Companies which supply credit cards verify your income level and examine your credit scores before issuing you a credit card. If you’ve no credit score, the credit card provider has no means of knowing how likely you are to pay back the debt. For that reason, most credit card providers don’t issue regular cards to people without any credit history. But, you may qualify for a credit card if you are able to find a willing co-signer or if you put a downpayment to secure your credit card.
Before 2010, many banks in the United States offered cards to pupils and young people who had no prior credit history and no current source of revenue. These credit cards were designed to help people develop credit. But, since the Credit Card Reform Act of 2009 took effect in 2010, card providers may issue cards to pupils simply if they’ve enough earnings to make monthly obligations or if they’ve a co-signer. For that reason, if you are younger than 21 and have a regular source of income or a parent or guardian willing to go in as co-signer, you can get a card regardless of whether you’ve no present credit history.
You may take out a card no matter of age and without a co-signer if you ensure your credit card using a cash deposit. Secured cards are normally provided with limitations of $500 or less, and in order to get one you need to open a savings account with the provider and deposit a quantity of money in the account that is equal to or surpasses the line limit of the credit card. The bank puts a “hard hold” in your savings account, this means the funds are frozen and unavailable till you shut down the card. Many credit card firms enable you to change a secured credit card into an unsecured card after 6 months or annually, and when this happens you may close the savings account and return your funds.
In the United States, individuals with credit scores below 600 are referred to as having subprime credit scores. This implies they’ve belowaverage credit ratings and are viewed as high-risk investors. Many of the card providers will only provide credit cards to individuals with good credit scores, but some firms give out credit cards to those with bad credit ratings in addition to those who just don’t have any credit history whatsoever. But, interest on these credit cards are much higher than on regular cards, and you frequently have to cover yearly fees and activation fees.
Card companies offer the lowest interest rates to low-risk investors with established credit history. If you’ve no credit history, you generally have to pay a more than ordinary interest even if you’ve a secured credit card or acquire a credit card with a co-signer. While creating one of these credit accounts assists you to build a credit history, you should attempt to keep the balance on the credit card to a minimum to avoid interest on the balance, causing your payment to grow beyond an sum you can afford.