The new credit card rules have introduced certain new terms that pose specific problems for those with no income. If you have no credit history and no income of your own, it might become very difficult to get credit card. But all is not lost and there are still options that will help you build a credit history of your own
Get a co-signor
Students below 21 have to show proof of their income or get their guardians or parents to co-sign on the credit card. Similarly, the unemployed spouse or family member cannot get a credit card unless a working member of the family with a credit history is willing to sign on the credit card. In these cases, the credit card will still be handed out with the belief that the co-signor would take responsibility for the credit card debt. Customers though, should be careful about using this option because the credit history through the new card account, would reflect on the co-signor as well, and bad credit habits
could spoil their credit history too.
No credit check instant credit cards
There are instant credit cards
offered to risky customers by creditors who are willing to take the risk for higher interests. The credit card applications for such customers are processed very quickly without any credit checks, and the applicant is informed almost immediately whether their application has been approved or not. These instant credit cards come with very low credit limits, and exorbitant interest rates and other charges.
Secured credit cards
Unsecured credit cards have high interests and are offered to customers with bad or no credit history. However, if a customer wants to save on the interest, they can go for secured credit cards
which eliminate the risk factor in extending credit towards an individual, resulting in lower interest rates. For secured credit cards, the individual has to make an initial security deposit in an account. The customer has to pay off the outstanding balance on the credit card
at frequent intervals. The credit limit available is equal to or slightly less than the security deposit made in the customer’s account. If a customer fails to make the payment on time, then the credit card issuer can withdraw the security deposit. This means the customer stands to lose the deposit if they miss payments, which is why there is no risk involved from the creditor’s perspective. Therefore the card interest rates are lower and the credit card is offered for those who don’t have a credit history, or have a very bad credit history.
Prepaid credit cards
Gas stations, departmental stores and shopping malls often provide prepaid credit cards, and report to credit bureaus as well. The customers can choose a prepaid credit card
where fees are low, and most of the amount paid is available on the card for expenses.