5 Best Credit Cards When You Have No Credit

5 Best Credit Cards When You Have No Credit

After 20 hours of research evaluating 65 products, we picked Discover it® for Students as our top choice.

It can be overwhelming to apply for your first credit card. Responsible credit use is difficult for most, including those that have been using them for a long time. According to NerdWallet, the average household in 2016 has $16,883 in credit card debt, with U.S. households owing a total debt of $784 billion.

Applying for your first credit card will set the tone for credit card use over your entire life. For best results, choose a credit card that rewards good behavior, and forgives first-time instances of bad behavior while you get use to the idea of using a credit card.

Here’s the deal:

The best first credit card will help you to build your credit score, which is important when you want to apply for a mortgage, an apartment, or even car financing.

How to Get a Credit Card with No Credit

Established credit card users have tons of options when it comes to cash back credit cards, travel rewards credit cards, and more. But for those just starting to build credit, the options are a lot more limited. You'll want to pay attention specifically to starter credit cards if you can classify yourself as such:

  • College students, young adults, immigrants, and anyone else with “thin files” regarding responsible purchasing.
  • Those that have been avoiding credit cards their whole life because they're afraid of debt. Similarly, those that want a basic credit card to help build up their credit so that they can take out a mortgage or car loan.
  • Those trying to rebuild bad credit history, who may only qualify for a secured credit card at this point. A secured credit card is like a normal credit card, but it requires a (refundable) security deposit before being approved and receiving your card.

Responsible Credit Card Use When Opening a Starter Credit Card Account

If you're opening a credit card for the very first time, it's important to think about responsible credit card use. A failure to follow these important credit card money mantras will hurt your ability to build a great credit score:

  • A credit card is NOT free money. A credit card is like a bank loan and should be paid back in a timely manner to build up your credit score.
  • Get a starter credit card that has little to no annual fees and a small APR (annual percentage rate) so that if you accidentally miss a payment, it won't crush you. Usually, starter credit cards have high APRs (20-30%) and no frills or rewards. That said, if you're good about paying off your balance each month, you can lower your APR and eventually apply for a credit card that offers better rewards.
  • Try to pay in full every month. Only paying the minimum is how credit card debt starts.
  • Don't buy anything you don't need or you can't afford, based on your budget.
  • Resist the temptation of new credit card offers, at least until you've built up a great credit score and want to trade up from your starter credit cards.

Here's the Bottom Line:

There are 200+ choices in the market today, so it can be confusing to choose the perfect one for your situation. Luckily, we've already done the research for you with regards to top cards and their major pros and cons.

Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated March 26, 2018 but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.