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Best Credit Cards for No Credit for August 2020

Best Credit Cards for No Credit for August 2020

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Jul 31, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Most credit cards require some sort of credit history to qualify.

A credit history is established when a lender reports a credit account, such as a credit card, car loan or mortgage, and the payment history associated with that account to a credit bureau.

Without a credit history, a lender has no way to measure whether you are someone who will pay them back or not. So they will often reject you for certain loans and credit products, or start you off with a very high interest rate and small line of credit to minimize their risk.

However, there are cards designed specifically for people who have no credit file. Many of the cards you can apply for with no credit will be secured cards, meaning they require you to put down a deposit — typically $200 — before you get the card.

The amount of the deposit generally determines your credit limit. With secured cards, you can get your deposit back if you pay off the card in full and close the account, or if you’re upgraded to an unsecured credit card.

Based on our research of cards available through CompareCards, as well as top cards offered by major issuers, we picked some of the best secured credit cards to help you build credit, as well as two unsecured cards. We’ll also look at alternative options, including applying for a store card or joining a credit union.

 

Compare the best credit cards for no credit

 Discover it® SecuredAvantCard Credit CardCapital One® Secured Mastercard®OpenSky® Secured Visa® Credit CardNavy Federal nRewards® Secured Credit CardDiscover it® Student Cash Back
Best forApplicants with no credit who want to earn rewards and get the chance to graduate to an unsecured card.Applicants with no credit who want an unsecured credit card and are willing to pay an annual fee.Applicants with no credit who want a chance for a low security deposit.Applicants with no credit who want a card with no credit check.Applicants with no credit who are military members, veterans and eligible family members.College students who have no credit and want a student credit card to build credit history.
Annual fee$0$39$0$35None$0
Minimum deposit$200No deposit$49, $99 or $200$200$200No deposit
Sign-up bonusFor new cardmembers, Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match. No bonusNo bonusN/ANo bonusFor new cardmembers, Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
RewardsEarn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically.No rewardsNon-rewards CardNoneEarn 1 point for every $1 of net purchase.Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. 1% unlimited cash back on all other purchases - automatically.
Regular purchase APR22.99% variable25.99% variable 26.99% (variable)17.39% (variable)18.00% (variable)12.99% - 21.99% variable

Best overall credit card for no credit: Discover it® Secured

  • 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically

  • Credit line will equal your security deposit of $200 or more*

  • No annual fee, no late fee on your first late payment. No penalty APR*

Highlights
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • See Rates & Fees

See additional details for Discover it® Secured

More Info

Why we like this card: It’s unusual for a secured credit card to offer a rewards program, but the Discover it® Secured does. Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically. And for new cardmembers, Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.

Plus, Discover starts monthly reviews of your account after eight months to evaluate whether you’re able to graduate to an unsecured card. If Discover determines you’re eligible, you’ll transition to an unsecured Discover it® chrome card and your deposit will be refunded. (Note that you’re not guaranteed to upgrade to an unsecured card, and Discover considers your behavior across all your credit products, not just those from Discover, in making that decision.)

There’s also no late fee on your first late payment and no penalty APR. However, late payments will be reported to the credit bureaus and will hurt your credit score, so always pay on time. Setting up automatic payments on your card is one way to make sure you avoid late payments.

What to watch out for: This card is well-rounded and doesn’t have any real drawbacks. If we had to pick something, it would be the 22.99% variable APR. However, that’s standard for cards designed for limited/bad/poor credit. Pay each bill on time and in full, and this won’t be an issue.

Best for no credit with no deposit: AvantCard Credit Card

  • Fast and easy application process

  • No deposit required and no penalty APR

  • 25.99% Variable

Highlights
  • Fast and easy application process
  • No deposit required
  • No hidden fees
  • No penalty APR
  • Report to all three major credit bureaus
  • Zero fraud liability for unauthorized charges
  • Avant branded credit products are issued by WebBank, member FDIC
  • Disclosure: If you are charged interest, the charge will be no less than $1.00

See additional details for AvantCard Credit Card

More Info

Why we like this card: If you’d like to build credit without putting down a deposit for a secured card, the AvantCard Credit Card offers that opportunity. It’s a no-frills card designed for applicants with fair/limited/bad/poor credit. You can check on Avant’s website to see if you prequalify, and if you apply and get approved, your credit limit will range from $300 to $1,000.

What to watch out for: There is an annual fee of $39. Also, residents of Colorado, Iowa, Vermont, West Virginia or Wisconsin cannot get this card.

Best for no credit with a low deposit: Capital One® Secured Mastercard®

Why we like this card: The Capital One® Secured Mastercard® offers the opportunity to submit a security deposit that could be less than your credit limit. When you apply, Capital One determines whether you’ll be required to make a minimum deposit of $49, $99 or $200. Whatever your minimum deposit is, you’ll get a credit limit of $200. Plus, you can split the deposit into multiple payments (as long as it’s paid in full within 35 days of approval).

What to watch out for: There are no major downfalls to this card, but you should beware of the 26.99% (variable) APR. High interest charges can be avoided if you pay on time and in full every month.

Best for no credit with no credit check: OpenSky® Secured Visa® Credit Card

  • 17.39% (variable)

  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.

  • $200 - $3,000 Credit Line*

Highlights
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card

See additional details for OpenSky® Secured Visa® Credit Card

More Info

Why we like this card: If you have limited/bad/poor credit and are looking for a credit card that does not involve a credit check when you apply, the OpenSky® Secured Visa® Credit Card might be just what you’re looking for. Note that even though there’s no credit check, you will still have to provide financial information when you apply, such as your income and monthly housing payment.

What to watch out for: While the other credit cards recommended in this guide have no annual fee, the OpenSky® Secured Visa® Credit Card charges a $35 annual fee. Even though that’s a reasonable amount and may be worth it if you want a card with no credit check, just be aware that there are credit cards for beginners that don’t charge an annual fee.

Plus, the annual fee reduces your available credit — so if you have a credit limit of $200, the $35 annual fee will reduce your available credit to $165 until you pay it off.

Best for no credit if you’re military: Navy Federal nRewards® Secured Credit Card

Why we like this card: The Navy Federal nRewards® Secured Credit Card lets cardholders earn 1 point for every $1 of net purchase. And at 18.00% (variable) APR, its interest rate is better than what you would find on many secured cards.

What to watch out for: This card is issued by a credit union, so you have to meet eligibility requirements and join the credit union to be able to apply for the card. Navy Federal Credit Union serves military members and veterans from all branches of the armed forces, as well as their immediate family members. Department of Defense civilian personnel are also eligible.

Best for no credit if you’re a student: Discover it® Student Cash Back

  • 0% intro for 6 Months*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • 12.99% - 21.99% Variable*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • See Rates & Fees

See additional details for Discover it® Student Cash Back

More Info

Why we like this card: The Discover it® Student Cash Back is designed to help college students build credit, and offers a generous cashback rate. Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. 1% unlimited cash back on all other purchases – automatically.

Plus, for new cardmembers, Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match. There’s also a Good Grade Reward — a $20 statement credit you can earn every school year that your GPA is 3.0 or better, for up to five years.

What to watch out for: You have to remember to activate a new 5% cashback category each quarter. Without activating the 5% category, you’ll only earn 1% back on every purchase.

How to build credit with no credit history

How your credit score works

The most commonly used credit scoring method is the FICO Score, which ranges from 300 to 850. Here are the five factors that influence your FICO Score:

  • Payment history (35%). Whether you pay on time or not.
  • Amounts owed (30%). How much of your available credit you’re using.
  • Length of credit history (15%). Your oldest account and your average age of accounts.
  • New credit (10%). How often you open new accounts and have credit inquiries.
  • Credit mix (10%). The variety of credit products you have. Having multiple types of credit, such as credit cards, an auto loan and a mortgage, is better for your score.

Steps you should take to build credit

  • Pay on time and in full each month. Paying on time is the most important thing you can do to build a good credit score. Even if you only make the minimum payment, that gets reported as an on-time payment. But we recommend paying your card off in full each month so you avoid interest charges and don’t dig yourself into credit card debt.
  • Maintain a low utilization rate. You should use less than 30% of your available credit at any time. For example, if you have a card with a limit of $200, you should only charge up to $60 on the card in any given billing period. If you do tend to charge more, try to make multiple card payments throughout the month to keep your balance low.
  • Don’t apply for too much credit too quickly. Each time you apply for a credit card or other credit product, that shows up on your credit history as a hard inquiry, which dings your score a bit. Plus, when you’re approved for a new credit card, that drops down your average age of accounts. Finally, applying for a lot of new credit at once can make lenders wary of extending a new line of credit, which can lead to a denial of your application.

More options for building credit

  • Join a credit union. A credit union may be more willing to work with someone who is new to credit than a larger bank. Some credit unions restrict membership based on where you live or work, while others simply require you to join a partner organization to qualify.
  • Apply for a store credit card. You’ve likely been asked when checking out at a store if you’d like to apply for a retail credit card that can only be used at that merchant. While these cards often try to lure you in with offers of discounts and then make money by charging you a high interest rate, store cards can be a good way to build a credit history. Make a small purchase each month and avoid rolling over a balance from month to month.
  • Get added as an authorized user. Having someone you trust, such as a parent, add you as an authorized user to one of their existing credit cards can be a way to build credit without having to get a credit card yourself. Just make sure the main cardholder is responsible — they should pay on time and keep a low balance. Also, not all credit cards will report an authorized user’s history to the credit bureaus, so ask the main cardholder to check that with the issuer before adding you.

FAQs for people with no credit

How do I get a credit card? First, you must be at least 18 years old and have a source of income. Most issuers allow you to apply online. Some may also allow you to apply by phone or in person at a bank or credit union branch. You’ll need to provide information, such as your name, address, Social Security number and income. You may get an instant approval or rejection, or your application may go to a pending status where you’ll be notified of a decision by mail.

What’s the best first credit card? The best credit card to establish credit depends on your circumstances. This guide offers recommendations on the best card for college students and military members, the best card that doesn’t require a credit check and more.

What are some easy credit cards to get? No credit card guarantees approval. Issuers will look at your application and assess how much of a potential risk they think you are. However, our guide on the easiest credit cards to get approved for has some recommendations to consider.   

How do secured credit cards work? With a secured credit card, you’re required to put down a security deposit. Typically, the amount of your deposit is also the amount of your credit limit. Many secured cards require a minimum deposit around $200. The deposit provides security for the credit card issuer in the event that you don’t pay back what you charge to the card. In other respects, secured cards function just like regular, unsecured credit cards.

Can I get an unsecured card with no credit history? Yes, it is possible to find unsecured credit cards that will accept applicants with no credit history. If you’re new to credit and are looking for a card with no deposit required, one to consider is the AvantCard Credit Card, listed earlier in this article. Another card that could fit your needs is the Petal® Visa® Credit Card.

However, avoid cards from issuers such as First Premier and Credit One (not to be confused with Capital One), which may look like they’re designed to help build credit, but often hit cardholders with expensive hidden fees. There are better, less expensive ways to build credit.

How can I build credit without a credit card? It is possible to have a credit score without having ever had a credit card. For example, if you have student loans, or if you’ve taken out an auto loan, that’s enough for you to have credit history. However, the credit scoring formula likes to see you responsibly manage different types of credit, which is where credit cards can help if you only have loans being reported to the credit bureaus. If you’re concerned about overspending on a credit card, you can get a card, put a small, recurring charge on it (like a Netflix or Hulu subscription) and set up autopay. That way you’re spending a controlled amount, you’re paying on time each month and your usage will be reported to the credit bureaus.

What is the starting credit score? Until you take out a credit product, such as a credit card or an auto loan, you won’t have a credit score. (The exception is if someone adds you as an authorized user on a credit card that’s not your own — in most cases, their payment history will be reported to the credit bureaus and help you build credit.) Once you have a credit product or become an authorized user, it will take several months before your activity gets reported and a score is generated for you. When you do get a credit score, it will likely start out low and steadily climb as positive account activity is reported to the credit bureaus.


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