Q: I’m an adult but have never had a need to use credit. I paid for my car in full and use cash, checks and debit to pay for everything. Someday I would like to buy a place and know I need to build up my credit score to do that. What are the best unsecured credit cards for people with no credit history such as myself?

A: There are many Americans out there in the exact same situation as you. I would first like to say that you’re actually not in a bad position – having no credit history is like having a blank slate. That is far better than having a blemished record! Because you have an untarnished credit history, it usually is much faster to build up than someone that is trying to repair their credit.

So that brings us to the question, what is the best credit card for people with no credit history? Well, unfortunately your choices will be limited starting out. Here’s what you should expect:

Low starting credit limit: Since you are just starting out, naturally it shouldn’t be surprising that your credit limit will be on the low side – perhaps something around $500 to $700 to start out with if you’re approved for an unsecured card. However if you go with a secured card (that means putting up a security deposit) you can likely get a limit that’s higher – usually a credit line that matches the amount of your security deposit.

Possible annual fee: If you’re getting a secured credit card, some financial institutions may charge you an annual fee. However after you’ve had the card for 9 to 12 months and used it responsibly, then you will have a little bit of a history established and you can try to apply for an unsecured card with no annual fee from a different issuer. So although you might be paying an annual fee, you don’t have to stick with that card forever.

Here’s a couple different ways you can get started:

Getting a card through your bank or credit union
Do you have a longstanding relationship with a bank or credit union? For example, is there a bank that you’ve had a checking and/or savings account with for a while now? If so, this can be a great place to get your first credit card. It’s best to do this in person – walk in and meet with a banker there. Explain your situation and that you have no credit history and want your first credit card.

When going this route, many times your chances for approval of a card (albeit a basic one) will be better, because you have a relationship with that bank. Another benefit is that local banks are likely to charge an exorbitant fee on their secured cards.

Getting a card online geared towards those with no credit history
There are a number of financial institutions that specialize in credit cards for people with no credit history and those that need to repair their credit history. The best companies charge reasonable fees for these types of cards.

However be warned… there are many companies out there that will charge you way too much. One such example is First Premier Bank, who is famous for charging a laundry list of fees (application fees, processing fees, monthly fees, etc). When combined, those might equal up to $100 or higher just during your first year. To add insult to injury, the credit limits they give can be as low as $300.

Which banks are trustworthy for a good deal?
My current favorite is definitely Capital One® which I proudly advertise: