When you’re trying to apply for credit cards for no credit it can be a monster of a hill to climb. Most people have gone through this situation at one point in their life, and everyone understands the irritations and frustration that comes along with it.
However, these can be extremely beneficial if you utilize them in the appropriate manner. Today we’re going to discuss what these credit cards are and the types of advantages or disadvantages that come along with them.
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What are Credit Cards for No Credit?
This is one of the most self-explanatory titles for any credit card. Basically if you don’t have any type of credit then these are great start credit cards. Most of the individuals who utilize these are individuals who turn 18 or college students that need a little extra money for food, books, or anything else necessary during those stages of life. Then again, credit cards for no credit can be used by anyone who wants to start getting credit for their future.
The Advantages
Like we mentioned earlier, being able to build your credit history in a positive manner is the biggest benefit here. Even though you will start out small in the beginning, if you can keep up with your payments you will reap the rewards as the years pass by. This alone is reason enough to look at all the credit cards for no credit that are available. Over time you could be purchasing a new vehicle or making your mortgage payments with it.
Credit line increases occur anywhere from 3 to 6 months at a time, but it will basically depend on you. The better you are at making your payments the more leverage you will have to get credit increases down the road. Plus you will enjoy lower interest rates as well. There are a plethora of benefits attached to credit cards with no credit, so if you need to start building a good credit history, this is the best place to start.
The Disadvantages
Once you get the opportunity to look over all the credit cards for no credit, the first thing you notice is the qualifications. These cards are only for individuals who have a limited about of credit or none at all. Your FICO must be around 0 to 349 if you plan to use these. If you’re not familiar with FICO it basically just refers to your overall credit score.
Another issue revolving around credit cards for no credit is finding unsecured and secured options. Some companies consider these “second chance” credit cards, which basically means they are secured. If they’re not then you usually have to pay several different fees just to get started. A great example of this is if you’re charged a one time $150 fee, a $100 annual fee, and a $5 a month usage fee.
In the beginning the average credit lines are around $200-$300. Unfortunately, whatever fees you have (outside of the monthly) are added to your card. They usually leave you with $50 of credit, and the idea is to pay this down. These companies make tons of money, and while it’s not the best option for some, it can show that you are willing to build your credit.
Alternatively, if you’re looking to transfer a balance and hold off on interest payments, you can get 0 balance transfer credit cards (very popular).
You Make the Choice
The best thing you can do is research all the options available and compare each one. There are times when you will find companies who are willing to start you out with a lower credit line, but your card will be unsecured and without tons of fees. It takes time, but building your credit is crucial to your abilities in the future.
Credit cards for no credit is the perfect choice for individuals just getting started. Although there are normally fees attached, even if you have to pay them down it will show that you’re willing to work for good credit. This is what credit card companies want to see, and they will reward you with credit line increases down the road.