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Found yourself in a pinch and looking to get a credit card, but you have no credit? Or maybe you’re just starting out and wanting to get yourself going immediately, but you have no credit in order to get that first credit card. Well, many individuals find themselves in one of these scenarios, or something similar, so you are certainly not alone. Credit cards for people with no credit do exist and can be gotten if you know how to go about it.

Credit cards for people with no credit may be able to help individuals re-establish their credit or simply build their credit if they have never had any. Generally, in order to secure a credit card for people with no credit you will be required to provide a cash advance to the institution and your interest rate will be much higher than for credit backed card holders. Also, the credit card limit (the amount of money you can actually charge) will be much lower until you are able to prove yourself and show a history of positive payment activity. When looking for a credit card for people with no credit make sure you do a comparison of the interest rates and any hidden fees they may try to include (such as a yearly membership fee) before deciding on which offer is best for your situation.

The simplest way to build your credit is to acquire a store card, or major credit card by providing a cash advance, and then intelligently using the card for small purchases that you immediately pay back without allowing any interest to build up. After the initial couple of transactions that you pay back while incurring no interest, you then want to make a small purchase that you purposefully don’t pay back and do incur a small interest charge. After this, pay the amount off the next month in full and zero back your balance. Generally, after several months of having these types of transactions you can then call and request an increased spending limit. Banks and lending institutions (and even stores) are wary of increasing limits dramatically and will usually only allow 1 or 2 increases per year in very small amounts. However, you will find over time that you can build a nice line of credit for yourself as long as you continue to show a positive payback history.

Of course for every positive lending institution there is approximately 10-20 scam groups trying to feed off the poor souls who are desperate enough to agree to almost anything to get their hands on a credit card. Credit cards for people with no credit do not magically appear in the form of tens of thousands of dollars readily available, and if you see one like this then run as fast as you can from it because it is a scam waiting to happen. It is important to remember that you should be spending within your means and that if you do this consistently that any proper lending institution will slowly over time grant you the credit you deserve based on your income and credit history. Therefore, prepare to work hard for the first several years to build your credit history up so that you can enjoy the hard work you put into it, versus looking for that magical way of instantly being granted credit. It is important to remember that no lending institution should be willing to provide you with credit that you have no way to payback (or else you run into the nightmare scenario of the economic disaster of late 2007 through 2009).

Credit cards for people with no credit are there and accessible, but work to earn your credit and build a solid credit history and don’t just rely on someone bailing you out by giving you a large amount of credit for apparently no reason (avoid scams). Credit cards for people with no credit are best found through intensive searches and comparing multiples of factors and should not be taken lightly as they are the beginning of the process for building and maintaining a solid credit history.

This Financial Services article was written by Malcolm Young on 9/30/2008

Malcolm Young is a financial services entrepreneur.