Getting a No Credit Credit Card

by Tracy Murray-Crouch

Even in what is becoming a very tight lending market, it’s still not that hard to get a no credit credit card. Mastercard and Visa, through all their licensed lenders, offer a variety of unsecured, prepaid, and secured credit cards with no credit for people who are either working to establish or repair their credit.

There are even times when one licensee will offer basically identical cards, but one happens to be Visa and the other Mastercard. For example, First Premier Bank offers the Centennial Visa or Mastercard designed specifically for people with no credit. They’re offering benefits such as:

  • 24 hour account access via telephone (but no mention of internet account access until I dug deeper into the terms; then I found out you could pay $3.95 one time fee to have online account access)
  • Low APR on purchases (further investigation revealed that it’s 9.9% – not great, but I’ve seen much worse)
  • Monthly reporting to four major credit agencies (this is the big one – you need them to talk to the credit bureaus if you want to see your credit score steadily climb)
  • A response to your application within 60 seconds (actually this is very fast, so at least you’ll no right away if you’re approved or not)

I had to dig a little deeper to find the fees associated with the card, and I found them to be fairly standard compared to what you’d see with most credit cards with no credit. Right up front you’re going to pay an account setup fee of $29.00, a “program fee” of $95, and an annual fee of $48. They put all those charges on your card immediately, and you’ll begin making payments and accruing interest on that balance from day one.

That can be pretty annoying, but it’s not uncommon in the lending world. It’s almost like this card provider is charging closing costs like you’d have on a home loan, and rolling the closing costs right onto the balance. Maybe the way to go with a card like this is to save up a couple hundred bucks and think of it as ‘buying’ the credit card, so you can pay off that initial balance immediately.

A couple of fees you might not think of beforehand (since you might be new to the credit world, looking for a credit card with no credit check and all that), are the over-limit fee and the late fee. They’re each $29, so you want to avoid those at all cost.

This card offer is pretty typical. It’s expensive, but if you use it right it gets the job done and helps you improve your credit score.

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