Alternatives to Getting Credit Card for No Credit

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Almost everyone nowadays has at least one credit card, so those who want to get credit card for no credit are most likely young people, who aren’t allowed to own one for various reasons. One of these reasons is the new regulation that doesn’t allow people under 21 to obtain a credit card unless someone co-signs for them or they can prove they have sufficient income.

New rules to get credit card for no credit

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Starting 2010, people under 21 have restricted access to credit cards unless they bring proof of sufficient income or a spouse, parent or guardian is willing to co-sign for them. Issuing credit card for no credit when it comes to young individuals has been restricted in order to protect them from getting deep into debt before they graduate from college. Obviously, the co-signers need a good credit card history in order to guarantee for the young person, therefore he or she should implicitly have experience in the good use of credit and provide the young person counsel in regards to the basics of credit card for no credit management.

This is only one approach of the matter. Other experts doubt that this new law is indeed able to encourage financial responsibility among young people, as there is no serious age gap between 18 and 21 and no guarantee that the potential applicant for credit card for no credit is more responsible at 21 than they were at 18.

How to get credit card for no credit

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Most underage people apply for credit cards in four situations:

  • To be able to handle school fees by themselves;
  • In emergency cases;
  • For daily necessities, such as meals at school;
  • Traveling (when their relatives and family live in another city).

Aside from these, there are few situations in which co-signers are willing to support the young individual apply for credit card for no credit and most of those who do are driven by the determination of teaching their children how to handle money, after previously discussing with them the contract details related to minimum payments, various fees and the limits imposed.

Alternatives to credit card for no credit for young people

Not all legal guardians are willing to co-sign on a credit card for no credit, for fear that the underage individual might go too deep into debt before getting the chance of earning enough revenue. With this in mind, they tend to focus on several alternatives:

  1. Charge cards
    These cards are similar to credit cards in many aspects, but there is a major difference between the two of them. While, when getting a credit card, you can make minimum monthly payments, the charge card accounts must be paid in full. In addition, should this be neglected, the cardholder has to pay high late fees and deal with severe restrictions on the use of the charge card.

  2. Debit cards
    Debits cards are one smart alternative to credit card for no credit. However, unlike credit cards that charge from your line of credit, debit cards take money exclusively from your bank account, which eliminates all risks of debt. Setting your teenager his or her own bank account is safer, as it teaches them to spend only the money they actually own, instead of spending potential future revenue.

  3. Prepaid cards
    Prepaid cards are payment cards loaded with your own money instead of borrowed money, similar to debit cards. They can be used anywhere debit and credit cards are accepted, including the Internet or internationally. They eliminate the hassle of credit check and can be a useful tool for teenagers who often tend to spend more than they can afford when using a credit card. Therefore, prepaid cards are also good alternatives to a credit card for no credit, as there is no need for a co-signer to legalize the contract. When you run out of money on your prepaid card, you or your guardian can reload it, using more methods:
    • Through post-office or convenience stores;
    • Transfers from a bank account;
    • Through e-banking.

  4. Secured cards
    They are perfect for minors to establish a good credit history. Rather than apply for a credit card for no credit, many young people would rather use secured cards, which resemble debit cards. When using a secured card, you can only make purchases as long as your card is loaded, instead of borrowing money and overspending. The difference between prepaid cards and secured cards is that, while the former can be loaded using the aforementioned means, the secured card needs to be connected to a deposit made at the issuer company.

  5. How to get credit card for no credit

    Teenagers are not the only ones struggling to get credit card for no credit. In some cases, even adults can encounter the issue of being turned down by banks due to the lack of credit history. Not all teenagers use to borrow money before they come of age. Some of them reach 21 with no credit history. Eventually, most of them need to apply for a credit card.

    Having no credit history is not always a bad thing. Provided that you have a stable income, banks can present you to some options in order to begin establishing your credit history. Panicking and applying to many banks for a credit card has the opposite effect, as every rejection shows up in your new credit history. Instead of trying your luck in more than one place, you should direct your efforts towards negotiating with only one institution.