Obtaining a credit card as a student with no income in the USA can be challenging, but there are specific options designed to help students build credit. Here are a few types of credit cards and alternatives you might consider:
1. **Student Credit Cards**
These cards are specifically designed for students, often requiring limited or no credit history and offering benefits like cash back on purchases relevant to student life, low or no annual fees, and sometimes even rewards for good grades.
Examples:
- **Discover it® Student Cash Back**: Offers 5% cash back on rotating categories and 1% on all other purchases. It also matches all the cash back earned at the end of the first year.
- **Journey® Student Rewards from Capital One®**: Provides 1% cash back on all purchases, which can increase to 1.25% for paying on time.
2. **Secured Credit Cards**
A secured credit card requires a security deposit, which acts as your credit limit. These are easier to obtain with no income since the deposit reduces the risk for the issuer.
Examples:
- **Capital One® Secured Mastercard®**: Requires a refundable security deposit and offers the chance to increase your credit limit with responsible use.
- **Discover it® Secured**: Requires a security deposit and offers cash back rewards, along with the potential to graduate to an unsecured card with responsible use.
3. **Authorized User**
You can become an authorized user on a parent or guardian's credit card account. This allows you to use the card and build credit history without being the primary account holder.
4. **Credit Builder Loans**
Although not a credit card, a credit builder loan is designed to help build your credit. The loan amount is held in a bank account while you make payments, and once it’s paid off, you get the money and a positive credit history.
5. **Retail Store Credit Cards**
Some retail stores offer credit cards that are easier to qualify for than major credit cards. However, they usually have higher interest rates and can only be used at the issuing store.
Tips for Students:
- **Apply with a Co-Signer**:
Some credit cards allow a co-signer, which can increase your chances of approval. The co-signer will be responsible for the debt if you default.
- **Check Pre-Qualification Offers**:
Some issuers offer pre-qualification checks that do not impact your credit score and can give you an idea of your chances of approval.
- **Maintain Good Financial Habits**:
Always pay your bills on time and keep your credit utilization low. This helps build a good credit score.
Conclusion
Students with no income have several options to start building credit, from student credit cards to secured cards and becoming an authorized user. It’s important to use credit responsibly to build a strong financial foundation for the future.