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How to Get a Credit Card With No Credit History

Ask Savvy: Will I Ever Be Approved For a Credit Card?

Dear Savvy,

I am 24-years old, employed, rent an apartment, and am a college graduate. I do not have a credit card — I have used a debit card for the last eight years or so. I recently applied to get a MasterCard but was rejected on the basis of not having enough credit references. But how can I get good credit if I don't have a credit card?

I wrote back asking for them to reconsider their rejection, saying that I am looking to establish credit and that I do not have bad credit (I checked my credit report) — simply no credit. I was rejected again. What's the next step? Will I ever be approved for a credit card?

To see my answer,


Savvy says: Try and see things from the perspective of the credit card company. The only way they can evaluate a potential borrower's credit worthiness is to review credit history, and if there's no history to speak of, the company doesn't have any reason to trust that you'll use a card responsibly. The good news: you can start working toward establishing legitimate credit within a year.

Apply for a secured credit card, which works differently than a regular card. Instead of the company giving you a predetermined limit, you're required to deposit money and your credit limit is equal to that deposit or a percentage above that amount. If you use a credit union, ask about secured credit products before checking out other sources. Otherwise, search Bankrate's list of secured credit issuers (go for one with low fees) and make sure the issuer you choose reports to the credit bureaus.

As long as you've shown discipline with your secured card, the issuer will qualify you for a regular credit card after about a year of punctual payments. Keep in mind that because secured cards typically have high interest rates, you shouldn't keep it longer than necessary. As with any card, be sure to understand all fees involved before opening an account.


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