How can a student with no income get a credit card?
The old expression, “Everyone has to start somewhere” is true for many things, and it is absolutely true when it comes to building a financial history and credit score. Indeed, millions of Americans get their first credit card when they are students, or when they have no income. How can this happen?
Thankfully, there are many ways that a student – even one without any income – can build credit and get a credit score.
One of the more obvious ways is to get a credit card, in their own name, on the account of someone else, such as their parents. This will allow the individual to build their own line of credit, but ultimately, their parents are still responsible for any debt they incur. In many cases, this is an ideal way for an individual to get their own credit card and start to build a positive credit history.
Another option is a secured credit card. These types of cards require a security deposit of some sort, similar to the kind you would make if you were moving into a new apartment for the first time. The owner of the card can then use the credit card up to a certain percentage of their deposit. This way, even if the individual in question doesn’t pay their bills, the deposit can be used to ensure that the credit card company is made financially whole. These are ideal for situations where someone has no credit or bad credit. Furthermore, responsible use of a secured credit card can allow someone to build a positive credit history and eventually get a regular credit card. It should be noted that secured credit cards are not cheap or free. Indeed, they usually come with higher interest rates, which are necessary to offset the risk to the credit card company. They may also come with annual membership fees, and all of this is in addition to the deposit that is required.
It is also worth noting that there are a series of credit cards available specifically for students, even those with no income. These credit cards typically come with a variety of benefits, including access to one’s credit score and the ability to get the first late payment forgiven. As you can imagine, they are designed to hook students into certain brands and have them become lifetime customers of certain credit card companies. They usually don’t have annual fees and have limited general benefits, like points and perks. They also usually have smaller annual limits and higher APRs. Since these cards are geared towards students, they are usually relatively easy to obtain, even with limited or no credit history.
At the end of the day, despite the relatively limited options, students still have plenty of opportunities to obtain a credit card, even if they don’t have another adult to open an account for them or cosign their account. These opportunities just require a bit of digging to find