You could also try a credit card that is secured by a checking account balance. I believe that your credit is limited to the amount of the account securing the card, so you don't run the risk of running up a huge balance on the credit card that you can't pay off.
Good advice from Stephanie. Also, you can start with a department store credit card - I think mine was "Fashion Bug"!!! The APR will probably be sky-high, and the available balance relatively low, so pay it off in full every month to prevent getting charged that interest! I've also recently seen an ad for "NerdWallet" that's supposed to help you find the "right credit card for you," although I haven't tried it myself. Paying off a credit card, making regular payments on a student loan, car loan, etc. will make a huge positive impact on your future credit score. Good luck!
R. Scott’s Answer
When I was in college there were credit card companies set up in the book stores. They generally love college kids. The other option is to have a parent co-sign. Good luck.
People with no credit usually include students and new immigrants who have never taken out a loan and have no credit cards. Although their slate is technically clean, in the case of credit history none is worse than bad. It is always possible to restore bad credit with time and regular payments. However, without any credit history, financial institutions have no way to gauge your ability to repay loans or to pay bills on time. Rest assured, though, there are credit cards for people with no credit.
For many people, college is the time to acquire that first credit card. Financial institutions formerly camped out in tents and booths across campus offering low-interest rates and added perks like free money or electronic devices. However, since the CARD Act of 2009, strict limitations have been enforced on marketing and issuing credit cards to young people. The law now requires any person under the age of 21 who is not an authorized user on his or her parents’ credit card accounts to provide proof of income to repay loans or to have an adult co-signer.
These regulations were established to reduce predatory finance companies from targeting impressionable, cash-strapped students. So far, it seems that the law is a success because, according to a recent report from Credit.com, based on a study from the Federal Reserve, the total number of new credit card accounts opened by students decreased by 17 percent from 2009 to 2010.
The easiest way to build up credit and reap the benefits of a credit card is to apply for a prepaid card. These cards do not require credit history, and they can be used just like a regular credit card for on-line purchases and bill payments. Users also benefit from incentives like cash-back offers. Best of all, you do not have to worry about late fees or exceeding your credit limit.
However, before you opt for a prepaid card, be sure to confirm that your credit will in fact be reported using this card. For example, the Capital One Reloadable Prepaid MasterCard offers no credit check or activation and overdraft fees; however, it does not build credit. Whereas the Bancorp Bank Purple Diamond Prepaid Visa RushCard charges an activation fee, but helps you to establish credit.
Moreover, many credit cards now include built-in features to help card-holders establish good credit. For example, the Journey Student Rewards card from Capital One offers 1.25 percent cash back on all purchases when the bill is paid on time.
Another option is to apply for a credit card with a guarantee from a co-signer. Having the financial backing of an outside party increases your chances of approval, and even perhaps the amount of your or better terms for your agreement. On the flip side, your handling of the account directly impacts the co-signer’s credit, in addition to your own, so if you are late or delinquent in your payments, both parties will suffer.
There are usually promotional credit card offers on campus and college student focused credit cards so you likely won't have trouble getting one at least with a low credit minimum, without any credit.
Something you can do to start building credit is to put a utility bill in your name if you have a rental apartment in college. Or you can co-sign on a car loan with your parents if you can't outrightly buy the car. Then once you have a credit card, start putting some purchases on it (even just groceries or books) and make sure you pay off the balance in full each month to keep your credit high. From there, if you have a good credit record established, you can ask the bank for a higher limit, or apply for other credit cards after a little bit of time, getting an even higher limit.
There are number of ways to get your first credit card. If this option s available to you, you could be added as an authorized user on someone's card with a limited line. You could get a checking account and debit card and establish a banking relationship and then apply for a credit card through a local credit union or bank. You could apply for a secured credit card or a student credit card.
People with no credit often have the most difficult time getting approved for a credit card. That's because most credit card issuers require a credit score to approve a new credit card application. However, you won't have a credit score until you have at least one active account on your credit report for six months.Some credit card issuers realize that people have trouble getting a credit card for the first time and they've made credit cards specifically for people with no credit.
1) Make Sure You Have a Job- You must have sufficient income to repay your credit card balance, especially if you’re under age 21. The income you put on your credit card application must be your own – you can’t use the income of your parents, spouse, or other household members to qualify for a credit card unless you have reasonable access to that money.
2) Pre-Qualify for a Credit Card- A few major credit card issuers have online pre-qualification that allow you see if there's a credit card available for your credit profile. These pre-qualifications are typically soft credit checks – meaning they won’t hurt your credit score or show up on your credit report when someone else checks your report.
3) Get a Student Credit Card- If you’re a student, you may qualify for a student credit card. These cards are designed for college students who may not have a large income or a credit history. To qualify, you may have to provide proof that you're enrolled in a qualified college or university. Choose carefully. Some student credit cards have high interest rates and lots of fees.
4) Get a Secured Credit Card- Secured credit cards are the go-to cards for people who can’t get approved for a traditional credit card. There’s nothing wrong with having a secured credit card as long as you pick one that reports to the major credit bureaus and has few fees.
Avoid putting in a lot of credit card applications. If you’re turned down for a major credit card, even if it’s a student credit card, don’t keep applying. Instead, look for a a secured credit card. Choose these credit cards ahead of time, so you’re not desperately searching for a credit card that will approve you.
Watch out for any credit card that guarantees approval without first checking your credit score. There’s probably a catch in the form of high fees or high interest rate or both.
Good luck with your credit card adventure!!!