This fact cannot be denied that with the emergence of credit cards in this world, life has become smoother. It is like a blessing for those who wish to purchase things at the moment and are responsible enough to pay off the bills on the due date. The use of credit cards has increased in recent times and has become one of the major factors in determining an individual’s Credit score. But the people who just want to start their journey with credit cards might find it difficult to get a credit card application approved by the issuer bank because credit history plays a major role in the approval of a credit card application. The card issuing companies are keen to know about your credit history which portrays them your repayment habits, details of all your debts, etc.
But if you are a new user and you haven’t used credit cards before, it can get tough for you to get a credit card issued. Since you are a new user, you might not have a credit history. It gets difficult for the issuer bank to issue a credit card to someone who has no credit history. They check your credit history to check your creditworthiness. You need a credit score of a minimum of 750 to qualify for the best cashback, rewards, etc credit cards in India.
However, credit score or credit history is not the only deciding factor behind the issuance of a credit card. Individuals with no credit history or a bad credit score also get a credit card in their name. Banks consider various other factors as well before giving their verdict on the issuance of the credit card. So you do not have to lose hope if you don’t have a credit history. You might be eligible to get a credit card without a credit history but that card will be a basic card. You need to have a credit history and a good credit score to enjoy the benefits of top-level credit cards.
How to get a credit card with no credit history
An individual with no credit history might face some difficulty in getting a credit card but it is not impossible. The following things can be done to get a credit card with no credit history –
Credit card based on salary statement
Not having a credit history is not the only deciding factor for credit card issuance. A salaried employee, whether working in a public sector or private sector company can apply for a credit card by providing his/her salary slips. He can apply for a credit card with the bank in which his salary gets credited. They might also need to provide an employment letter issued by HR or the company’s letterhead. Based on your salary statement, you can also apply for another bank’s credit card but it will be convenient to apply with the bank in which your salary gets credited as they have all your personal details and information, and your application will be processed quickly.
Pre-approved credit cards
These credit cards are based on the screening done through your account. The banks determines your average monthly balance, your deposits with the bank, your transaction, and many such things. Upon having detailed knowledge about all these, the bank offers you a pre-approved credit card offer. This offer can be reflected in your net banking or you could be informed via e-mail or SMS or any branch official will let you know about the same when you walk into the branch for any transaction. This can also be one of the ways of getting a credit card when you do not have a credit history.
Student Credit Card
Student credit cards can help students start their credit journey and build a credit history. In India, students above the age of 18 years can apply for this card with the respective issuing bank upon providing proof of being a student. These are easy to qualify for as issuers do not require any lengthy documentation for issuing such cards. They typically come with a low credit limit as compared to traditional credit cards considering the fact that the cardholder does not earn. You should be well educated about the pros and cons of using a credit card and also be aware of the importance of paying credit card bills on time otherwise he will end up spoiling his credit score in the initial stages.
Prepaid Credit Cards
Prepaid cards are very similar to traditional credit cards. They work in a simplified manner. The only major difference between a prepaid card and a credit card is that a prepaid card allows its customers to make purchases with the funds available in the card while in the case of a traditional credit card, you borrow money from the issuing bank to pay for your purchases. It is very useful for people who do not have a credit history. The most important benefit of using a prepaid credit card is that you can complete your transactions without worrying about the debt or interest payments in the future. They can prove to be beneficial for those who are not looking for specific features in a credit card.
Add-on Credit Cards
An add-on or a supplementary credit card is another way of getting a credit card without any credit history and can help you in building your credit history as well. You will be eligible to get an add-on card only if you have a primary credit cardholder in your immediate family. The add-on card comes with benefits and features that are similar to the primary card. But the credit limit will now be shared between both the cards. The important point that has to be taken care of is that the add-on cardholder also needs to pay all the due debts on time and in full otherwise the credit score will be negatively affected.
Secured Credit Card
A person with no credit history or credit score can apply for a secured credit card. This is the most simple and easiest way to get a credit card in the absence of credit history. The application process for this credit card is very simple and can be used by an individual to build his credit score. An individual needs to open a fixed deposit with the bank from which he wants to avail of the facility of a secured credit card. The issuing bank, on the basis of the fixed deposit made with the bank, will issue you a secured credit card with a limit equivalent to or lower than the amount of deposit made with the bank. This card has to be used in the same manner in which you use a traditional credit card. You have to pay bills on time for all the transactions done by you using a secured credit card. Any default in the payment will be recovered from the security deposit, that you have kept in the form of a fixed deposit, with the bank.
Check Here: List of Secured Credit Cards
While credit history is a major factor in deciding whether an individual should be issued a credit card or not, it is not the only factor in making such a decision. Although, it is very difficult for an individual with no credit history to get a credit card there are various other ways in which he can obtain a credit card. Not to deny the fact that he will be getting a basic credit card only as he does not have a credit history, but opting for ways such as an add-on credit card, secured credit card, etc can help him build his credit history. In case, an individual with no credit history is a student, he can opt for a student credit card and start using it responsibly. In this way, he can build his own credit score and opt for better credit cards. If an individual wish to obtain the best credit cards, he will have to maintain a strong credit history and keep his credit score well above 750. Any score above 750 will let him enjoy all the features and benefits that the premium credit cards come with.