Applying For A Credit Card With No Credit History
By Keith Baxter
Oddly enough, not only will bad credit work against you when
applying for a loan or a credit card, but no credit will too.
Even though this doesn't seem fair, it is the way things work
in the complicated world of consumer credit. Lenders are leery
about opening accounts for people with no credit history
because they simply have nothing to base your reliability on.
So, if you can't build a credit history without credit and you
can't get credit without a credit history, just what has a
person to do? It's nearly impossible to rent a car, stay in a
hotel, or shop online without a credit card, so let's explore a
few of the options that can eliminate this Catch-22.
Available Credit Options
Although many of the major credit card companies won't give you
a card without a credit history, some smaller ones, like
department stores, will. Find a department store that will
issue you a card and apply for it. You can try getting a gas
station card also. Either way, use your card but be sure to
make all payments on time. Your goal is to build a good credit
history, not just get a credit card.
Find a credit card company that will review your overall
financial situation and not just your credit history. Some
lenders will look at your employment history, your housing
situation, and how often you have moved. If this is all on the
up and up, they may approve your application. Again, use this
card wisely.
Credit Unions
If you are a credit union member, or are eligible for
membership, see what their card issuing terms are. Although
they are no giving out cards with their eyes closed, they will
often have more relaxed conditions for members. You no longer
have to work for a specific company to be eligible to join a
credit union. So it's well worth checking if there's one in
your area.
Secured Credit Cards
Secured credit cards are offered by lenders who will give you a
line of credit that either matches, or is slightly higher than,
a cash deposit that you give them to hold. As your experience
with the card grows, these lenders will often raise your limit
without requiring you to increase your deposit. Eventually, you
can use your experience with this lender to apply for cards that
are not secured.
Student Credit Cards
If you are a student, then you'll be best off with a student
credit card. Student credit cards can be a great way of
building the credit history that you will need to depend upon
after graduation. The important thing here is to remember to
use that opportunity wisely. Many banks will issue college
students a credit card, especially banks that are located in
college or university cities and towns.
When you do manage to get a credit card, remember that you are
establishing a credit history. Show that you are a good
financial risk by paying the bill on time. Don't go crazy with
the spending. It will only cause you problems in the future.
About The Author: Keith Baxter made it his mission after
college to educate as many people as possible to the advantages
and disadvantages of credit through a widespread re-education
initiative. You can find out more about Keith and what he's up
to at
http://www.thebankcreditcardlist.com