If you have no credit history, but want to make an online transaction, the situation could get tricky for you. You can always use your parents' credit, but if that is not possible, there are other ways to go about it. No credit history implies that you are a very risky proposition for lenders. Therefore effectively your credit line is zero and card issuers don't trust you with a credit card and banks wouldn't trust you with a loan either. However, here are some of the ways you can make an important online transaction with no credit history.
Get a prepaid card
This is perhaps, one of the easiest ways to have a card for online transactions without the need to apply for credit cards. You can get a prepaid card at gas stations, groceries and super markets. There is a fee for activating the card. Good cards will allow you to use up the greater part of what you have paid for the card. You should be particularly careful about the transaction fees, which could be high for some prepaid cards. Getting a prepaid card from places that report to credit bureaus, is a good way to start your credit history.
Get a secured card
A secured credit card
is offered to a customer in return for a security deposit. There are two benefits of this. Firstly, you can get a card, which can be used similar to any other credit card, without any credit history. Secondly, the interest rate on the card will be lower than unsecured credit cards
. This is because your deposit can be taken by the card company, if you don't pay the bill at the end of the month. The credit limit on the card is less than the deposit for all practical considerations. Therefore you represent no risk to the lender. If you can manage paying the bill on time, your deposit stays intact and at the same time your credit history improves as well.
Get a student card
If you are a student, it is likely that you have no credit history. But that shouldn't stop you from making an online transaction. This is because getting a student credit card
is really easy with many credit card issuers offering wonderful deals. The only issue would be to get a co-signor guarantee for you if you don't have a source of income. If that is possible, taking a student card is very advisable to build a credit history from an early stage.
No credit credit cards
There are instant approval credit cards that offer cards to customers with no credit history whatsoever. To make an urgent online transaction, this is often one of the best ways. You can even start building a credit history if you have a regular income and are capable of paying off the bills on time. The downside of these cards is that the interest rates are way too high, which is why you must ensure you are not stuck with an outstanding balance at the end of the month.