If you go to any forum related to credit cards, you will inevitably see someone asking how to get a credit card when they have no credit history, and you will inevitably see that most of the replies suggest something along the lines of "Get a secured credit card."
The be clear, secured credit cards were not created to be used by people with no credit card history, rather they were designed for people with a bad credit history. So bad that it's completely impossible for them to get any other type of credit card (except for prepaid credit cards, but those don't affect credit history.)
Of course, if having no credit history truly is disqualifying you from getting a credit card, then a secured credit card is indeed your only option, but there are a few things worth considering first:
- If you have a job, even just a part-time job, you should be able to get a credit card even with no credit history.
- Even with no income and no credit history, having a bank account can help you get a credit card from the bank you have an account (especially a checking account) at, especially if you've had a substantial amount of money in the account for a while. For getting a credit card this way, it's better to go to a bank branch and apply for a card in person rather than applying online or over the phone.
- Opening a checking account, or sometimes even a savings account, at a bank may result in you being offered a credit card, especially if you're a student or make a large ($1000+) initial deposit. When I was a student, I was offered a credit card upfront when I opened a checking account with an initial deposit of $1000 even though I had no income and no credit history.
- Anecdotally, I've heard that applying in person is more likely to get you approved than applying over the phone, and applying over the phone is more likely to get you approved than applying online. I'm not sure whether or not this is actually true, but there is a logic to this belief. If you're willing to go to the bank or other issuer in person to apply, and risk the embarrassment of being turned down, it means that you have reason to be confident that you will be approved. This would be especially true if you don't have a credit history, as the issuer would have to rely more on their "perception" of you.
There are considerable downsides to using secured cards, especially the need to make a deposit you can't get back until the card is canceled or expires, and the fact that they usually have more fees than standard credit cards. For those with no credit history, it's worthwhile to try and get a standard credit card before turning to secured cards.
Related Pages:
List of Secured Credit Cards
List of Student Cards
Standard Credit Card Search Engine
