Which credit card is for someone who has no credit history?

By , CardRatings contributor
  • Google +
  • Twitter
  • Facebook

Question: Which credit card is for someone who has no credit history?

Answer: With no credit history, a secured credit card is your best bet. You can search for a secured credit card online or to go to a bank or credit union within your community, and see if they offer a secured credit program. Most banks usually offer such programs.

A secured credit card usually will require a savings account with a balance of  $200 or more and will then issue a card limited to this amount. The benefit of this type of card is that not only do you have a credit card like any other, but more importantly, a secured card develops credit history. You should confirm that the card will be reported to all three major credit reporting agencies.  One thing to ask for in getting such a card is if they will offer you an unsecured card after a designated period of on-time payments.

Secured credit card programs routinely report to one or all three credit bureaus, not for only negative comments such as late payments. But because on-time payment history accounts for over 33 percent of your credit score, on-time payment of any secured debt is the fastest way to build a good credit history. Of course, you never want to be late with any payment as this is the same as pouring a bucket of ice water on your credit building efforts.

When seeking a good secured credit card, find out if your savings will draw interest and how much interest you have to pay on card balances. If there is a promotional offer, ignore it and base your decision on the regular interest rate. Check for anything else you might be seeking in a card such as cash back or rewards. Usually a secured card won't have these features, but occasionally rewards do exist.


Be the first to comment!

Find your card

See which cards might be better for you

Ask the expert

Add captcha
Enter the text shown above:

Featured Partner Cards