Do you want to take out a loan but don’t have any credit? It can be challenging to find the best starter credit cards for no credit. If this is your situation, we have compiled a list of our favorite starter credit cards for people with little or no credit history. These are designed for people who need a small line of credit and want to build their score.
Get a credit card with no annual fee and a low-interest rate.
You first want to get a credit card with no annual fee and a low-interest rate. Yearly fees are complex for people with little money because they can add up quickly if you aren’t using the card very much. You also need to keep an eye out for cards with high penalties such as over-limit fees, late payment charges, and cash advance rates that exceed 25%.
The best starter credit cards will have an APR of 14% or lower, so this number should be your main focus when shopping around. It would help if you also looked into a credit card that has no foreign transaction fee. This is important for traveling internationally and using their new starter credit card while away from home.
Make sure there’s no foreign transaction fee AND make purchases in the US dollar denomination only!
>>More: Start building your credit with a secured credit card. Explore your options at EdFed.
The best secured credit card that doesn’t require a credit check
The best starter credit cards will offer some cashback rewards or purchase protection. This means you can make purchases and be rewarded for them over time.
The other thing to look out for is the grace period on your card; this is how long you have after purchasing before interest gets charged onto that purchase. A good rule of thumb is to get one that has at least 25 days (i.e., 25 * 24 = 600/12).
What’s the difference between bad credit and no credit?
Because of a chain of credit blunders, lenders are hesitant to offer you credit because of your low credit score. A bad credit rating is defined as having a score below 630 on a 300 – 850 scale. Difficulty finding housing and paying higher utility costs can be the consequence of having no credit.
It’s vital to concentrate on repairing your credit history if you have terrible credit. How you improve your score for your circumstances is determined by what options are available to you. You’re still considered high risk if you don’t pay your credit card off in full each month.
Check to see if there are any introductory rates on balance transfers.
When looking at a credit card, check to see any introductory rates on balance transfers. These work in your favor because they allow you to transfer balances from other cards onto the new one without being charged interest for 12-18 months after opening the account.
There is no need to carry a balance when using these starter credit cards; we recommend only using them for online shopping and convenience purchases like coffee, lunch, and snacks during work breaks. You don’t want this type of spending behavior recorded on your credit report, so make sure not to carry large amounts of debt.
Apply for an online secured credit card, which requires you to put down collateral upfront but has lower rates and fees than unsecured cards
One of the best starter credit cards for people with little to no credit is an online secured card. These require you to put down collateral up front but have lower rates and fees than unsecured cards, so they are great options if you don’t want a monthly fee attached to your account.
Your credit score does not get better overnight, and it can take time to build a solid credit profile. However, the best starter credit cards won’t damage your score because they have low rates, no penalty fees, and offer you cashback or rewards for using them responsibly.
Find out how long it will take before you can apply for an unsecured credit card once your account is opened.
Before applying for a secured credit card, you should find out how long it will take before you can apply for an unsecured credit card once your account is opened. The time frame varies, but most of these cards require that applicants have a minimum line of $300 or $400 to be approved, so keep this number in mind when comparing different cards.
We recommend only opening one starter credit card at a time because multiple lines open up on your report and may not look good to lenders later down the road.
The best way to build your score over time is by using less than 30% of your available balance each month.
Credit Card Issuers:
Best Secured Card With a Low Deposit Amount: Capital One Platinum Secured Card
Capital One Platinum Secured Credit Card is different from numerous secured cards in that you may qualify for a $200 credit limit with a security deposit ranging from $91.75. However, if you want more considerable bank account limits for the balance of accounts, you will have to send more guarantees to the bank as a refundable security deposit.
Capital One examines your account automatically and may increase it if you pay six times your credit limit. It can also decide to refund your security deposit as statement credit according to your responsible use. If you purchase Capital One Secured Credit Cards, it does not offer reward points, foreign transaction fees, or an annual fee. This does not include rewards.
Citi Simplicity® Card
The Citi Simplicity® Card is a good option for transferring balances from other cards without paying interest, but it does come with a higher APR. However, it offers an introductory 0% rate on purchases and balance transfers for the first 21 months you have your account, which can save you money in the long run if you’re looking to pay off debt or make large purchases.
Customers applying for this card must be at least 18 years old and should maintain a minimum line of $500. The annual fee is waived during year one and all cash advance fees, so applicants do not need to worry about the high costs of using their accounts after receiving them. In addition, there are no late payment fees attached since there isn’t a penalty APR if you miss a payment.
For those who have had an account in good standing for a year, the Citi Simplicity® Card offers one of the best introductory APRs available on credit cards with low rates and fees or transfers from other accounts. The card is perfect for applicants looking to make large purchases without worrying about changing interest rates throughout their repayment period.
The fee needs to be waived each year so that people can afford their monthly minimum balances easily while also enjoying the benefits of having a lower APR available. If you are looking for an account that offers no annual fee, look into Capital One’s QuickSilverOne, one of the lowest APRs on purchases and balance transfer fees in credit cards with low rates or transfer balances.
Best for bonus cashback: Discover it® student cashback
Discover it® Secured Credit Card gives you a $20 statement credit every time you redeem your first 20 rewards points at participating retailers. The card also lets users earn unlimited double-cash back during their first year as long as they have made monthly payments. It does not charge foreign transaction fees, so customers can travel abroad without worrying about additional costs associated with using their accounts when making purchases out of state or
Chase Slate®
The Chase Slate® is another card with a promotional APR of 0% on purchases and balance transfers for 15 months. You can also earn bonus rewards when you add your first authorized user to the account, which qualifies them for access to this same introductory rate if they have an excellent credit score.
The annual fee is waived in year one. Still, it will be $95 each subsequent year after that, so people should be mindful of how much their balances are growing or decreasing along with interest charges throughout the remainder of the term period. There is no penalty APRs applied here either, so even paying late won’t add fees during your repayment schedule.
Customers who want a total cashback bonus of $150 during their accounts’ first year can apply for this card. It also offers bonus rewards on gas, restaurants, and travel purchases after you spend at least $500 in any given month. All cashback is earned as points rather than dollars, so make sure to check your account balance before making the next purchase transaction with your line of credit, or else it will be declined if there are insufficient funds available.
This is an excellent option for applicants who need additional time to pay off their debt without having interest fees attached but don’t want costly annual membership charges associated with other cards that offer no foreign transaction fee waivers too.
Capital One QuicksilverOne Rewards Credit Card
Capital One QuicksilverOne has one of the lowest APRs available on new credit cards with low rates or transfer balances. This card also offers a zero percent APR for 15 months on both purchases and balance transfers while waiving the annual fee in year one only during this promotion period.
Still, it does come with no rewards attached to your account either, which means you won’t earn points towards cash back, travel miles, etc. when shopping online or making transactions out in public.
American Express Blue Cash Everyday ® Card from American Express.
The American Express Blue Cash Everyday Card from American Express is another great option for customers looking to pay down their debt without worrying about fees associated with paying it back after the promotional period ends.
There’s no annual fee attached during year one but will be $75 each subsequent year afterward.
Barclaycard Ring™ MasterCard®
The Barclaycard Ring™ MasterCard® is an excellent option for people who want to transfer their card balances from one account to another without having any fees associated with doing so. It has an APR of 0% on balance transfers, but it does come with a price that will need to be paid back over time and cannot remain unpaid if you’re trying to get rid of debt.
This charge can vary depending on the amount being transferred and when it’s done during your billing cycle (i.e., before or after certain times), which means borrowers should always check in advance.
What should I know before applying for a credit card?
Before applying for a credit card, borrowers should check their expenses to see what they’re spending on each month. This will help them determine if the APR is worth it or not, depending on how much they have in savings and money being spent elsewhere throughout their financial cycle.
Suppose applicants are serious about getting rid of debt and keeping up with payments after that time frame has elapsed. In that case, we recommend checking out other cards like the Chase Slate®, which charges no annual fee during year one and offers excellent cashback rewards (i.e., extra points) towards travel purchases outside of regular transactions made at home/office.
>>More: Start building your credit with a secured credit card. Explore your options at EdFed.
FAQs:
What have secured credit cards?
Secured credit cards are for new borrowers who need to establish or re-establish their trustworthiness with creditors to qualify for better loan terms in the future. In addition, it allows people to build up some positive history on their accounts.
What is a foreign transaction fee?
Foreign transaction fees typically charge customers around three percent of the total purchase they made outside of their home country. Customers should keep in mind that this is separate from any other type of fee (i.e., annual, balance transfer) associated with a new credit card and will vary depending on which one you’re using for your transactions at the time!
Can we get a credit card with a low credit score?
Yes, but it isn’t recommended to apply for a card if you’re just starting with having credit. A good rule of thumb is that people should wait until they have an average score in the mid-to-high 600s or more so they can get approved right off the bat without needing additional information from them during their application process!
What is the best credit card issuer?
It depends on your needs and what you’re looking to get out of the card.
Can I apply even if I am still paying for student loans?
Yes, but please do not open a new credit card if you’re still paying off student loans because this will negatively affect your score and make it harder for you to get approved and qualify for better loan terms in the future once those accounts have been paid off.
What do I have to do to establish credit?
If you don’t have any credit history, the best thing is to get a secured card and make sure all of your payments are processed on time. This will help build up some positive history over time which makes applying for new loans much easier in the future!
Where can I find more information?
EdFed is here to help you with your credit card! Check out this page to check our top-rated credit card based on your preference.
