaus calculate credit scores independently.

But where do they get the information about borrowers? Well, you need to understand that if you get a loan or a credit card from a particular financial institution, then the issuer reports your repayment pattern to all three credit bureaus. All information about your previous credit card utilization and loan payment from various financial institutions is usually available with credit bureaus.

Now back to getting your credit scores and the report. If you want to get your credit scores from any credit bureaus, you must purchase them at a specific price. You have to create an account with the concerned credit bureau and then purchase them. You can also get your credit scores for free from Credit Karma or your credit card issuer.

You do not have to pay any amount to get a credit report from the three credit bureaus. Every American citizen is entitled to a free credit report from each of the three credit bureaus once per year. You can pick the three reports at once and compare them or collect them at different times of the year to stay updated on your credit stand.

What do credit scores look like?

Credit bureaus present credit scores in numbers. The scores range from 300-850, where 300 represents the worst credit scores while 850 represents the best. You get a low credit limit with a high-interest rate because of the high risk of low credit scores.

High credit scores attract a larger credit limit with low interest on the amount borrowed. The table below shows various credit score groupings according to FICO guidelines.

FICO Scores Category
800-850 Exceptional
601–660 Very Good
670-739 Good
580-669 Fair
300-579 Very poor

The credit score calculation is based on various pieces of information, which include amounts owed (30%), payment history (35%), length of credit history (15%), credit mix (10%), and new credit (10%). You can see the various percentages that each piece of information contains. That helps you to see the areas you should be very careful with.

How to get approved for a credit card with no credit

All along, I have discussed credit scores and how they can affect the kind of credit you can get. However, the good news is, you can still get a credit card without any credit history. Are you wondering how? Well, some financial institutions issue secured credit cards. These are credit cards that do not require you to have any credit history whatsoever. You only need to deposit some money during the credit card application, and you are good to go.

To get approval for a secured credit card, you have to first apply for the secured credit card from the financial company of your choice, and then make a deposit. Remember the factors to consider that I discussed there above. That means you will get a checking account with the concerned institution first. Next, you will need to follow the card application process and finally receive it at your physical address for activation.

Whether applying online or at a physical branch, you have to pay the deposit first to get the card. After activating the card, you can start using it. Some financial institutions allow you a credit limit that equals the deposited amount, while others allow you to borrow slightly lower amount than your deposit. When you show good repayment patterns, you can graduate to get an unsecured credit card that matches your current credit scores.

Secured credit cards are mainly helpful when it comes to building your credit scores. They are suitable for people with no credit history at all or those who have bad credit scores.

How are credit cards different from debit cards?

There are various ways credit cards differ from debit cards. The following are the main differences between credit and debit cards.

  • Credit cards require credit scores or deposits, while you can get a debit card without any of the two.
  • Credit cards allow you to borrow from your issuer, while debit cards allow you to use the available balance.
  • Credit cards have a spending limit, while debit cards allow you to spend as much as you want as long as your account has a sufficient balance.
  • Credit card issuers report your card usage to the credit bureaus while debit card issuers do not.

Which credit cards can I get with bad credit?

As I mentioned earlier, poor credit scores still qualify you for a credit card. But what credit card can I get with bad credit? There are various credit cards, both secured and unsecured, that you can get if you have bad credit. The following are some of the credit cards you can apply for.

  • Capital One Platinum Secured Credit Card
  • Discover it® Secured Credit Card
  • Credit One Bank® Platinum Visa® for Rebuilding Credit
  • Bank of America® Customized Cash Rewards Secured Credit Card
  • Navy FCU nRewards® Secured Credit Card
  • Petal® 1 Visa® Credit Card
  • BankAmericard® Secured credit card

Bottom line

A credit card allows you to borrow money from the card issuer. There are credit cards for bad credit and those for good credit. You can apply for a secured credit card if you do not have a credit history and deposit some money in your credit card account. Secured credit cards are the best for building a credit history since they charge a low interest rate on the amount borrowed.