There are thousands upon thousands of credit cards available to consumers, a dizzying array of choices virtually impossible 
to compare side by side. Airline rewards cards, cash back cards, affinity cards, rebate cards, you name it — you could spend a considerable amount of time comparing offers and then realize that the original offers changed while new ones have sprung up.
If you are someone who never has had credit previously, then getting a Visa or MasterCard can be nearly impossible to do. Both cards are for people who have an established credit history, but there is one way to get these cards even if you have no credit whatsoever. These are what are known as no credit credit cards.
No Credit — What You Can Expect
Without credit, your no credit credit card has certain stipulations that the average credit card doesn’t have including:
- Enrollment fee. To be considered for a no credit credit card, you’ll need to pay a one-time enrollment fee which is usually equal to your annual membership fee.
- Annual membership fee. Expect to pay between $69 and $99 yearly to maintain this card.
- Low credit line. You’ll start off with a low credit line, usually $1000, sometimes a lot less.
- Ultra high interest rate. Most credit cards charge an interest rate of 9 to 18 percent, but your rate will be closer to 24%, even higher. You are considered a greater credit risk, thus the higher rate.
- Closed account fee. Even if you decide to close your credit card account, you could be charged a monthly maintenance fee until your balances are paid off. This fee averages $3 per month on top of your outstanding balance and interest rate charges.
In all, just to get your foot in the door, you’ll have to pay at least $138 for a credit card that offers to you a high interest rate, very low credit line, and other consumer unfriendly features.
There Must Be A Better Way
For consumers desiring to build up credit, there are better ways to achieving that goal besides getting hosed by a no credit credit card deal. These include:
- Store Cards — Some department stores still offer their own charge cards and their credit terms are very relaxed. Usually, all you have to do is show your driver’s license and you’re approved. Make regular purchases and pay off balances in full for six months and you should be able to apply and be approved for a regular Visa or MasterCard.
- Buy A Car — If you can put a significant amount of money down, 20% or more, you could purchase a new car and have the financing company hold your note. You may have to pay a higher interest rate than the average consumer, but by making steady payments on time, your credit history will be built up quickly.
- Personal Loans — Belonging to a credit union can be helpful to building your credit. Consider taking out a small loan, even just $1000 and pay that amount back within three or four months. That activity will show up on your credit report, which will qualify you for a better credit card.
Sure, you could do without a major credit card if had to but if you like the convenience of using plastic and would prefer not to carry around a lot of cash, then a credit card is right for you. Just avoid the no credit credit card — a bad deal for all consumers!
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