Building a solid financial foundation starts with having access to credit, but what do you do when you don’t have a credit score? Getting your first credit card is a crucial step toward establishing and improving your credit.
This article offers practical advice and easy-to-follow tips to help you navigate the credit card application process, even if you’re starting with no credit history. Let’s explore how you can take control of your finances and unlock new opportunities today.
How to Get a Credit Card Without a CIBIL Score?
For individuals who either have no CIBIL score or possess a low one, obtaining a standard credit card can be challenging. However, it’s not an impossible feat. Here are several effective methods to help you secure your first credit card and begin building your credit history:
- Apply for a Secured Credit Card
A secured credit card is one of the most straightforward and accessible options for those without a CIBIL score. Unlike regular credit cards, secured cards require you to provide collateral in the form of a fixed deposit. Here’s how it works:
– Fixed Deposit: Open a fixed deposit account with the bank from which you wish to obtain the secured credit card. The amount you deposit typically ranges from ₹10,000 to ₹1,00,000, depending on the bank’s requirements.
– Credit Limit: Your credit limit will generally be between 50% to 100% of your deposited amount.
– Building Credit: By using the secured credit card responsibly—making timely payments and keeping your balance low—you can gradually build or improve your CIBIL score. - Get an Add-On (Supplementary) Credit Card
Another effective way to establish your credit history is by obtaining an add-on or supplementary credit card. This option is available if you have a primary credit cardholder in your family, such as a parent or spouse. Key points include:
– Shared Credit Limit: The overall credit limit is shared between the primary cardholder and the add-on cardholder.
– Similar Benefits: The add-on card offers the same benefits and features as the primary card.
– Emergency Use: An add-on card provides additional financial flexibility, especially during emergencies. - Obtain a Credit Card Linked to a Savings Account
Some major banks offer credit cards that are linked to your savings account. To qualify for such a credit card:
– Savings Account Balance: Maintain a minimum balance or deposit a specific amount in your savings account.
– Credit Card Issuance: Based on the balance in your savings account, the bank will issue you a credit card.
– Credit Building: Regular usage and timely repayments on this credit card can help you build your CIBIL score, making it easier to qualify for regular credit cards in the future. - Use a Prepaid Credit Card
Prepaid credit cards are another viable option for individuals without a CIBIL score or with a poor credit history. These cards function similarly to regular credit cards but require you to preload funds before use:
– Loading Funds: Deposit a specific amount of money onto the prepaid card.
– Usage: Use the card for purchases up to the loaded amount, just like a standard credit card.
– Transition to Regular Credit: While prepaid cards do not directly impact your credit score, responsible usage can help you transition to a regular credit card once your credit history improves.
Read More: How to get Home Loan without Credit Score
Types of Credit Cards Without a Credit Score
If you’re looking to get your first credit card but don’t have a credit score, you still have options. Several types of credit cards are available that don’t require a credit score for approval. These cards are perfect for people new to credit or with little to no credit history.
Let’s take a look at the types of credit cards that can help you build your credit in India.
| Type of Card | Description | Examples in India |
|---|---|---|
| Secured Credit Cards | A secured credit card requires a deposit that becomes your credit limit. For instance, a ₹20,000 deposit sets a ₹20,000 limit. This deposit secures the bank in case of non-payment. | Axis Bank Secure Credit Card, HDFC Bank Secure Credit Card |
| Prepaid Credit Cards | These are not traditional credit cards but allow you to load funds and spend only that amount, ideal as they do not require a credit score. | SBI Global Debit Card, ICICI Bank Prepaid Cards |
| Student Credit Cards | Designed for students with minimal or no credit history, these cards offer a way to start building credit early with typically lower credit limits. | SBI Student Advantage Card |
| Credit Cards for First-Time Users | Targeted at first-time applicants, these cards often have simple eligibility criteria focused on basic income and employment details rather than credit history. | ICICI Bank First Credit Card, Kotak Mahindra Bank First Credit Card |
Benefits of Getting a Credit Card Without a Credit Score
Below are the mentioned benefits of getting a credit card without a credit score
- Build Credit History: Establish a positive credit history with responsible use.
- Flexibility and Convenience: Simplify payments and manage cashless transactions easily.
- Rewards and Discounts: Earn cashback, discounts, and loyalty points on purchases.
- Emergency Support: Serve as a financial safety net during unexpected expenses.
- Control Over Spending: Manage spending better with lower credit limits on beginner cards.
Read More: Impact of Minimum Amount in Credit Card on CIBIL Score
Challenges of Getting a Credit Card Without a Credit Score
- Lower Credit Limit: Cards often have smaller limits due to the lack of credit history to assess risk, limiting large purchases.
- Higher Interest Rates: Unsecured beginner cards typically charge higher interest, increasing costs if you carry a balance. Watch for hidden fees on prepaid cards.
- Security Deposit for Secured Cards: Secured cards require a deposit as collateral, which can tie up funds, not ideal for those who prefer liquidity.
- Limited Features: These cards usually lack the perks like cashback, reward points, or attractive discounts found in regular credit cards.
How Can Credit Cards Help You Build Your Credit Score?
Using a credit card for the first time can effectively establish and improve your credit history. Here’s how:
Pay On Time
Always pay your credit card bill by the due date. Avoiding late payments and settling the full balance each month prevents high interest charges and debt buildup. Timely payments enhance your credit score and demonstrate financial responsibility to lenders.
Manage Credit Utilization
Keep your credit card usage below 30% of your available credit limit. If you need more credit, request a limit increase from your issuer. Maintaining a low credit utilization ratio shows that you use credit wisely, which positively impacts your credit score.
Use Multiple Cards Strategically
Having multiple credit cards can be beneficial if managed correctly. Avoid having too many cards, which can appear risky to lenders. Instead, use each card responsibly and maintain a good credit-to-limit ratio. Properly managing multiple cards can strengthen your credit history without negatively affecting your score.
Also Read: 12-Month Roadmap to Strengthen Your Credit Score
Conclusion
Getting your first credit card without a credit score can be both empowering and challenging. It allows those without a credit history to start building one through secured and prepaid cards, which help them qualify for traditional credit cards later. However, these options come with drawbacks such as lower limits, higher interest rates, and fewer perks.
Additionally, secured cards require a deposit. It’s important to choose a card that matches your financial goals and to manage it responsibly, as timely payments are crucial for building a positive credit history.
Frequently Asked Questions
Yes, you can get a credit card without a credit score by applying for secured or prepaid cards.
A secured credit card requires a deposit as collateral, which becomes your credit limit.
Using a secured or prepaid credit card responsibly can help you build credit over time.
No, you load money onto a prepaid card in advance. It’s not a loan, so no deposit is required.
Yes, unsecured cards often have higher interest rates compared to regular cards.
Some secured or prepaid cards offer rewards like cashback or points on purchases.
Look for cards with low fees, reasonable limits, and features that suit your needs, like cashback or travel rewards.
It can be easier to get a secured or prepaid card, as they don’t require a credit score.
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