Credit cards are a convenient way to manage finances, allowing users to repay the borrowed amount later. With various rewards and benefits offered by different issuers, credit cards can provide value beyond convenience, such as cashback on purchases, travel insurance, or points redeemable for goods and services.  However, to get your hands on a credit card, there’s one crucial thing you need: a credit history. If you’ve never borrowed money before, you might not have a credit history, making getting a credit card challenging. But don’t worry; some great credit card options are still available for people just starting out.

Best Credit Cards to Avail with Zero History

Credit history is like a report card of how you’ve handled borrowing and repaying the money over time. If you’ve borrowed money in the past and paid it back on time, you’ll likely have a good credit history. This shows banks and lenders that you’re good at managing your money, and they can trust you to pay back what you borrow. If you’ve never borrowed money before or had trouble paying back loans on time, your credit history might not look as strong. This can make it a bit harder to borrow money in the future, as lenders might be unsure if they can count on you to repay them. Your credit history helps lenders decide how risky it is to lend you money. Let’s jump into the best credit cards for those with zero credit history and how they can help you build a solid financial foundation.

Credit Card with No Credit Score

Through Fixed Deposits

Fixed deposit credit cards are a good option for people just starting to build their credit history, especially if you don’t have a credit history yet. When you put a certain amount of money into a fixed deposit with a bank, the money acts as security for the bank. In return, the bank gives you a card with a credit limit, usually a percentage of your fixed deposit amount. This way, you can use a credit card, build your credit score by making timely payments, and still earn interest on your deposit. It’s a safe and effective way to enter the world of credit. AU Nomo, OneCard Metal, and Magnet FD Backet Credit Card are the best examples of FD-backed credit cards.

With Salaried Account

A salary account is a particular bank account where your workplace deposits your pay. Basically, companies arrange with banks to open these accounts for their workers. This way, instead of getting your salary in cash or depositing a check, your pay automatically goes into this account each month. The company decides on a specific day to transfer everyone’s salaries from its account to the employees’ salary accounts. So, it’s a convenient setup where your earnings wait safely in the bank, ready for you to use.

Pre-Approved Credit Card Offers

Pre-approved credit card offers are like special invitations from banks. They tell you that you’re approved for a credit card without you having to apply first. Banks look at your financial history and decide you might be a good customer. So, they send these offers hoping you’ll choose their card. It’s a way for banks to attract new customers by offering them credit cards based on their financial activities and history. Getting a pre-approved offer can be exciting because it means you’re recognized as financially responsible.

Add-on Credit Cards

Add-on credit cards are extra cards you can get based on someone else’s credit card, usually a family member like a parent or spouse. When someone has a credit card, they can request additional cards linked to their account for you to use. This is great because it lets you enjoy the same benefits and perks as the main cardholder’s card, like rewards or cash back, without needing your own credit history. The spending limit on your card is the same as that of the primary cardholder. It’s a simple way to start using a credit card and build your credit score.

Credit Cards Against Savings Account

A credit card against a savings account is convenient for those without a credit score. You deposit a high amount of money into your savings account to obtain this type of credit card. The bank then issues you a credit card, with the credit limit typically based on the deposited amount. This method allows you to use a credit card for purchases and build your credit history, all while your deposit remains in the savings account, often earning interest. It’s a safe and straightforward way to enter the world of credit without needing a prior credit history.

What Are the Advantages of Having a Rich Credit History?

  • Easier Approval for Loans and Credit Cards: With a strong credit history, banks and lenders are more likely to approve your applications for loans and credit cards.
  • Lower Interest Rates: A good credit history often qualifies you for lower interest rates on loans and credit cards, saving you money over time.
  • Higher Credit Limits: Lenders are more comfortable offering higher credit limits to individuals with a proven track record of managing their credit well.
  • Better Loan Terms: In addition to lower interest rates, you might also receive more favorable loan terms, such as longer repayment periods.
  • Access to Premium Credit Cards: A rich credit history can unlock access to credit cards with better rewards, cashback, and benefits.
  • Easier Approval for Rentals and Housing: Landlords often check credit histories to screen potential tenants. A good credit score can make it easier to secure a rental property.
  • Better Insurance Rates: Some insurance companies use credit scores to determine insurance premiums. A higher score could mean lower premiums.
  • More Negotiating Power: A strong credit history gives you the leverage to negotiate lower interest rates or better terms on loans and credit lines.
  • Financial Security and Peace of Mind: Knowing you have a good credit history can provide financial security and confidence in your ability to manage finances effectively.

Bottom Line

If you’re starting your financial journey without a credit history, it might seem challenging, but it’s not impossible. There are different ways to build a solid credit foundation, such as fixed deposit credit cards, salaried accounts, pre-approved offers, add-on credit cards, and credit cards against savings accounts. These options help you start with credit and establish a strong credit history. Starting with the right credit card is a crucial step in managing your finances wisely and securing a financially stable future. Remember, every timely payment and responsible credit decision brings you closer to achieving a rich credit history.

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