Q: I applied for a card because I want to build credit but was denied. How do I get a credit card if I have no credit history?
A: It’s the ultimate catch-22, right? You want a card to build credit, but they want you to have credit before you can get one! So how do you breakthrough and actually get approved? Well here are five tips to help you in 2013…
Tip #1: Getting a card early on is sometimes easier
There are many people whom are critical of college students and young adults getting credit cards (and rightly so) but there is a silver lining; getting a card at this age is sometimes easier than waiting ‘til later.
Student credit cards are basically designed for those with little to no credit history. So if you are in college these will most likely offer the greatest chance of approval. If you’re not a student but still in this age range, you still may have luck applying for a basic credit card (just don’t expect anything fancy right off the bat).
On the flip side, having a card so early on can lead to disaster if it’s not managed properly. If you think there’s a chance of that happening, skip ahead to the last tip about secured cards.
Tip #2: Check which offers you are matched for
For your first course of action, I would recommend trying out this nifty tool to see if you are matched for any offers:
Tip #3: Consider starting with retail store cards
Almost every clothing store out there offers their own in-house credit card. Some also offer cards through Visa or MasterCard but I’m not talking about those. Rather, I am referring to cards which can only be used at their stores – these typically have credit requirements which are much looser than bank cards.
However I should point out that many store-only cards will still be hard to get with no credit history. So which ones should you shoot for? Well, try and put yourself in the mindset of an 18 to 20 year old. The stores they frequently shop at will probably be the easiest to get approved for. Think places like Hollister, Abercrombie, Old Navy, etc.
Tip #4: Gas station cards are usually easy to get
Again, I’m not referring to those that are issued through Visa/MasterCard. The ones you will want to look into are the “personal” version cards, which can only be used at that specific brand of gas stations. Almost all of the major chains offer them and they are geared towards those building (or re-building) credit.
Tip #5: Apply with a cosigner
One way to get a credit card if you have no credit history is to get a co-signer. Although this is an easy way to go, it can also destroy a relationship. Make sure you read this post about getting a credit card with a cosigner before you go through with it.
The almost foolproof way = get approved for a secured card!
I highly recommend you try this strategy. A secured card works like this: You put up a security deposit (say $500) and that amount then becomes the credit limit on the card. Because the available credit is 100% secured by your security deposit, practically any American that’s 18+ can get one.
The drawbacks of these cards is that you can expect to pay fees with them and you will have some money tied up in the security deposit (although that amount is fully refundable later on when you close the account or are eligible for an upgrade to unsecured status). To learn more about these you can check out this page on secured credit cards for building credit.
Now you know a few different ways how to get a credit card with no credit. Obviously none of these are the ideal solution, but once you get a few lines of credit and build your history in a responsibly way, before you know it you will be able to qualify for better credit cards.