What does it mean to have a credit card for no credit?  Do you want to be in this position?  First of all when you first start out in your adult life you are not going to have any credit unless you already had a car loan or other type of line of credit.  To establish a credit history report you need to have some type of credit line.  Most of us start out with student loans, but quickly find out that these types of loans are not really counted on the grand scheme of things.  I will tell you a story and then get into the whole credit cards for no credit.  I had student loans and two credit cards my last two years of college.  Three years later when I went to get a car loan I was told I was considered little to no credit by the banks.  Despite the fact that I had been making monthly payments to credit cards and student loans for more than three years I was still considered in the low credit area.  So the first thing you should realize is that they do consider credit cards to be a type of credit that helps you get a car loan, but when the credit limit is less than 6000 for both cards, in my case, I still didn’t have a lot of credit.  Had the cards been 15,000 each I would have been in a better position.

Now that you can see where the companies are coming from let’s look at what you are normally offered as a person with no credit.  Typically from a credit card company stand point they are going to see you as a risk if you don’t have a lot of credit experience or a lot of credit accounts from your past.  This risk is going to tell the company that you need to start out at a very small credit limit.  Most often this limit will be 250 or 500 dollars depending on the card you apply for.

First premier tends to offer the best card for ease when you don’t have any credit.  They don’t offer introductory rates and your interest rate will be above 9.9% depending on the risk you pose.  You will also not be able to get any rewards the company may have.

Centennial, Continental, and Citibank are going to be like this as well.  Discover is one of the cards that will actually offer you rewards if you don’t have any credit.  They tend to increase the credit limit in a year of opening the account when you pay each month on time.  There are also cash back rewards that you can earn just by using the card.  Capital One and Barclay can also offer the same things regarding rewards.  The difference is the process is a little more difficult.  You may not be approved in thirty seconds for the card.  Often these banks will send you an approval letter.

How can a credit card company help you if you don’t have any credit?  In the past credit card companies and other credit companies have been hesitant to loan you a line of credit when you don’t have any.  They considered the risk to be too great.  Now many of the credit card companies are seeing a loss of potential consumers and a way to make more money if they extend credit to those who have none.  If you are in a situation where you have yet to build up adequate credit for most lines of credit you don’t have to despair.  Several of the major credit card companies offer credit cards for no credit.  These names include Capital One, Credit One Bank, Discover, USAA, Citibank, and Orchard.

What is the difference of these credit cards for no credit?  The biggest difference is the interest rate and requirements.  If you choose credit cards for no credit one of two things will happen with the interest rate.  The company will offer the card at a very high interest rate, or they will offer a card with an annual fee.  The annual or monthly fee can lower the interest rate to the average rate of regular cards.  Another difference is the introductory period.  For these cards there will not be an introductory offer made.  They will approve you with a guarantee and a certain interest rate, but they will not offer such things as 0% interest on purchases for the first three months.

The requirements of the credit cards for no credit are often a little stringent.  For example the credit card company will reserve the right to offer you the interest rate they feel is worth the risk.  This means the interest rate may be different than the actual application rate you saw online.  They also reserve the right to determine the credit limit and how this limit will increase.  For no credit individuals they tend to offer 250 dollars as a starting limit and when you use the card every month, and pay the minimum monthly balance due they tend to start raising the limit.  This limit raise usually occurs every six months.  It is like a reward for you and of course to encourage you to use the credit card more often.  With credit cards for no credit they are willing to work on the interest rate.  If the interest rate is a little high say at 18% some of the companies will lower it by a full percent while you keep the card open and have good standing.  These rate drops must be asked for.

You other option for credit cards for no credit are prepaid credit cards.  These cards allow you to establish your credit history to lower the risk the credit card companies will award you.  These cards work much like ATM cards in that you reload them, pay a fee for the set up and reloading of the card.  It is usually a quick and easy method for establishing your credit.