Perfect Ways To Obtain A Credit Card With No Credit
How do you build credit when you have no credit? There’s no question that you require credit, whether good or bad, for almost everything from renting an apartment to getting a cell phone. Particularly in these harsh economic times, people are ever-more dependent on credit cards to pay bills and make purchases. Some recent changes in legislation and innovative new credit cards now offer more options and added protection for those just establishing their credit.
People with no credit usually include students and new immigrants who have never taken out a loan and have no credit cards at all with them. Although their slate is technically clean, in the case of credit history none is worse than bad. It is always possible to restore bad credit with time and regular payments. However, without any credit history, financial institutions have no way to gauge your ability to repay loans or to pay bills on time. Rest assured, though, there are credit cards for people with no credit.
For many people, college is the time to acquire that first credit card. Financial institutions formerly camped out in tents and booths across campus offering low-interest rates and added perks like free money or electronic devices. However, since the CARD Act of 2009, strict limitations have been enforced on marketing and issuing credit cards to young people. The law now requires any person under the age of 21 who is not an authorized user on his or her parents’ credit card accounts to provide proof of income to repay loans or to have an adult co-signer.
These regulations were established to reduce predatory finance companies from targeting impressionable, cash-strapped students. So far, it seems that the law is a success because, according to a recent report from Credit.com, based on a study from the Federal Reserve, the total number of new credit card accounts opened by students decreased by 17 percent from 2009 to 2010.
The easiest way to build up credit and reap the benefits of a credit card is to apply for a prepaid card. These cards do not require credit history, and they can be used just like a regular credit card for on-line purchases and bill payments. Users also benefit from incentives like cash-back offers. Best of all, you do not have to worry about late fees or exceeding your credit limit.