It isn’t unusual for parent’s to refuse to let their child have their own credit card when they are in high school, and sometimes this continues into college. The problem is that when the student is finally done with school and starts thinking about things like getting their own car, apartment, and other things that cost money, they often learn that sometimes having no credit is even worse than having bad credit. At least when a person has bad credit they at least have a credit history, which is something they can build on, when a person has no credit history at all, lenders seem to think that there is something fundamentally wrong and refuse to take a chance on them. There are credit cards for people with no credit history; the trick is knowing where to find them.
If you are someone who has no credit, it is really important that you sit down and try to look into your future. Although it is impossible to guess everything your future holds, you should have an idea about what your financial situation is going to be six months to a year down the road. Are you planning on purchasing a new car or applying for a mortgage? Do you plan on going on an exotic trip? If you are hoping to accomplish any of these things in the near future, you need to start looking for credit cards for people with no credit history right away. Finding the perfect card for you can take time, and once you have the card using it to create a credit history is going to take even more time. The sooner you start looking for a credit card, the more likely you will be to qualify for the financial backing later on.
Do Your Homework
Since finding cards for people with no credit history can be difficult, as soon as someone does find one, they immediately accept it without thoroughly reading through the contract. Before filling out a contract, it is extremely important that you know exactly how much the interest rate is going to be, if there are any annual fees, and also if there is a start-up fee. When you have this information you should use it while looking at other credit companies with similar plans. Just because you don’t have a credit history, doesn’t mean you should settle for an inferior credit card.
Types of Credit Cards You Should Consider
When you are looking for credit cards for people with no credit history, there are some cards that are going to be better suited to you than others. The first thing to look at is companies that won’t look at a credit report when they consider your application. By not running a credit report, they won’t know that you have no credit history. Don’t assume that just because the company won’t be looking into your credit history, that you will be handed a credit card. These companies have guidelines that they use when issuing credit cards. Most of these lenders insist that you can prove that you have steady employment and it isn’t unusual for a large deposit. The other thing you have to consider is that since the lender knows that the average applicant has a less than stellar credit history, the interest rates for guaranteed approval cards is usually quite steep.
In the past, the best credit cards for people with no credit history were the cards issued by department stores. Since the card could only be used in the department store, the interest rates for these cards is usually lower than other introductory rates. Now a days, department store cards are still an excellent way to create a credit history, but they aren’t quite as easy to come by anymore. Now most department stores can scan an applicant’s credit history and either approve or deny them based on what the credit report reveals. That doesn’t mean you shouldn’t apply for the card anyway. Some department stores will still approve a person who doesn’t have a credit history, they’ll just get a very small line of credit.
Secure credit cards are probably the best credit cards for people with no credit history. A secure credit card is a type of credit card where a deposit is given to the lender. The amount of the deposit determines the person’s credit limit. Eventually, if you are very good about paying the balance every month, the lender will increase your credit limit without demanding additional funds.