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It can be difficult to build your credit history if you have limited or no credit. When it comes to your credit score, the most significant factor is your payment history, so you need some type of credit account in order to begin building a record of on-time payments.
Even though a number of companies shy away from these customers, there are some issuers willing to offer new credit cards to people with a limited or no credit history. If you do apply and get approved for a credit card, it is critical for you to maintain a stellar record of on-time payments with one of these cards. You may be able to qualify for a card with more competitive rates and fees if you are able to manage your new card responsibly.
Here are five credit cards for those with a limited or no credit history:
The Capital One Platinum card
is typically offered to applicants with “fair” credit, but can be a very attractive choice for people with a limited credit history. Customers receive an initial line of credit but can increase that credit line after making their first five monthly payments on time. The standard interest rate is 24.99% (Variable), which applies to new purchases and cash advances. This card includes fraud protection, as well as extended warranty coverage which automatically adds a year to the manufacturer’s policy on covered items. Auto rental insurance is included to avoid the costly insurance offered by rental car companies, and travel accident insurance is provided to protect you against death or injuries when you use your card to make travel purchases. There is no annual fee or any foreign transaction fees on this card.
If you have limited or no credit, the Capital One QuicksilverOne Cash Rewards card
is one of the only cards available that offers cash back rewards on all purchases with no limits. Cardholders receive 1.5% cash back on all of their purchases. The interest rate of 24.99% (Variable) will apply to both new purchases and cash advances. This is a variable interest rate that can rise with the prime rate. Capital One also offers QuicksilverOne cardholders the opportunity to increase their credit line after making their first five monthly payments on time. This card offers extended warranty coverage, auto rental insurance, and a price protection policy that reimburses you for a difference in price should an eligible items be found at a lower price within 60 days of purchase when you make the purchase with your credit card. There is a $39 annual fee for this card, and no foreign transaction fees imposed on charges processed outside of the United States.
The Capital One Secured card
is one of the best secured cards on the market, and is a solid choice for people with limited or no credit. New applicants first submit a refundable security deposit of $49, $99, or $200, depending on their creditworthiness. Then, you will receive a credit line between $200 and $3,000, and the card works like any other credit card. You will receive a statement each month, and must make a minimum payment. Capital One reports regularly to all three major credit bureaus, helping you build up your credit history. You will get access to a higher credit line if you make on-time payments for the first five months of being a cardholder. Other benefits include extended warranty coverage, auto rental insurance, and a price protection policy. The standard interest rate for purchases as well as cash advances is 24.99% (Variable). There is no annual fee or foreign transactions fees for this card.
Citi is another major issuer that offers a secured credit card
to people with bad credit or no credit. When they submit their application, new customers put up a refundable security deposit of between $200 and $2,500. When they are approved for the card, the cardholder’s credit limit will be equal to the amount of the security deposit. This secured card also reports to all three major credit bureaus. The Citi Secured card can be used anywhere MasterCard is accepted. It has a standard APR 23.74%* (Variable) for purchases. There is no annual fee for this card, but it does have a 3% foreign transaction fee. Benefits include worldwide rental car insurance, and trip cancellation and interruption coverage. You also receive extended warranty coverage as well as a damage and theft protection plan. If you bank at Citi, making payments on your balance from another Citi account can be done by transferring funds within the bank, rather than making a payment to a different company.
The Surge credit card is not as well known as these other cards but it is offered by Continental Finance to applicants with any credit profile, including those with a limited credit history or poor credit. The card features a fast and easy application process, with results provided online. The Surge card is also part of the Mastercard payment network, so it is accepted at any merchant that displays the Mastercard logo. Applicants receive an initial credit line of $500, which is subject to available credit. All applications are reviewed for an unsecured product, but may be approved for a card with a $50, $150 or $500 refundable security deposit based on creditworthiness. The card has an interest rate of 30.74% APR, which is a variable rate based on the Prime Rate. The Surge card has an annual fee of $125 for the first year, and $96 each year after that. There is also a monthly maintenance fee of $10, or $120 per year.