How to Get Your First Credit Card When You Have No Credit History

Starting with no credit history means you'll need a card designed for people building credit from scratch

If you've never had a credit card, loan, or other account that reports to the credit bureaus, you have no credit score yet — not bad credit, but no score at all. Most standard credit cards won't approve you because the card company has no way to know whether you'll pay them back. Instead, you'll choose between secured cards (which require a cash deposit) and unsecured cards for first-time users (which don't). Both types report your payment history to the credit bureaus, which builds your score over time.

The goal isn't to use these cards forever. Within 6 to 18 months of on-time payments, you'll have enough credit history to move to a standard card with better rewards and lower fees.

Key Takeaways

• Secured credit cards require you to deposit cash upfront, which becomes your credit limit, and they report to credit bureaus just like regular cards.
• Unsecured cards for first-time users don't require a deposit but have higher interest rates and annual fees than secured cards.
• Your payment history — paying on time, every time — matters far more than the card itself when you're building credit from zero.
• After 6 to 18 months of on-time payments, you can request a credit limit increase or move to a standard card with better terms.

How secured credit cards work

A secured card asks you to put down a cash deposit, usually between $200 and $2,500. That deposit sits in a savings account at the card company and becomes your credit limit. If you deposit $500, you get a $500 credit limit. You then use the card like any other — swipe it, pay the bill each month — and the card company reports your payments to Equifax, Experian, and TransUnion, the three major credit bureaus.

The deposit is not a fee. It stays in the account the whole time you hold the card. If you close the account or graduate to an unsecured card, you get the deposit back. The card company keeps it as insurance in case you stop paying your bill, but they're betting you won't.

Secured cards typically have annual fees ranging from $0 to $95, depending on the issuer. Some charge interest on your balance if you don't pay it in full each month, just like a regular card. The interest rate is usually higher than standard cards — often 18% to 24% — because you're a new borrower with no track record.

Unsecured cards for people with no credit

Some card companies issue unsecured cards to first-time users without requiring a deposit. These cards are riskier for the company, so they charge higher annual fees (often $35 to $95) and higher interest rates (often 20% to 30%) than secured cards. You don't put down any money upfront, so there's no deposit to get back later.

The tradeoff is straightforward: you avoid the deposit requirement, but you pay more in fees and interest if you carry a balance. If you can afford to pay your full bill each month, the higher interest rate doesn't matter — you won't be charged any interest. The annual fee, though, you'll pay regardless.

These cards work well if you have $200 to $500 available to spend each month but not $500 to $2,500 sitting in savings for a deposit. They also work if you want to start building credit immediately without waiting to save up a deposit.

Secured vs. unsecured: which one to choose

Choose a secured card if you have $200 to $2,500 in savings you can set aside. Secured cards almost always have lower annual fees and lower interest rates than unsecured cards for first-time users. You'll pay less over time, even though your money is tied up in the deposit. Most people building credit from zero should start here.

Choose an unsecured card if you don't have savings available for a deposit, or if you want to start building credit without locking up cash. You'll pay higher fees and interest rates, but you won't have money sitting in a bank account you can't touch. This makes sense if you're living paycheck to paycheck and need every dollar available.

A third option: some people open a secured card and an unsecured card at the same time. This gives you two accounts reporting to the credit bureaus, which can build your score faster. The downside is two annual fees and two bills to manage. Start with one card if you're new to credit — it's easier to stay on top of payments.

What to look for when comparing cards

Annual fee is the first number to check. A $0 annual fee secured card exists — cards like the Capital One Secured Mastercard and the Discover it Secured Credit Card don't charge one. If a card charges $95 a year, that's $95 you're paying just to hold the card, separate from any interest you might owe. Lower is better.

Interest rate (called the APR, or annual percentage rate) matters only if you plan to carry a balance from month to month. If you pay your full bill each month, the APR doesn't affect you. But if you think you might carry a balance sometimes, a lower APR saves you money. Secured cards typically range from 18% to 24%; unsecured first-time cards range from 20% to 30%.

Credit limit is how much you can spend. Most secured cards match your deposit dollar-for-dollar, so a $300 deposit gives you a $300 limit. Some unsecured first-time cards start you at $300 to $500. A higher limit gives you more flexibility, but it doesn't matter much when you're building credit — you should aim to use only 10% to 30% of your limit anyway (using less helps your credit score).

Reporting to all three credit bureaus matters. Some cards report only to one or two bureaus. You want a card that reports to Equifax, Experian, and TransUnion so your payment history reaches all three. Check the card's website or call customer service to confirm.

How to use your first card to build credit

Opening the card is step one. Using it correctly is what actually builds your credit. Make a small purchase each month — a coffee, a tank of gas, a subscription — and pay the full bill when it arrives. This shows the credit bureaus you can borrow money and pay it back on time, which is what a credit score measures.

Pay on time, every time. A single late payment can drop your score significantly and stay on your credit report for seven years. Set up automatic payments for at least the minimum due, or set a phone reminder for the due date. If you're worried about forgetting, pay the full balance as soon as the charge posts — you don't have to wait for the bill to arrive.

Keep your balance low. Using more than 30% of your credit limit hurts your score, even if you pay on time. If your limit is $500, try to keep your balance under $150. This is called your credit utilization ratio, and it's the second-most important factor in your credit score after payment history.

Don't close the card once you've built credit. Closing it removes the account from your credit history, which can actually lower your score. Instead, keep it open and use it occasionally — one small charge every few months — to show the account is still active.

When to move to a standard credit card

After 6 to 18 months of on-time payments, you'll have enough credit history to move to a standard card. You can request a credit limit increase from your current card company first — many will convert a secured card to an unsecured card and return your deposit. If they won't, you can open a standard card with a different company and keep your first card open in the background.

Standard cards have lower annual fees (often $0 to $50), lower interest rates (often 12% to 20%), and may offer rewards like cash back or points. You won't may have access to for premium cards with high rewards yet, but mid-tier cards become available once you have six months of credit history.

Your credit score at this point will likely be in the 600 to 700 range, depending on how much you've used the card and whether you've had any late payments. That's enough to move forward, though your score will keep climbing as your credit history gets longer.

Frequently Asked Questions

Does opening a credit card hurt my credit score?

Opening a new card causes a small, temporary dip in your score — usually 5 to 10 points — because the card company checks your credit report (called a hard inquiry). This dip recovers within a few months. The benefit of building credit history outweighs this small initial hit.

What if I can't afford the deposit for a secured card?

Start with an unsecured card for first-time users instead. You'll pay higher fees and interest rates, but you won't need to set aside cash. Once you've built some credit history and saved up money, you can open a secured card later if you want a second account.

Can I use my secured card deposit as my credit limit?

Yes — that's how secured cards work. Your deposit becomes your credit limit. If you deposit $500, you can spend up to $500 on the card. The deposit stays in the bank account; you don't spend it directly.

How long does it take to build credit with a credit card?

You'll have a measurable credit score after about three to six months of on-time payments. Your score will keep climbing for years as your credit history gets longer and you add more types of accounts (like a car loan or mortgage). Most people can move to a standard card after 12 to 18 months.

What happens if I miss a payment?

A missed payment is reported to the credit bureaus and stays on your report for seven years. It will significantly lower your score and make it much harder to get approved for other credit. If you miss a payment, contact the card company immediately — many will work with you if you pay within 30 days of the due date.