The best way to build your credit is by getting approved for credit cards. But, hey! How do you get approved for credit cards without having credit? That’s like saying “Oh, you don’t have money? Buy a business, and then you’ll have money.” Yoo-hoo! How do I BUY that business?
Here are some tricks to help you get approved for your first credit card.
1. Open a Chase bank account
If you open a Chase checking account and deposit $250 you can get approved for the card_name. You can apply for the card immediately after you open the checking account. The $250 needs to already be in the account or deposited within 48 hours of the application.
2. Piggybacking credit
Another trick for getting approved for your first credit card is by being added as an authorized user on someone’s credit card. It can be your parent’s, spouse’s, or friend’s card.
It works as follows:
Once you’re added as an authorized user on someone else’s account, the credit card issuer will report the credit card on your credit report with all the credit history. So let’s say you’re added as an authorized user to a credit card account that was opened 10 years ago. Your credit report will suddenly show that you have already built credit for 10 years! This may seem funny, but it’s a fact!
Not every bank will report an authorized user to the credit bureau, and not all report the complete history (back dates).
Check out this list (and make sure to provide the bank the authorized user’s social security number):
Reports | Back Dates | |
Amex | yes | no |
Barclay | yes | yes |
Bank of America | yes | yes |
Chase | Sometimes | yes |
Citi | yes | yes |
Capital One | yes | yes |
Discover | yes | yes |
HSBC | no | no |
US Bank | yes | yes |
The best is to get yourself added as an authorized user to one or two credit cards that are open for a minimum of two years, and have a perfect payment history. The authorized user will show on your report after about 30 days (you can check on Credit Karma and see when it shows already).
And then you can get approved for a low-end credit card. Try a Discover It or a card_name, as my past experience was that they are more likely to approve you.
Keep in mind that the same way the good credit history gets reported, so does the bad. Therefore, do not add yourself as an authorized user to any card that has any delinquent payments or high balances. It will do more harm than good.
When being added as an authorized user, try to use your own address- not the primary cardholder’s address – as the address used will be the address that will show up on your credit report.
3. Secured credit card
Many banks offer you the option of a secure credit card. The way a secured card works is that the bank will ask you for a deposit that they will hold on to just in case you fail to make your payments in time. So let’s see if you give the bank a deposit of $500 they will approve you for a credit card with a $500 limit. So, basically, they are lending you your own money. (Feels good, doesn’t it?)
But before you choose a secured credit card, look for the following few things
The fees
Some secured credit cards charge annual fees (and possible additional fees as well). Look for a secured card that doesn’t.
Make sure it will help
Some secured cards don’t report your account activity to all three credit bureaus. Even if you use the card responsibly, it may not help you build your credit history.
Consider the source
Some of the major secured credit card issues, like Capital One and Discover, offer secured credit cards. But most secured cards are issued by banks you may have never heard of. Be sure to do your research to make sure the issuer is trustworthy.
Look for bonus features
Some secured credit cards offer additional features. For example, free FICO scores. Some cards also offer a chance to earn rewards or to pay a reduced security deposit.
You can check out the best secured credit card here.
4. Store cards
A store card is a credit card offered by a store or brand. Think Gap, Kohl’s, Home Depot, etc. The credit card is designed to be used for purchases within the store. Store cards often come with many store-related perks, like discounts, bonus points on store purchases, free returns, and more.
Many store credit cards can be used just like any other credit card- for purchases outside of the store.
Store cards are usually easy to get approved for, even for newcomers to credit cards. But, you will usually only get approved with a low credit limit (sometimes as low as $200), and they often come with a very high APR on balances.
Store cards can be a good start. But keep in mind that store cards are not counted by FICO as a regular credit card, and in the long run, will not help build credit as much as a regular credit card. So after having the store card for a few months, make sure to get yourself approved for one or two typical credit cards as well.
5. Authorized user on Amex card
Another trick to get approved for your first card is by pushing your way into Amex. How is that done?
First, get someone to add you as an authorized user to one of their Amex credit cards. Then, after about 3 months, apply for an Amex credit card on your own and you will have a great chance of getting approved (my best experience is usually with the Delta Gold card). The good thing with Amex is that for personal credit cards, they only pull your credit if they approve you so it does not hurt trying.
6. Joint card
This option allows you to have someone with a great credit score to cosign your card. This option is probably best only if all the options above fail (I don’t think this will happen. But, hey! You just never know).
As of this writing, Only US Bank, Bank Of America, and the Apple Card offer the option of getting a joint credit card account.
Great Post!
Thanks Dave!
Great and very informational!!
Was looking for a site like this for a long time now, will be using this for all my cc needs from now on!! Thanks Sam!
I am happy that you are enjoying our content. We will keep it coming!
Great website!!
Thank you for joining!
Very good post!
Thank you all for joining
Great post very informational, Clear writing and simple, easy-to-follow
I love your sense of humor SAM!
Cant wait for the next post [I wish you would’ve posed more often ]
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It’s hard to find educated people on this subject, but you seem like you know what you’re talking about!
Thanks
Thanks a lot!
No info for UK !!