You can get a credit card with no credit history, but you will need to start with a secured card or a card designed for people building credit
A credit card company wants proof that you will pay them back. If you have no credit history, you have no proof yet. A secured credit card solves this by requiring you to deposit cash upfront — usually $200 to $2,500 — which becomes your credit limit. You use the card like any other card, and after 12 to 24 months of on-time payments, the company converts it to a regular unsecured card and returns your deposit.
The alternative is an unsecured card for people building credit. These cards have no deposit requirement but come with a lower credit limit (often $300 to $500) and a higher interest rate. Both routes report your payment history to the three credit bureaus — Equifax, Experian, and TransUnion — which builds your credit score over time.
Your choice depends on whether you have $200 to $2,500 available right now. If you do, a secured card usually has lower interest rates and moves you toward a regular card faster. If you don't, an unsecured card for people building credit is your entry point.
Key Takeaways
- A secured credit card requires a cash deposit that becomes your credit limit, and most convert to regular cards after 12 to 24 months of on-time payments.
- Unsecured cards for people building credit require no deposit but come with higher interest rates and lower starting limits.
- Both types report to all three credit bureaus, so either one will build your credit score if you pay on time every month.
- Your credit score starts to improve within 30 to 60 days of opening the account, but reaching a good score (670 or higher) typically takes 6 to 12 months of consistent payments.
- Avoid cards with annual fees or high upfront costs — many secured cards have no annual fee, and unsecured cards for people building credit should cost nothing to open.
How secured credit cards work and what to look for
When you open a secured card, you deposit money into a savings account held by the card issuer. That deposit amount becomes your credit limit. If you deposit $500, your credit limit is $500. You then use the card to make purchases, receive a monthly bill, and pay it like a regular credit card.
The deposit sits in the account untouched — you cannot spend it. The card issuer holds it as collateral in case you stop paying your bill. After 12 to 24 months of paying your full balance on time (or at least making on-time minimum payments), the issuer reviews your account and converts the card to a regular unsecured card. Your deposit is returned to you, usually within 5 to 10 business days.
When comparing secured cards, look for three things: no annual fee, a low interest rate (APR), and a low deposit minimum. Some secured cards charge $25 to $95 per year just to hold the account — avoid these. The APR on secured cards typically ranges from 18% to 24%, which is high, but you can avoid interest entirely by paying your full balance each month. A low deposit minimum (like $200 instead of $500) lets you start building credit without tying up a lot of cash.
Banks and credit unions often offer secured cards with better terms than online-only lenders. Call your current bank first — if you have a checking or savings account there, they may offer you a secured card with no annual fee and a lower deposit minimum than you would find elsewhere.
Unsecured cards for people building credit: when to choose them
An unsecured card for people building credit requires no deposit and no collateral. You straightforward open the account, receive a credit limit (usually $300 to $500), and start using it. The trade-off is that these cards have higher interest rates than secured cards — often 24% to 36% APR — and they may charge an annual fee of $25 to $99.
Choose an unsecured card if you do not have $200 to $2,500 available for a deposit, or if you want to start building credit when ready without waiting for a deposit to clear. The downside is that the higher interest rate makes it more expensive to carry a balance, so you must be disciplined about paying off what you owe each month.
Some unsecured cards for people building credit have no annual fee — these are worth seeking out. Others charge a fee upfront or after the first year. Read the terms carefully before you open the account. A card with a $99 annual fee is only worth it if the other benefits (like a lower APR or a higher starting credit limit) make up for that cost.
What happens after you open the account
Your credit score does not exist until you open your first credit account. The moment you open a secured or unsecured card, the issuer reports the account to the three credit bureaus. Within 30 to 60 days, you will have a credit score. It will be low — usually in the 300 to 500 range — because you have no payment history yet.
Your score improves as you use the card and pay on time. The most important factor is payment history, which accounts for 35% of your score. Missing a payment or paying late will damage your score and set back your progress by months. Set up automatic payments for at least the minimum amount due each month, or set a phone reminder to pay before the due date.
The second factor is credit utilization, which accounts for 30% of your score. This is the percentage of your credit limit that you are using. If your limit is $500 and you carry a $250 balance, your utilization is 50%. Aim to keep utilization below 30% — so on a $500 limit, use no more than $150 at a time. This does not mean you cannot spend more; it means you should pay down the balance before your statement closes.
After 6 to 12 months of on-time payments and low utilization, your score will likely reach 620 to 670, which is considered fair credit. At that point, you may be offered better cards with lower interest rates and higher limits. You can then close the secured card (after your deposit is returned) or keep it open to maintain a longer average account age, which also helps your score.
Common mistakes to avoid when building credit
The most common mistake is paying only the minimum payment. If you carry a balance, you will pay interest every month, and the balance may grow instead of shrink. If your card has a 24% APR and you owe $300, you will pay about $6 in interest that month alone. Pay the full balance if you can, or at least pay more than the minimum.
The second mistake is opening multiple cards at once. Each time you open a new card, the issuer checks your credit report, which temporarily lowers your score by a few points. Opening three cards in one month can drop your score by 30 to 50 points. Open one card, use it responsibly for 6 to 12 months, and then open a second card if you need one.
The third mistake is closing the card after it converts to a regular card. Your credit score depends partly on how long you have held accounts. Closing a card removes it from your active account history and can lower your score. Keep the card open and use it occasionally — even one small purchase every few months is enough to keep the account active.
The fourth mistake is missing a payment or paying late. Even one late payment can lower your score by 100 points or more and will stay on your credit report for seven years. Set up automatic payments or calendar reminders so you never miss a due date.
How to compare cards and choose the right one
| Card Type | Deposit Required | Typical APR | Annual Fee | Time to Convert |
|---|---|---|---|---|
| Secured card | $200–$2,500 | 18%–24% | $0–$25 | 12–24 months |
| Unsecured card for building credit | None | 24%–36% | $25–$99 | Not applicable |
Start by checking whether your bank or credit union offers a secured card. If you have a checking or savings account, you already have a relationship with them, and they may offer better terms than you would find elsewhere. Call and ask specifically about secured cards for people with no credit history.
If your bank does not offer a secured card, search online for "secured credit card no annual fee" and compare the deposit minimum, APR, and annual fee. Look for cards with no annual fee and a deposit minimum of $200 to $500. Read the reviews to see whether customers report that the card converts to a regular card on schedule.
If you decide to go with an unsecured card instead, search for "credit card for building credit no annual fee" and compare the APR and starting credit limit. A higher starting limit (like $500 instead of $300) gives you more room to keep utilization low, which helps your score grow faster.
What to do if you are denied
If you are denied for a secured card, it usually means the issuer found something in your credit report that concerned them — such as a bankruptcy, a collection account, or a history of fraud. You have the right to a free copy of your credit report from each of the three bureaus once per year through AnnualCreditReport.com. Check all three reports for errors or old accounts that should have been removed.
If you find errors, dispute them with the bureau in writing. If you find old negative accounts that are still reporting, contact the creditor and ask them to remove the account or mark it as paid. This process can take 30 to 60 days, but it may improve your chances of being approved for a card.
In the meantime, try a different issuer. Some secured card issuers have stricter approval standards than others. If one bank denies you, another may approve you. You can also try an unsecured card for people building credit, which typically has looser approval standards than secured cards.
Frequently Asked Questions
How long does it take to build credit with a credit card?
Your credit score will appear within 30 to 60 days of opening the account. Reaching a fair score (620 to 670) typically takes 6 to 12 months of on-time payments. Reaching a good score (670 to 740) usually takes 12 to 24 months. The timeline depends on how consistently you pay on time and how low you keep your credit utilization.
Can I use a secured card to build credit if I have bad credit?
Yes. Secured cards are designed for people with no credit history, but they also work for people rebuilding credit after a late payment, default, or bankruptcy. The process is the same: deposit money, use the card responsibly, and watch your score improve over time.
What if I cannot afford the deposit for a secured card?
An unsecured card for people building credit requires no deposit. You will pay a higher interest rate and may pay an annual fee, but you can start building credit without any upfront cash. After 6 to 12 months, you may be approved for a secured card or a better unsecured card.
Should I carry a balance to build credit faster?
No. Carrying a balance does not build credit faster — it only costs you money in interest. Your payment history (paying on time) and credit utilization (keeping your balance low) are what matter. You can build credit just as fast by paying your full balance every month.
Can I get a credit limit increase after opening the account?
Yes. After 6 to 12 months of on-time payments, you can contact the issuer and ask for a credit limit increase. Some issuers will increase your limit without a hard inquiry (which would lower your score). A higher limit makes it easier to keep your utilization low, which helps your score grow.