How to Get Student Credit Cards With No Credit

Are Bad Credit Credit Cards the Only Answer for Students?

Aug 31, 2009 Carol Finch

Having no credit can almost be as bad as having bad credit when it comes to applying for student credit cards. There are, however, ways to get around this problem.

Many students come across a major stumbling block when they try to take out student credit cards when they go to college. The fact that they may not have any history of managing this kind of account before and may never have taken out any other kind of financial product such as a loan could mean that they are in a "no credit" situation. This simply means that their credit record doesn't have any records of financial activity in it. So, what does this mean?

Lenders Don't Necessarily Like "No Credit"

In basic terms, when students apply for a credit card, the card company will credit check them to see how good or bad their credit rating is. Not having any credit rating may be viewed as a negative by many lenders as it means that the company cannot assess students' risk. So, sometimes, having no credit can be just as bad as having bad credit. Many credit card companies nowadays have decided not to give out credit cards for students with no credit history at all because of this perceived risk. So, what are the alternatives?

Alternatives to Student Credit Cards With No Credit

There are ways to get round having no credit and to get student credit cards. These include:

Looking for a specialist card – some card companies will have specialist student credit cards that they will give out in this situation. The interest rates on offer here may be higher due to the increased risk and the card limit itself may be relatively low, at least to start with.
Applying for bad credit credit cards – many companies actually solely specialise in giving out credit cards to people with a bad credit history. Some of these may also be willing to work with consumers with a no credit issue. Again, care needs to be taken here as the interest rates with bad credit cards can be significantly higher than those given to standard student credit cards.
Becoming an authorized user on a parental card – many parents will allow their child to be put on to one of their credit card accounts as an authorized user. This will not involve a credit check so it could be a good solution. Bear in mind that this allows the parent to know exactly what the student is spending and that it is risky for them too. Any spending that their child makes on their account is their responsibility so this kind of solution may need to be managed carefully.
Using prepaid credit card – as an alternative a lot of parents will give their child money to set up a prepaid credit card. Here cash is loaded on to the card and the student can use it, like a regular credit card, as they need to. They can't spend more than is on the card, but this can be useful for emergency situations.

Think Hard About the Best Student Credit Card Solutions

Some people will take the bad credit credit card route here, but students would be wise to consider other options and to discuss their choices with their parents before making their decision. A bad credit card may be easier to get than student credit cards in some cases, but they will usually charge extremely high interest rates. If there is any chance that a student will be building up debts on a credit card, then this could cost them a lot of money in the future. Looking at online credit card comparison sites can be a useful thing to do to check rates and terms.

The copyright of the article How to Get Student Credit Cards With No Credit in Campus Life is owned by Carol Finch. Permission to republish How to Get Student Credit Cards With No Credit in print or online must be granted by the author in writing.

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