How to Get a Credit Card with No Credit History

When applying for credit cards, first-time borrowers can feel like first-time job seekers. Credit card providers will use your credit history to determine your creditworthiness, just like possible employers will ask about work history. Without any experience, employers often won’t take a chance on a first-time employee. You can use Fiona to compare personalized credit card offers and find the right one to start your credit history!

Best of all, if you’re a borrower with no credit history, that means you have the opportunity to start your credit life on the right foot. If you start your financial journey by paying your debts and bills on time and even early, you can demonstrate to future lenders what a trustworthy borrower you are.

There are two easy ways to build credit. The first is applying for and responsibly using a secured credit card. The second is using that credit card responsibly! Use Fiona below to get matched with a credit card, and then let's dive in about how to use it responsibly.

One of the most critical parts of responsibly using a credit card is understanding how it works. Many first-time borrowers don’t completely understand how interest rates and credit utilization affect their overall debt.

If possible, pay off your balance each month. Any amount of credit on your card after the billing cycle will be charged interest. Basically, if you pay your credit card in full and on time, you won’t be charged any interest for using your credit. However, if you do not pay off your card in full every month, the leftover balance is subject to interest charges, which are then added to your overall balance.

What can be confusing is that the minimum required payment is not the same as your credit balance. Some borrowers see an email or a bill for a minimum of $50, not realizing that the overall balance of the card could be $100 or more. If you only the $50 minimum and leave $50 of credit on your account when the billing cycle closes, that $50 gets charged by your interest rate.

If you’ve selected a credit card with a starting period of 0% interest, be sure to mark your calendar for when the full APR kicks in. Some borrowers successfully take advantage of the 0% interest period to pay off debt without worrying about interest, but once the period closes a high interest rate can kick in and wind up costing you more money overall. 

On top of the interest rates, credit reports monitor your credit utilization rate. This is the percentage of debt you have relative to your credit line. So, if your credit line is $1,000 and your credit card has a balance of $100, your credit utilization is 10%. Keep your credit utilization under 30% to make sure your credit score stays healthy. 

Now that you know how to use your credit card responsibly, get matched with one! You can use Fiona today to get matched with the credit card that works best for you. Once you get your credit card, following the suggestions above will ensure you’re building a healthy and positive credit history, setting you up in the future for bigger purchases like homes with a mortgage or car leases.