Credit Cards for beginner with no credit history (2017 Update)

boboo      2016-12-05     2018-06-21 9 Comments

Photo credit: classicexhibits.com

When you first have your SSN with no credit history, you should definitely start building your credit history. Yet, you are probably not qualified for most credit cards with best rewards. But don』t be worry, there are some great rewards cards that are designed for people (especially students) with no credit history. Here are the most recommended credit cards for newbies with no credit history. (Note: things changed a lot with credit cards in recent years, please refer to this articles updated in 2017. Don’t rely on articles that are not updated in 2017.) 

1. Discover It

Application Link

• Discover it. Through this link, you might see the application page for either Discover it or Discover it for Students. Actually these two are equivalent: no matter which application page do you use, if you choose 「College Student」 as employ status, you will get Discover it for Students; if you choose other employ status, you will get regular version Discover it.

Features

1. Earn $50 after first purchase within 3 months. You have to use our link or you friend』s referral link to get the $50, the official application link has no sign-up bonus.
2. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter, 1% cash back on all other purchases. You need to activate the 5% cash back beforehand each quarter. New categories every quarter. The 5% bonus categories for 2015 are:
3. Double Cash Back: Double all cash back you』ve earned at the end of your first year, including the 5% bonus category, sign-up bonus, Discover Deals, refer bonus! The double part will be credited to you after the first year.
4. Good Student Reward: Earn $20 each year when you get at least a 3.0 GPA, up to 5 years.
5. No credit history needed.
6. There are some pretty good discounts if you shop online through Discover Deals, such as 5% cash back at Apple Store.
7. Refer a friend: You can earn $50 for every approved account you refer, up to a maximum of 10 approved referrals ($500) per calendar year. Considering the Double Cash Back promotion in the first year, you can actually get $100 for every approved referral, and up to a maximum of $1000 per calendar year!
8. No foreign transaction fee.
9. No annual fee.

Disadvantages

1. Only first $1,500 purchases per quarter on bonus categories can earn 5% cash back, after that you can only earn 1% cash back.
2. This is a Discover card, which is not as widely accepted as Visa or MasterCard.
3. Credit limit for Discover it for Students may be VERY low, and it』s hard to get the limit increased.
4. 5% bonus categories may not be correctly identified abroad when using some partner networks like UnionPay.

Summary

This card is a no-brainer choice. Everyone should get it for its 5% cash back in rotating categories and no annual fee. Besides, Discover Deals sometimes have pretty good discounts.

2. BoA Cash Rewards

Application Link

• If it’s your first credit card, please apply at BoA branch.

Features

1. Earn $150 after spending $500 in first 3 months. Note that you can only get this sign-up bonus if you apply online, you won』t get it if applying in branch. The highest offer is $200 for the MLB/NEA/MTA versions.
2. Earn 3% cash back on gas, and 2% cash back at grocery stores and wholesale clubs (Costco/Sam』s Club) for the first $2,500 in combined grocery stores and gas purchases each quarter, 1% cash back on other purchases.
3. Earn an additional 10% bonus points if you have a regular Bank of America checking or saving account; an additional 25% bonus points if you have a Gold tier BoA bank account or investment account ($20k or more in balance); 50% if Platinum tier ($50k or more in balance); 75% if Platinum Honors tier ($100k or more in balance).
4. No credit history needed, as long as you have certain amount of deposit in Bank of America (BoA) Checking Account. If you have no credit history, you need to go to the branch to apply.
5. No annual fee.

Disadvantages

1. Foreign Transaction Fee.

Summary

The reward rate of BoA Cash Rewards Card is not high, but it』s still worth applying if you have zero or very limited credit history. You have to go to a branch to apply if you do not have any credit history, note that you will not get any sign-up bonus applying in branch, but don』t care about the bonus for your first credit card. You could switch to other credit cards with better rewards once you have enough credit history. Now it is a suitable card at Costco, but I still don』t recommend to apply for this card purely for this reason.

3. Deserve Edu

Application Link

• Deserve Edu

Features

1. This is a credit card that is specially designed for students. International students can also apply even without a SSN and without any credit history! (See official FAQ) For those international students who cannot obtain a SSN in a short time, this card is a great choice as the first credit card.
2. This card is very friendly to foreigners: F1, M1, J1 visa holders are eligible to apply. If you are not a green card holder nor US citizen, then you need to provide the following information and documents:
   • University and major.
   • An electronic copy of your passport and US Visa.
   • An electronic copy of your Form I-20 / Form DS-2019.
   • Bank account information or the latest US bank statements (For newcomers: when you have a bank account in the US, you will receive a bank statement every month.)
3. Green card holders or US citizens will need to provide the SSN, just like applying for other credit cards in the market.
4. You can indeed build your credit history with this card. They will report the new account to 2 of the 3 credit bureaus after about 3 months of use: Experian (EX) and TransUnion (TU). For most people, the most important credit report is from EX, so as long as you have a credit history in EX you are fine. A lot of people mistakenly think that you cannot build credit history without SSN, but this is completely wrong. Credit bureaus can use your name, date of birth and address as identifiers, so you can actually build your credit history even without a SSN. After you obtain your SSN, the previous credit history will be tracked and appended. Your credit history does not start from the day you obtain your SSN; instead, it starts from the day you first borrow money (such as applying for a credit card).
5. If you use our application link to apply, you can earn $30 sign-up bonus after the first purchase. Offer ends on 2017.11.30.
6. Deserve will reimburse cardholders the cost of their Amazon Prime Student ($49.99 value) for one year.
7. Earn 1% cashback on all purchases!
8. No foreign transaction fee.
9. No annual fee.
10. As a credit card for beginners, the credit limit can be as high as $5,000.
11. Deserve (formerly SelfScore) is not a bank, it partners with Celtic Bank in issuing this credit card, so there should be no concerns about the credit card.

Disadvantages

1. It’s currently not clear whether people holding dependent visas (such as F2 visa) can apply for this credit card.

Summary

Deserve is the new rebranded name from SelfScore, and this card is basically identical to the previous SelfScore Achieve. Deserve is a fintech company focusing on students, and is especially friendly to foreigners. I think this is a fantastic beginner’s card for those international undergraduate and graduate students without SSN (of course, you can also apply for this card if you have a SSN). For those who have SSN, you can apply for Discover it as your first credit card; however, the international undergrads and master’s students will not obtain a SSN in a short time, so the way to get a credit card is complicated.

Here are the major options of the first credit card for those who do not have SSN and do not have any credit history:

• Go to a BoA branch and apply for BoA Cash Rewards or BoA Travel Rewards. You need to have sufficient amount of money depositing in BoA, we usually think >$10,000 is OK. Data points are conflicting, some people can success but some people can not.
• Find a friend and ask him/her to add you as an authorized user, and after you build credit history with it, you can continue to apply for other credit cards you can get without SSN (mainly AmEx). Note that not all banks let you add an authorized user without providing his/her SSN. The drawback is that you need to own a debt of gratitude.
• Deserve Edu. The Deserve cards are the only credit cards specially designed for internationals students, and has an easy online application process.
• Go to a Citi branch and apply for Citi ThankYou Preferred for College Students. We DO NOT recommend to apply for this card, because it will affect the sign-up bonuses of other Citi ThankYou Points (TYP) cards!
• Secured credit cards from major banks. These secured credit cards require security deposit, and they usually have annual fee. So basically secured credit card is the last choice, if you can get one of those in the above choices, you shouldn’t apply for a secured credit card.

You can compare these options by yourself and find the best suit for you! Let’s start the journey of credit cards!

Conclusion

*Note: If you get approved for the Citi ThankYou Preferred for College Student, you will lose the opportunity to apply for Citi Prestige, Citi ThankYou Premier, or Citi ThankYou Preferred within 24 months.

Discover it card is a no-brainer choice. Everyone should get it for its 5% cash back in rotating categories and no annual fee. We strongly recommend applying for Discover it as your first credit card if you have an SSN. If you get denied unfortunately, or if you don’t have an SSN, then you should try BoA Cash Rewards or Deserve Edu. Don’t be too concerning about signup bonus for your first credit card, it already means a lot if you get approved since you can start building your credit history.

You can compare these options by yourself and find the best suit for you! Let』s start the journey of credit cards!

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