If you are starting from scratch with no credit history, you represent a very risky prospect for lenders. This is all the main reason why most credit card issuers do not approve credit cards to such borrowers. However, you have to start building your credit history from somewhere, and although the process is difficult and potentially risky, you are required to begin with the cards that are available for customers with no credit history.
Prepaid Credit Cards
Whatever be the state of your credit history or credit rating, you can always get yourself a prepaid card, and also choose the one you prefer the most. Prepaid credit cards are those where you pay the money upfront, and are then be used the same way as you would use a normal credit card. The benefit with prepaid credit cards is that you can never really exceed your budget. Good prepaid credit cards usually provide a credit limit equivalent to the money you have paid to obtain the credit card. You should be cautious about the credit cards which have high activation and transaction processing fees, as that will reduce some of your credit. Prepaid credit cards are available at gas stations, grocery stores and supermarkets.
Secured Credit Cards
Secured credit cards are similar to prepaid credit cards, with the exception that you can keep using them for some time by paying the monthly bills regularly. You pay a security deposit up front, which the lender can take if you fail to make the monthly payments on time. Therefore, secured credit cards represent less of a risk to the customer, which is why the interest rates are slightly lower than what is be expected from those with no credit history.
No credit, credit cards
Many lenders offer credit cards to customers without any credit history. There are quite a few online sites which approve such credit cards. The only downside is that such credit cards come with huge interest rates, sometimes as high as 60%. Your finances need to be managed appropriately, and payments made on time to avoid negative issues in the long term. However, at a time when credit card issuers are shying away from giving you credit, this could be one option to start building your credit history.
Student credit cards
Students without any credit history can go for student credit cards, and if they are below the age of 21, their guardian or parent must co-sign in order to qualify for the credit card. If not, the student will have to provide proof of income to show that he or she is capable of taking up that obligation.
Instant approval credit cards
Instant approval credit cards do not usually check your credit history. Unlike regular credit cards, you get to know whether the credit card will be approved very soon. These credit cards have low credit limit and high APR, but could be helpful for emergency transactions or for building credit history.