Credit Cards for People With No Credit

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One of the worst things about not having credit is it hard to get credit.  It reminds me of when I was young with very little experience and couldn’t find a job to build experience.  Fortunately, there are a couple of credit cards for people with no credit; you just have to keep an open mind and look around.

If you have no credit, but would like to start building your credit, you have a few options.

Some of these options behave like credit products, but are not.

Other options look like other types of loans, but help you build the credit you need to get approved for a credit card later.

Secured Card

The easiest solution if you need a credit card, but have no credit, would be to open a secured credit card.  Here’s how secured cards work.

Essentially, you deposit $500-$1,000 in a bank account which the bank or credit union will “freeze” to hold as collateral against your credit line in the same amount.

You spend up to your credit limit just like a normal credit card.

The beauty is you cannot exceed the amount the bank has on deposit dedicated to cover your credit line.

Even though you have not been extended a credit line, most banks still report these products to the credit bureaus, which will help people with no credit.

Car Loans and Other Loans

If you are one of those people with no credit, and you do not have $1,000 lying around to deposit and tie up just to get a secured card, there may be another option.

If you are in the market for a car you might consider financing the purchase with a small car loan.

Auto loans are typically much less stringent and often approve people with no credit or credit cards.

I do not recommend buying a brand new car you cannot afford just to build your credit score.  That’s dumb.

However, if you can easily make a small payment for a reasonable, used car, it might help to improve your credit.

If you are not in the market for a car consider a small personal loan.  Lending Club is a great source for such loans.  So are Credible and SoFi.  Borrow only what you can afford to quickly pay back.

Perhaps you can use the money to add a back splash to your kitchen, or replace the tires on your car.

I would recommend keeping the requested credit line under $5,000 for this type of loan, just so things don’t get away from you.

Credit Cards for People With No Credit

There are specific card offerings for people with no credit out there.  I’ve listed below a couple of options:

  • Navy Federal Credit Union nRewards Secured Card
  • USAA Secured Credit Cards
  • SDFCU Savings Secured Visa Platinum Card

These products are from high-quality institutions and they are reported to the three major credit bureaus as unsecured, meaning one of these cards could help boost your credit score.

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