Buzz
Imagine you've just started your first job and you're eager to get a credit card, but you either have no credit score or your score is low. What are your options? Fortunately, there are multiple ways to move forward.
First, get a stable income
Having a steady job plays a crucial role in your ability to qualify for a credit card. When you apply, the financial institution will consider both your credit score and income as key factors in the decision-making process.
Having a job isn’t always necessary to qualify for a credit card, but you must prove you can repay the balance at the end of each month. Showing that you have a reliable income is a critical factor in qualifying. Generally, the higher your income, the larger your credit limit is likely to be.
The bank will assess your income and credit history to determine what they are willing to offer you. As Taylor Tepper, a former writer and analyst at Bankrate.com, points out, if you're a first-time credit card applicant, you're unlikely to get one with great rewards. “The card they’ll offer you will probably have a low credit limit, which restricts how much you can spend on it.”
Consider applying for a student credit card
A student credit card can be an excellent starting point for building a good credit score. Be sure to review the annual fees and interest rates before applying. Additionally, check with local credit unions for card options, as smaller banks may offer higher interest rates but are more likely to approve your application.
Consider a secured credit card
A secured credit card works by having you deposit money, which then becomes your credit limit. When selecting a card, be sure to check for application fees, processing fees, and annual fees. Cards with high fees can significantly reduce your available credit limit.
“I personally recommend secured credit cards, particularly for individuals with no substantial credit history—even those with a decent income and a job. I think it’s a great way to enter the credit world without causing harm,” said Tepper.
Although many websites list the top secured credit cards, there are various factors to consider when choosing one. Tepper advises focusing less on reward perks and more on cards with no annual fee and the lowest possible APR. “Look into local credit unions—they often offer lower-fee products with better APRs and no annual fees.”
Think about applying with a cosigner
If you’re under 21, applying with a cosigner is an option to consider. By including a cosigner—such as a parent, spouse, or another household member—you’ll benefit from their solid credit score and history.
Remember that your cosigner will have access to your account and will be able to view your purchases and transactions. This could actually be beneficial to you—your cosigner can help remind you to make timely payments and even offer financial assistance, depending on your relationship with them.
Don’t continue applying if you're not approved
If you're not approved for a student or secured credit card, avoid reapplying, as each application can temporarily lower your credit score.
To increase your chances of approval, research which card aligns with your needs and current financial situation before applying.
It might seem natural to apply for a credit card with the same bank where you have your checking account, but it’s important to consider finding the card that best suits you. “Don’t think in terms of banks—focus on products,” said Tepper. There’s no real benefit in sticking with the same bank from your past; instead, conduct research and select the card that works best for your needs.
If you're not approved, the issuer will send you a notice explaining the reason. 'It likely means that you applied for a card offering too many rewards, something designed for those with higher incomes or a longer credit history,' explained Tepper.
