If you’re just starting out with credit or you have bad credit, an easy-to-get card can get your foot in the door. Secured, student, store and alternative credit cards are fairly easy to be approved for, even if your credit score isn’t great. Here’s more about the easiest credit cards to get, including how to choose one and how to use one to build credit.
[Read: Best Secured Credit Cards.]
What Are Credit Card Approval Requirements?
Credit card companies are required by the CARD Act of 2009 to use certain approval factors to make sure you can pay back what you charge. When you apply for a credit card, the issuer will consider:
— Your income. The issuer will look at your income to find out whether you can afford minimum monthly payments on your new card, along with payments on any debts you may have.
— Your credit score. Your credit score indicates your past performance with credit products. The higher your score, the better, but a bad or nonexistent score won’t necessarily exclude you from all credit cards.
A credit card issuer may also look at your job history, your housing status and other factors when making credit decisions.
“Your credit score is not the sole determining factor,” says Chip Chinery of Chip’s Money Tips, a personal finance blog and podcast. “I’ve been turned down for too many recent inquiries or too many cards.”
You probably won’t have great odds of approval with an issuer if you’ve discharged a debt with that issuer, adds credit expert John Ulzheimer, formerly of Equifax and FICO.
What Credit Score Do You Need to Get a Credit Card?
The credit score you need to get a credit card depends on the card you want. But you could be approved for a card with no credit score or poor credit, which is a score that falls below 580 on the FICO scale.
“A credit card is the easiest credit product to get, other than a payday loan,” Ulzheimer says.
Credit card issuers may recommend a credit range for approval, such as fair or good to excellent. You will need good credit — at least a 670 FICO score or a 661 VantageScore — for many credit cards, especially ones with abundant rewards and benefits.
If your score falls short of good credit, you still have options. Some credit cards are accessible with no credit or scores as low as 300.
Don’t expect the best terms with this type of card. If you’re applying with a low credit score, you may be offered a low credit limit, such as $500, Ulzheimer says.
[Read: Best Credit Cards for Bad Credit.]
What Are the Easiest Cards to Get With Bad Credit or No Credit?
Easy credit cards to get with bad or no credit will generally include secured, student, store and alternative cards. Here’s more about each type:
Secured Credit Cards
A secured credit card is backed by a security deposit, usually equal to your credit limit, that acts as collateral if you can’t pay your bills. The deposit lowers the issuer’s risk and makes the card easier for you to get as long as you have the funds for it.
Consistent, responsible use, including on-time payments, can help you earn a credit line increase. The issuer may eventually offer you an unsecured credit card and return your security deposit.
Popular secured cards include:
— Discover it Secured Credit Card. This card doesn’t require a credit score to apply and has no annual fee. It earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1% back on all other purchases.
— Capital One Platinum Secured Credit Card. You may be approved for this card with a credit score as low as 300. The card charges no annual fee, and you can put down a security deposit as low as $49 to get a $200 initial credit line.
Student Credit Cards
Student credit cards are starter cards to help you build credit. Unlike secured cards, student cards don’t require a security deposit, but they do generally have low limits until you have more experience with credit and more income. Some student cards may earn rewards and offer benefits geared toward beginners, such as easy to earn bonuses and limited fees.
Popular student credit cards include:
— Discover it Student Cash Back. Students without a credit score may qualify for this card with no annual fee. The card earns 5% cash back on quarterly rotating categories and 1% back on all other purchases. It also matches all the cash back you earn at the end of your first year as a cardholder.
— Capital One SavorOne Student Cash Rewards Credit Card. This card is available to students with at least fair credit. You can earn 3% cash back on dining, entertainment, streaming service, and grocery store purchases, plus 8% back on ticket purchases through Vivid Seats. All other card purchases receive 1% cash back.
Store Credit Cards
Retail store cards may have easy approvals to encourage loyalty among customers. Like secured and student cards, expect fairly low credit limits with store cards. You will redeem rewards with one retailer or group of retailers instead of more flexible options, such as cash back or transferable travel rewards. Research cards from stores where you’re likely to get the most value.
Alternative Credit Cards
Alternative credit cards use nontraditional underwriting to determine your creditworthiness. Instead of relying heavily on your credit score for approval, the card issuer may look at your bank account, income, employment history and other information for approval.
Popular alternative credit cards include:
— Petal 2 “Cash Back, No Fees” Visa Credit Card. Petal uses an underwriting model that looks at not only your credit score but also your savings, earnings, expenses and other factors to determine card approval. It offers credit limits from $300 to $10,000 with up to 10% bonus cash back at select merchants and no annual fee.
— Petal 1 “No Annual Fee” Visa Credit Card. This card also uses an alternative underwriting model for card approval. You can earn up to 10% cash back at select merchants and access a $300 to $5,000 credit limit.
How to Choose a Credit Card
Even if you have limited or bad credit, you will likely identify some options to compare before you apply for a card. Weigh these factors to help you choose a credit card that works for you:
— Approval odds. Make sure your credit score lines up with the card’s minimum requirements. See if the issuer offers preapproval, which allows you to check your approval odds without dinging your credit score.
— Fees and deposits. Some credit cards, especially cards marketed to consumers with bad credit or fair credit, may have exceptionally high annual or other fees. Also, consider the cost of any security deposit and whether you can put that money on hold until you can get an unsecured card.
— Credit reporting. If you’re using your credit card to build or rebuild credit, make sure it reports to all three credit bureaus. You may need to call or verify online before you apply.
— Credit limit. As you compare preapproved offers, look at how much access to credit you’ll get. Running up a high balance on a low credit limit is easy to do and raises your credit utilization ratio, which can lower your credit score.
— APR. If you carry a balance, you will pay interest, and the higher your APR, the greater your interest charges. But APR isn’t one of the most important factors, Ulzheimer says, because you’re starting off with failure if you plan to pay credit card interest. Plan to avoid balances on your credit card.
— Rewards and benefits. Earning rewards and taking advantage of cardholder benefits, such as extended warranty coverage and roadside assistance, can offer value. Factors such as card fees and credit reporting are more important, though.
[Read: Best Student Credit Cards.]
How to Build Credit With Your Card
If you’re searching for the easiest credit card to get, chances are you have no credit or bad credit — and building credit should be your goal. When you use an easy-to-get credit card appropriately, you can make gains in your credit history that unlock better credit products, such as rewards credit cards and long-term loans that could improve your finances.
A major factor in using your credit card responsibly is keeping your spending in check to ensure you can make on-time payments and avoid running up an unmanageable balance. If you want to use a card without overspending on it, Chinery says to log on to your account and immediately pay for your purchase after making it.
“You’re using your credit card, but it’s like spending cash,” Chinery says.
Once you get access to credit, build credit with your credit card by:
— Limiting spending. Stay on budget and be sure you can pay off what you charge each month.
— Making on-time payments. Pay your credit card balance by the due date each month for your credit report to reflect a history of on-time payments.
— Maintaining low or no balances. A low credit utilization ratio can help boost your credit score. Be sure to keep balances low or, ideally, pay them off each month. “The byproduct of using credit cards is building a credit history,” Ulzheimer says. “So the next time you apply for a card, your offers should be a bit better.”
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What Affects Your Credit Score?
What Is Considered a Good Credit Score?
What’s the Easiest Credit Card to Get? originally appeared on usnews.com
