Getting a credit card when you have no credit can be a hard task to overcome. Especially if you’re not working. Though students can get a credit card pretty easily if they are already receiving student loans, these credit cards usually have a limit of up to $300 to $500.
While getting an unsecured credit card will be challenging, secured credit cards can be an option. Credit card lenders like Capital One promises to refund the deposit after making 8 months of payments on time. Although this may vary with other banks, the refund process is usually between 6 to 9 months.
Upon getting unsecured credit, not only you will be able to get your deposit back in less than a year but you’ll also be able to increase the available credit line on the credit card. This can be a great investment if you use your credit card wisely. Right after increasing your limit, you can spend more money on your credit card, thus get more cash back and benefits. Using your credit card as a cash alternative and paying it back on time will inevitably have a good effect on your credit score.
Unsecured vs Secured Credit Card for People with No Credit History
Most credit card lenders will require you to put a deposit of at least $300 or so. This amount can be as high as ten thousand dollars. However, we recommend putting in an average amount of what you spend on a regular basis monthly. By doing it like this, you’ll have more cash flow and be able to make your monthly payment with ease.
As soon as you get your credit card and making a few monthly payments will not automatically grant a higher credit line. Instead, it will take many months for you to get a credit card with a higher limit. It takes most people years to establish a high credit score. We recommend monitoring your credit score as often as you can.
Some credit card lenders offer free credit scores for actively using their credit card. But the credit score is mostly the VantageScore 3.0, not FICO score. You’ll have to figure out a lot of ways to see whether you could be eligible for a new credit card or personal loan application by just looking at your VantageScore 3.0. So we always recommend checking your FICO score because that’s what most lenders use if not all.
Below, you can the listed credit cards for students who have no credit history. But all of the credit cards listed also apply to young individuals who have income but no credit history.
Beginner Credit Cards for Students 2020
Students make up a large portion of people who want to get a credit card but have no active credit history. Therefore, many lenders have credit cards that students can apply. Keep in mind that most of these credit cards are secured so you’ll have to make a deposit payment.
Bank of America® Cash Rewards
This is a credit card that is offered to students and our best pick for you overall if you’re a student and have no credit. It provides many things that you can manage your budget without paying anything extra. You are also subjected to 0% APR for 15 months from account opening.
Bank of America® Cash Rewards for Students Features
- No annual fee
- 3% cash back in a category of your choice
- Gas stations, online shopping, travel, dining out, drug stores
- 2% cash back on grocery stores and wholesale clubs
- 1% cash back on all the other purchases.
- Access to your FICO credit score free. (one of the reasons why we recommend this card as you’ll need to monitor your credit score to build a healthy credit score.)
- Sign-up Bonus: Upon spending $1,000 within 90 days from account opening, receive $200 in cash rewards.
Journey® Student Rewards from Capital One®
Build credit while getting up to 1.25% unlimited cash back. A great start for college students to build credit. What we love about this credit card is that Capital one may raise your credit limit if you make your first five monthly payments on time. This is a great deal because it boosts your credit score to an enormous degree.
Journey® Student Rewards from Capital One® Features
- No annual fee
- Unlimited 1% cash back on all purchases
- 1.25% for every month you pay on time
- Just like the credit card above, you can get full access to your FICO score through Capital One’s CreditWise tool.
- Availability to create virtual card numbers
- You can create a virtual credit card number to secure your credit card when making online purchases.
Deserve® Edu Mastercard
If you can’t get any credit cards because of no credit history, Deserve® Edu Mastercard is undoubtedly the easiest one to obtain. It requires no credit check but you’ll not get a high credit limit. It will usually be around $200 to $500 at max. This doesn’t mean that you can’t get a higher limit though. As you build your credit, you can always apply for your credit limit to be increased.
The only drawback to the credit card depending on how you look at it is you can’t get cash advances.
Deserve® Edu Mastercard Features
- No annual fee
- Free one year Amazon Prime subscription
- Has $59 value
- Cellphone protection
- Up to $600
- 1% cash back on all purchases