Get a Credit Card
When You Have No Credit History.
If you've never used credit, getting your first credit card can be tough.
Even if you have taken out car loans, mortgages, and other loans and paid
them on time, you may get turned down when you try to get your first credit
How to Get Your First Credit Card
- Get a Secured Credit Card.
The fastest way to establish credit for the first time is to get a secured
card. With a secured card, you put a security deposit of $250 to $500
into a savings account with a bank that issues the card. You get a MasterCard
or Visa that looks and works just like any other bankcard. Banks that
offer secured cards are usually very willing to give a card to people
who don't have a credit history-after all, they have your deposit if
you don't pay the bills! Since your goal is to rebuild your credit,
you'll want to choose a secured card that will report your payments
to the three major credit bureaus. Not all issuers report to all three
bureaus, so be sure to ask before you apply!
You may want to consider the Union Secured Card issued by Household
Bank (Nevada, NA). You deposit at least $250 in an FDIC-insured account
with Household. You get a Union Credit Card that can be used anywhere
MasterCard is accepted. Your credit line is equal to your deposit, so
if you deposit $250, your credit line is $250. Your payments will be
reported to all three major credit bureaus, helping you build a better
credit rating! If you pay your bills on time for 24 months, you'll automatically
be eligible for a regular, unsecured Union Credit Card that doesn't
require a savings deposit.
Go to Secured
Credit Card page to select your card.
Co-sign a credit card.
If a spouse, relative or good friend who has a major credit card is
willing, ask them to add you to their account as a co-signer. To do
this, they'll have to call their card issuer and ask for instructions.
Usually, you will have to sign an application. Once you are on the account,
it will be listed on your credit report where it can serve as an excellent
credit reference (but only if the bills are paid on time)!
Make sure you are added onto the account as a co-signer or joint applicant.
That means you're legally liable for the bills if the other person doesn't
pay them. If you're added to the account as an authorized user, that
means you're authorized to use the account, but you're generally not
liable for the bills. Authorized user status isn't as strong a credit
- Get a student credit card.
If you're enrolled in a college or university, chances are you'll be
swamped with offers for credit cards. In most cases, you won't have
to have any credit experience to get one (or several). If you're offered
a major credit card this way, take it. It's an easy way to establish
Go to Student
Credit Card page to select your card.
- Get a prepaid Visa or MasterCard
Pre-paid Visa or MasterCards are prepaid reloadable cards that can
be used everywhere Visa or MasterCard is accepted. You get approved
without any credit checks. Everybody is accepted if you are above legal
age. Because it is a prepaid card, spending limits are set by the amount
of money you load onto the card. When you make a purchase with the prepaid
credit card, the purchase amount is deducted from the card balance.
You can add more money on a regular basis or whenever the money runs
low. You can enjoy all the benefit of the regular credit cards. Prepaid
cards, however, do not help establish your credit.
Go to Prepaid
credit card page to select your card.
- Get a department store credit card.
Try applying for a retail card with one of the large, well-known department
store chains. For people trying to get their first card, retail cards
are usually easier to qualify for than major credit cards, as long as
you have a steady job and income that can be verified. By making a few
purchases and paying the bills on time for at least a year, you'll build
a credit history that can help you qualify for other cards and loans.
Before you apply for any credit card, whether it's from a credit union,
department store or bank, ask someone in the customer service or credit
department if your payments will be reported every month to the credit
bureaus. When you're trying to establish credit, you don't want to waste
your time with cards that won't show up on your credit report.
- First-time cardholders with limited or no credit history rarely qualify
for low interest rates. But you should take the card anyway. However,
you can renegotiate the rate after six months or so. If you pay your
credit card bill in full each month, the interest rate won't matter.
- Don't shop for several cards at the same time. That mistake may sabotage
your chances. Any time you apply for a card, you get the credit process
started. Card issuers checking your credit report will see the other
inquiries and assume the worst -- that you'll get the cards and use
the entire credit limit. If issuers think you have too many cards, they'll
be less confident that you'll be able to pay your debts.
Go to Secured
Credit Card page to select your secured card.