How to Get a Credit Card with No Credit History as a Beginner

Getting your first credit card is an important step in building your credit history. Without any prior credit accounts, you’ll likely need to start with a beginner card aimed at people new to credit.

The good news is there are several solid starter card options to choose from. This post will walk you through what to look for in your first card and provide recommendations for the best cards for beginners.

Why You Need to Build Credit History

Having good credit opens up numerous opportunities and benefits. Lenders view your credit reports and scores to determine the risk of lending to you. The better your credit, the more likely you are to be approved for loans and credit cards with favorable interest rates and terms.

Here are some key reasons to start building your credit:

Easier approval for future credit

Credit cards, auto loans, mortgages, and other lending will be much easier to obtain if you have an established credit history and good scores. Many lenders won’t even consider applicants with no credit history.

Better interest rates

Higher credit scores qualify you for lower interest rates, saving you significant money over the life of loans and credit accounts. People with excellent credit (720+ scores) pay far less in interest costs.

Renting housing

Landlords often check credit reports and may require good credit scores. Building credit history makes it easier to qualify and get approved for an apartment.

Employment offers

Some employers view credit reports as a measure of financial responsibility and may check applicants’ credit as part of background screening.

Insurance rates

Auto and homeowners insurers often use credit-based insurance scores to set premiums. Keeping credit scores in good standing may help lower insurance costs.

Security deposits

Utility companies and cell phone services may require large security deposits for customers with limited credit histories. Good credit can help avoid large deposit requirements.

The sooner you start using credit responsibly, the sooner you’ll reap the benefits of strong credit scores and credit history.

How to Get Started Building Credit

For people new to credit, the easiest first step is getting a starter credit card. Beginner credit cards require little or no credit history for approval. They tend to have lower credit limits and fewer perks compared to cards for people with established credit. But they serve the main purpose of reporting your timely payments to the major credit bureaus.

After about 6 months of on-time payments, you can start applying for better rewards credit cards, auto loans, or other credit products. In a year or two of responsible credit usage, you should graduate to cards for fair or good credit.

The key is using your starter card lightly and paying the monthly bill on time and in full. Racking up big balances and missing payments works against building your credit. Apply the 50/30/20 budget rule to keep credit card spending within your means.

Also consider adding your rent, utility bills, or phone payments to your credit reports. Many companies offer bill payment reporting to help build your payment history. Taking these steps will get your credit started on the right foot while setting positive money habits.

How to Qualify for Beginner Credit Cards

The main qualifications issuers look for in applicants for first-time credit cards are:

Limited credit history – Little or no history of prior credit accounts reported to the credit bureaus. Avoid applying for other new credit at the same time.

Verifiable identity – Full legal name, Social Security number, birth date, and physical address. Some issuers may ask for a copy of your driver’s license.

Sufficient income – Reported monthly or annual income high enough to manage minimum card payments. Some proof of income may be required.

Bank account – An existing checking or savings account in your name, required for issuing your card and making payments. Prepaid debit cards and cash apps often don’t qualify.

As long as you meet the basic requirements above, you should qualify for most beginner cards. Student cards are also a good option for those in college or graduate school.

Here are some tips to boost your chances of approval:

Apply for cards you’re most likely to qualify for based on the criteria above
Check your credit reports and resolve any errors before applying
Keep credit inquiries low by only applying for one card at a time
List all sources of income on your application, including part-time work or grants
Consider having a parent or guardian co-sign the card application if you’re under 21

Best Starter Credit Cards

These credit cards are ideal for those just starting to build a credit history:

Capital One Platinum Secured

No credit history required – can qualify based on income
Minimum $200 security deposit required
Reports to all three credit bureaus
No annual fee

Discover it® Secured

2% cash back on up to $1,000 in combined purchases each quarter
Minimum $200 security deposit
Cash back match after first year
Also great for students

Bank of America Customized Cash Rewards Secured

Earn 3% cash back in the category of your choice
Minimum $200 security deposit
Prequalify online for instant decision

Petal 2 “No Annual Fee” Visa® Credit Card

No annual fee, security deposit or prepaid loads
Up to 1.5% cash back on eligible purchases
Managed entirely by app – great for tech-savvy users

Capital One Platinum Credit Card

No security deposit required
Potential credit line increases over time
24/7 virtual account management
Free access to credit monitoring tools

How Secured Cards Help Build Credit

Secured credit cards require an upfront security deposit that acts as collateral if you were to default on the account. The deposit amount becomes your initial credit limit. Secured cards are one of the easiest starter cards to qualify for since your deposit reduces the issuer’s risk.

Here’s how secured cards build your credit history:

On-time payments – Like any credit card, responsible use, and on-time payments are reported to the credit bureaus each month. This establishes a positive payment history in your credit reports.

Low credit utilization – Charging a small percentage of your overall credit limit and paying it off monthly shows lenders you can manage credit wisely.

Credit mix – Having both revolving (credit cards) and installment accounts (loans) builds your credit mix. Secured cards add a revolving account.

Account longevity – The length of time credit accounts remain open also factors in your credit scores. Keeping your first card open long-term helps.

Credit inquiries – Opening the account adds a credit inquiry, but if approved this generally only causes a small, temporary score drop.

Be sure to check if the card reports to all three major credit bureaus. After about a year of responsible use, you can request to have your security deposit returned, and the account converted to a regular credit card.

Other Credit Builder Options

Secured credit cards offer the strongest benefits for building credit from scratch. However, exploring some of these other options can provide more ways to demonstrate responsible credit habits.

Here are a few other ways to start establishing credit if you can’t qualify for a regular credit card yet:

Become an authorized user – Ask a parent or family member with good credit to add you as a user on their credit card account. Their credit history will be applied to your reports as long as they report authorized user activity.

Retail credit card – Department store cards tend to have lower approval requirements and can help build initial credit history. Just be cautious of high APRs.

Credit builder loan – These loans place the amount borrowed into a savings account as collateral while reporting monthly payments to the credit bureaus. The money is returned after the loan is paid off.

Student credit card – Cards offered by credit unions and banks to students enrolled in two- or four-year colleges are easier to qualify for.
Prepaid debit card – While not technically credit, some prepaid cards allow you to graduate to a traditional credit card after 6-12 months of on-time payments.

Other Tips for Credit Beginners

Here are a few other important tips to keep in mind as you embark on building your first credit history:

Check your credit reports – Get your free annual credit reports from AnnualCreditReport.com and dispute any errors you find. Mistakes can significantly hurt your scores.

Stay under 30% utilization – Keep credit card balances low relative to your credit limits. High balances hurt scores.

Pay on time – Not making at least minimum payments severely damaged credit. Set up autopay if that helps avoid missed payments.

Limit credit inquiries – Each application causes a hard inquiry that can lower scores temporarily. Only apply for the credit you need.

Monitor your scores – Tracking your credit scores helps you see progress. Many cards and apps offer free access to your latest scores.

Give it time – Be patient and let your credit history age. Credit scores improve based on years of responsible usage, not months.

While it may take a little extra effort to qualify for your first credit card, taking that important first step now will set you up for financial success down the road. Be smart about credit from the very start. Your future self will thank you!

Conclusion

Getting approved for your first credit card with no prior credit history is very achievable. Starter and student cards aimed at first-time borrowers make it easier than ever to establish and build credit. Applying for a secured card backed by a deposit allows almost anyone to qualify and begin demonstrating responsible usage.

Use your beginner card lightly but regularly, always pay your statement balances on time and in full, and keep an eye on your credit reports and scores. With a little patience and diligence, you’ll graduate with premium rewards cards and other credit products in no time. Take control of your financial trajectory by starting to build your credit history today.