Most applications by customers with no credit or newly established credit are rejected. This customer base needs to purchase credit cards geared towards their needs. There are many cards which are accessible to customers with no or limited credit.
Apart from credit scores, some issuers also focus on the client’s income. Thus even an individual with a limited credit history may be able to get a regular credit card. Customers who are denied regular cards can either opt for secured credit cards or, if the applicant is in college, student credit cards.
No Credit History? Apply for Secured Credit Cards
As opposed to unsecured cards, secured credit cards require a minimum deposit to be placed with the credit card issuer. Usually the deposit cannot be less than $300. The maximum deposit can vary anywhere between $5000 and $10000. The deposit acts as collateral and forms the client’s credit line.
The most beneficial feature of secured credit cards is that they report to credit bureaus thereby improving the cardholder’s credit history. Some cards may even report under the guise of unsecured credit. These cards normally charge an annual fee (generally between $20 and $50). Once the client has rebuilt their credit, they can apply for unsecured cards.
Recommended Secured Cards – No Annual Fee Secured Credit Card
The Orchard Bank Classic Master Secured Card is best suited for a new credit history. This secured card waives the annual fee of $35 and requires a minimum deposit of $200. The deposited amount is converted into the cardholder’s credit limit.
Another viable option for clients with poor or no credit is the Public Savings Bank Secured Card. This card eliminates credit and income checks. Most applications are accepted on the payment of the $79 application fee. The card does not levy any annual fee.
Student Credit Cards – No Annual Fees
Practically all student cards do not charge any annual fee. This provision makes college the ideal time to apply for a credit card. Additionally this period is marked by the greatest variety of no annual fee cards. Responsible use of credit during college makes it easier to procure funding after graduation.
Best First Student Credit Card with Cash Back Bonus Options
For students seeking to establish a credit history, the Discover Student Card is the most apt choice. These cards are regarded as the best student cash back cards in the market and offer an astonishing variety of benefits.
The Discover Student Card offers 5% rebates on airlines, hotels, car rentals and cruises between January and March. The same rebate rate is applicable in home improvement stores, department stores and clothing stores from April till June. The 5% rebate shifts to gas stations, hotels, theme parks, zoos and book stores between July and September. The year concludes with 5% rebates on grocery stores, restaurants, movie theatres and movie rentals in October and November.
The Discover Student Card also provides 5% and 20% rebates on purchases from over 100 online retailers including industry bigwigs like GAP.com, OldNavy.com, Dell.com and BestBuy.com. The value of the rebate can be doubled by opting for select gift cards.