Best Credit Cards for No Credit History in June 2024: A Comprehensive Guide

Introduction

Having no credit history can feel like a catch-22 when trying to obtain your first credit card. Lenders want to see that you have a track record of responsible borrowing before approving you for a new line of credit. However, without access to credit, it’s challenging to establish that history in the first place.

If you’re just starting out on your credit-building journey, you’re likely exploring options for the best credit cards for no credit history. While your choices may be limited initially, obtaining the right card and using it responsibly can put you on the path to a strong credit score and increased access to better credit products down the line.

In this comprehensive guide, we’ll dive deep into the world of credit cards for those with no credit history. We’ll explore what it means to have no credit, the importance of building credit, tips for choosing the best card, and detailed reviews of top options available as of June 2024. By the end, you’ll have a clear understanding of the path forward and the tools to make an informed decision.

READ ALSO: The Definitive Guide to Building Credit with Your First Credit Card in 2024

What Does It Mean to Have No Credit History?

Having no credit history means that you have not yet established a record of managing credit accounts, such as credit cards, loans, or mortgages. This lack of credit history can make it challenging to obtain approval for new credit products because lenders have no way to assess your creditworthiness or ability to manage debt responsibly.

It’s important to note that having no credit history is different from having a poor credit score. A poor credit score typically results from negative factors like missed payments, high balances, or collections, whereas no credit history simply means you haven’t had the opportunity to demonstrate your credit management skills yet.

Why Your Credit Score Matters

Your credit score is a numerical representation of your creditworthiness, and it plays a crucial role in your financial life. A good credit score can open doors to better interest rates, higher credit limits, and more favorable terms when applying for loans, credit cards, mortgages, or even rental agreements.

On the other hand, a poor credit score can make it challenging to access credit products, and when you do qualify, you may be stuck with higher interest rates and less favorable terms. Employers, landlords, and even utility companies may also consider your credit score when making decisions about working with you.

Building a positive credit history from the start is essential for securing your financial future and accessing the best credit products and opportunities.

Tips for Choosing the Best Credit Card with No Credit History

With so many credit card options available, it can be overwhelming to decide which one is the best fit for your needs, especially when you’re starting from scratch. Here are some expert tips to help you choose the right credit card for building credit with no credit history:

1. Choose a Card That Reports to All Three Credit Bureaus: One of the most crucial factors in building your credit history is ensuring that your credit card activity is reported to all three major credit bureaus: Experian, Equifax, and TransUnion. Most major issuers report to all three bureaus, but some smaller issuers may only report to one or two. Make sure to choose a card that reports to all three to maximize your credit-building efforts.
2. Review the Application Requirements: Many credit cards designed for those with no credit history have more lenient application requirements. Some may not require a credit check or may consider alternative data points, such as rent payments or financial history, to determine creditworthiness. Additionally, some cards may not require a Social Security number to apply, making them more accessible to certain populations.
3. Consider the Costs and Fees: While building credit is the primary goal, it’s essential to choose a card with reasonable costs and fees. Some cards may charge annual fees, application fees, or higher interest rates, which can add up and potentially lead to debt if not managed carefully. Look for cards with minimal or no fees to keep costs low as you establish your credit history.
4. Look for Additional Credit-Building Features: Beyond reporting to the credit bureaus, look for cards that offer additional credit-building features, such as free access to your credit score, opportunities for credit limit increases, and automatic payment reminders to help you stay on track and avoid missed payments.
5. Find a Card with an Upgrade Path: Some issuers allow you to upgrade to an unsecured card or a card with better rewards and benefits once you’ve established a positive payment history. Look for cards that offer a clear path for upgrading without having to apply for a new card, which could result in another hard credit inquiry and potentially impact your credit score.
6. Consider Rewards Potential (But Don’t Prioritize It): While earning rewards should not be the primary focus when building credit, some cards for those with no credit history do offer rewards programs or cash back. While these perks are nice, it’s essential not to let the allure of rewards distract you from your primary goal of establishing good credit habits and avoiding interest charges by spending only what you can afford to pay off each month.
7. Check for Preapproval Opportunities: Many credit card issuers offer preapproval or prequalification tools that allow you to check your eligibility for a card without a hard credit inquiry, which can temporarily lower your credit score. Checking for preapproval can help you identify cards you’re more likely to be approved for without risking your credit score.

By following these tips, you can increase your chances of finding the best credit card for your specific situation and kickstart your credit-building journey on the right foot.

READ ALSO: The Ultimate Guide to Credit Card Minimum Payments: Calculations, Impacts, and Strategies

What People Are Saying About Credit Cards Available with No Credit History

As you explore credit card options for building credit, it can be helpful to hear from others who have been in your shoes. Here’s what some people are saying about popular credit cards available for those with no credit history:

Reddit User on the Chase Freedom® Rise℠ Card: “Chase Freedom Rise is my pick. To what others have said, it’s an unsecured credit builder card without any real disadvantages when compared to ‘normal’ cards. This can also be useful for you down the road, since you can establish a relationship with Chase, and Chase has some of the best rewards cards on the market. It also offers a good product change path, as the [Chase Freedom Flex℠ and Chase Freedom Unlimited®] are both fantastic cards to have.”

The user goes on to recommend Discover as another great issuer to start your credit journey with, as “they’ve historically been one of the more forgiving issuers for people with limited credit, and their products are solid. They also probably offer the best secured card on the market, if you must resort to a secured card.”

Reddit User on Starting with Your Bank: “If you bank with Chase that might be a good place to start. They have good cards and they might be more willing to offer you an unsecured card from the start as you already have a relationship.”

These insights highlight the value of starting with issuers like Chase and Discover, which are known for offering accessible credit-building products and potential upgrade paths to better cards as your credit improves.

Expert Advice on Building Credit from No Credit History

Bankrate editor Steve Dashiell offers valuable insights on the options available for building credit from scratch:

“Rather than thinking of your lack of credit history as a negative, think of it as a blank slate. You’re unproven to most lenders, which means that while you may not qualify for some of those juicy high-earning rewards cards, you still have a variety of credit-building options available through most issuers. Student cards, for example, are an excellent place to start if you’re a student, as many have lax credit score requirements. Secured cards are another great option if you don’t mind putting down a security deposit to open your account. Both card types are relatively simple and can help you start building your credit.

And if you don’t feel comfortable managing your own credit card just yet, you can do what I did: ask to become an authorized user on a trusted family member’s credit card. This lets both of you benefit from the main accountholder’s credit habits but frees you from managing payments. Once your score improves and you become more comfortable with how a credit card works, you can apply for a card in your own name.”

Dashiell’s advice highlights the importance of exploring all available options, including student cards, secured cards, and becoming an authorized user, to kickstart your credit-building journey. By starting with the right card and managing it responsibly, you can pave the way for a strong credit history and increased financial opportunities.

A Closer Look at Our Top Credit Cards for No Credit History

Now that we’ve covered the basics of building credit from scratch, let’s dive into a closer look at some of the top credit cards for those with no credit history as of June 2024.

Discover it® Student Cash Back – Best Student Card with Rotating Bonus Categories 

The Discover it® Student Cash Back is an excellent choice for students looking to earn rewards while building their credit history. Here’s what sets this card apart:

• Generous Rewards Program: Earn 5% cash back on rotating quarterly categories (like gas stations, restaurants, and more) when you activate, up to the quarterly maximum. Additionally, earn an unlimited 1% cash back on all other purchases.

• Cashback Match™: Discover will automatically match all the cash back you’ve earned at the end of your first year with the card, effectively doubling your earnings for that introductory period.
• No Annual Fee: You won’t have to worry about paying an annual fee, making it easier to focus on building credit without additional costs.
• Intro APR Offer: Enjoy 0% intro APR on purchases for 6 months, which can be helpful for larger purchases or managing expenses as a student.
• Credit-Building Tools: Access your FICO® Score for free and receive alerts if your Social Security number is detected on dark web sites, helping you monitor and protect your credit.

The Discover it® Student Cash Back is an excellent choice for students who want to earn rewards while establishing good credit habits. With its generous rewards program, cashback match, and credit-building tools, it’s a well-rounded option for those just starting their credit journey.

Capital One Platinum Secured Credit Card – Best for Accessing a Higher Credit Line 

The Capital One Platinum Secured Credit Card is a standout option for those looking to build credit with the potential for a higher credit line. Here’s what you need to know:

• Initial Credit Line: You can qualify for an initial credit line of $200 with a refundable security deposit as low as $49, $99, or $200 (based on your creditworthiness).
• Credit Line Increases: Capital One automatically considers you for a credit line increase in as little as six months with responsible card use and on-time payments.
• No Annual Fee: Avoid additional costs with no annual fee, making it easier to focus on building credit without extra expenses.
• Credit-Building Tools: Access your credit score through CreditWise® from Capital One and monitor your credit-building progress.

The Capital One Platinum Secured Credit Card is an excellent choice for those who want to establish credit without being limited by a low credit line from the start. With the potential for credit line increases and no annual fee, it’s a cost-effective way to build credit while maintaining flexibility.

Discover it® Secured Credit Card – Best Secured Card for Gas and Dining 

The Discover it® Secured Credit Card is a standout option for those who want to earn rewards while building credit with a secured card. Here’s what makes it a great choice:

• Rewards Program: Earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases per quarter), plus an unlimited 1% cash back on all other purchases.
• Cashback Match™: Discover will automatically match all the cash back you’ve earned at the end of your first year with the card, effectively doubling your earnings for that introductory period.
• No Annual Fee: Avoid additional costs with no annual fee, making it easier to focus on building credit without extra expenses.
• Potential Upgrade: Discover automatically reviews your account after seven months to see if you’re eligible for an upgrade to an unsecured card and a refund of your security deposit.
• Credit-Building Tools: Access your FICO® Score for free and receive alerts if your Social Security number is detected on dark web sites, helping you monitor and protect your credit.

The Discover it® Secured Credit Card is an excellent choice for those who want to earn rewards on everyday purchases like gas and dining while building credit. With its cashback match, potential upgrade path, and credit-building tools, it’s a well-rounded option for credit-builders.

Capital One Quicksilver Secured Cash Rewards Credit Card – Best Starter Rewards Card 

The Capital One Quicksilver Secured Cash Rewards Credit Card is an excellent option for those looking to earn rewards while building credit with a secured card. Here’s what makes it stand out:

• Rewards Program: Earn an unlimited 1.5% cash back on every purchase, every day, with no rotating categories or caps.
• Bonus Rewards: Earn 5% cash back on hotels and rental cars booked through Capital One Travel, where you’ll get Capital One’s best prices on thousands of trip options.
• Credit Line Increases: Capital One automatically considers you for a credit line increase in as little as six months with responsible card use and on-time payments.
• No Annual Fee: Avoid additional costs with no annual fee, making it easier to focus on building credit without extra expenses.
• Credit-Building Tools: Access your credit score through CreditWise® from Capital One and monitor your credit-building progress.

The Capital One Quicksilver Secured Cash Rewards Credit Card is an excellent choice for those who want a straightforward rewards program while building credit. With its unlimited cash back on all purchases, bonus travel rewards, and potential for credit line increases, it’s a versatile option for credit-builders.

Chime Credit Builder Secured Visa® Credit Card – Best for Flexible Deposit 

The Chime Credit Builder Secured Visa® Credit Card is a unique option for those looking for a flexible deposit approach to building credit. Here’s what sets it apart:

• No Traditional Deposit: Instead of a lump-sum security deposit, your purchases are backed by the funds in your linked Chime checking account.
• No Interest Charges: Unlike traditional credit cards, this card doesn’t charge interest on your purchases, making it easier to avoid debt while building credit.
• No Fees: With no annual fee, no interest charges, and no cash advance fees, this card is remarkably light on costs.
• Credit-Building Potential: This card reports to all three major credit bureaus, allowing you to build credit history effectively.

The Chime Credit Builder Secured Visa® Credit Card is an excellent choice for tech-savvy consumers who want a flexible and affordable way to build credit without the traditional security deposit or interest charges associated with most credit cards.

Self – Credit Builder Account with Secured Visa® Credit Card – Best for Building Credit with Savings 

The Self – Credit Builder Account with Secured Visa® Credit Card is a unique option that combines building credit with saving money. Here’s how it works:

• Credit Builder Account: Start by opening a Credit Builder Account with Self, where you’ll make small, monthly payments over a set term (typically 12-24 months).
• Savings Build-Up: Your monthly payments go towards building up a savings fund, which then acts as the security deposit for your Secured Visa® Credit Card.
• Credit Mix: By combining a credit card and a credit-builder loan, this product helps you establish a credit mix, which can positively impact your credit score.
• Credit-Building Tools: Access your credit score and credit reports from all three major bureaus through Self’s Credit Builder program.

The Self – Credit Builder Account with Secured Visa® Credit Card is an excellent choice for those who want to build credit while simultaneously building savings. By combining a credit-builder loan and a secured credit card, this product offers a unique way to establish a credit mix and develop good financial habits.

OpenSky® Secured Visa® Credit Card – Best for No Required Credit Check 

The OpenSky® Secured Visa® Credit Card is a standout option for those who want to build credit without undergoing a traditional credit check. Here’s what you need to know:

• No Credit Check Required: You can apply for this card without a credit check, making it accessible for those with no credit history or even negative marks on their credit report.
• Refundable Deposit: Set your own credit limit by making a refundable deposit of $200 to $3,000, which will serve as your credit line.
• Reports to Credit Bureaus: Your account activity will be reported to all three major credit bureaus, allowing you to build credit history effectively.
• Cash Back Rewards: You can earn up to 10% cash back on everyday purchases with this card, providing added value as you build credit.

The OpenSky® Secured Visa® Credit Card is an excellent choice for those who want to build credit without undergoing a traditional credit check, making it accessible for a wider range of applicants. With its cash back rewards and reporting to all three credit bureaus, it’s a solid option for credit-builders.

Conclusion

Building credit from scratch can seem daunting, but with the right approach and tools, it’s an achievable goal. By understanding the importance of a good credit score, exploring the various credit card options available, and following expert tips, you can set yourself up for success.

Remember, the key to building credit is consistency and responsible credit management. Use your credit card wisely, make payments on time, and keep your credit utilization low. Over time, these positive habits will help you establish a strong credit history, opening doors to better financial opportunities and products.

While the journey may take patience and discipline, the rewards of a good credit score are well worth the effort. With a solid credit history, you’ll have greater access to favorable interest rates, higher credit limits, and more financial flexibility.

So, whether you’re a student, a newcomer to the country, or simply starting your credit journey, embrace the process and take the first step towards building a strong financial foundation. With the right credit card and a commitment to responsible credit management, you’ll be well on your way to a brighter financial future.

FAQs

How long does it take to build credit from scratch? 

Building credit from scratch takes time and consistency. Typically, it takes around six months of responsible credit card usage before you can establish a valid FICO credit score. However, the length of time it takes to build a good credit score can vary depending on your specific situation and credit management habits.

Can I get a credit card without a Social Security number? 

While most credit card issuers require a Social Security number (SSN) for approval, there are some options available for those without an SSN. Some cards, like the Zolve Azpire Credit Builder Card + Checking Account, are designed specifically for people without SSNs, such as international students or workers on temporary visas.

What credit score is considered “no credit history”? 

There is no specific credit score associated with having no credit history. Instead, when you have no credit accounts reported to the major credit bureaus (Experian, Equifax, and TransUnion), you simply won’t have a credit score at all. This means you’ll be “credit invisible” until you start establishing a credit history.

What are some alternatives to credit cards for building credit? 

While credit cards are one of the most popular and effective ways to build credit, they’re not the only option. Here are some alternatives to consider:

• Become an authorized user on someone else’s credit card account (like a parent or spouse). Their credit habits will be reflected on your credit report, helping you build credit history.
• Apply for a credit-builder loan, where you make payments to a lender who holds the money in an account until the loan is paid off. The lender reports your payments to the credit bureaus, helping you establish credit.
• Get a secured loan or secured credit card by putting down a refundable security deposit, which acts as collateral and helps mitigate the lender’s risk.
• Make sure your rent and utility payments are reported to the credit bureaus by using services like Experian Boost or rent reporting companies.

Is it better to have no credit history or a bad credit score? 

Generally, it’s better to have no credit history than a bad credit score. With no credit history, you’re simply a blank slate without any negative marks against you. A bad credit score, on the other hand, is the result of negative factors like missed payments, high balances, collections, or bankruptcies, which can make it much harder to get approved for credit products or qualify for favorable terms.