Credit Cards for People With Insufficient Credit History

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Close-up man swiping a credit card.
Close-up man swiping a credit card. (Image: Levent Konuk/iStock/Getty Images)

Those looking to build a credit history often find themselves in a vicious circle. It’s hard to get a new credit card if you haven't shown you can manage credit responsibly, but you can’t prove you can without a credit card. You can start with an application at a bank or credit union where you've already shown you can manage accounts. If you're a college student, you also may find card issuers marketing on campus willing to extend you credit. If that doesn't work, you will need help from a friend or relative.

Authorized User

Being an authorized user on a card can allow someone to start a credit history without being responsible for the bills. The original cardholder -- perhaps a parent or another family member -- must tell the company he would like to add you as an authorized user. You’ll get a card in your own name and charging privileges, but the bill will go to the original cardholder. Before taking this step, check with the issuer to ensure it reports authorized user activity to the major credit bureaus. Those reports are the only way being an authorized user can help your credit.

Find a Cosigner

In this scenario, you apply for a card with another individual who has a strong credit record. You both get cards in your names, and share responsibility for the payments. You build credit history by paying off what you charge. If you don't, both of your credit scores will suffer.

Secured Card

Some banks and credit unions offer secured credit cards. In these accounts, you deposit an amount that serves as your credit line. You pay your bill every month like with an unsecured card, but the deposit serves as collateral in case you don’t. The issuer must report these payments to the credit bureau for the secured card to help you establish a credit history. Some banks will also covert a secured card into an unsecured card after a set number of months with on-time payments. You also get your deposit back.

Student Card

If you’re a college student, you may be able to apply for a student credit card with a low starting credit limit. Thanks to the CARD Act of 2009, you must be 18 to get one of these. You’ll need to show you can make the payments without relying on your parents. If you don't have a part-time job or another way to prove you can cover your charges, you'll need a cosigner for these cards as well.

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