You can apply and potentially be approved for most credit cards with no deposit, including cash back, travel and student credit cards. Some cards do, however, come with an annual fee. A traditional secured credit card can help you build your credit history, but requires a deposit that is used as collateral.
If you’re looking for credit with no deposit and you don’t have much credit history, there are a few options to consider:
1. Become an Authorized User on Someone Else’s Credit Card
Becoming an authorized user on a credit card account allows people who may not be able to qualify for a card by themselves to use someone else’s credit card as if it were their own. Authorized users do not have all the same account capabilities of a primary account holder, but as far as general use is concerned, it’s as if the card is theirs.
One of the main benefits of being an authorized user is that if the primary account holder has a good history of use with the card, the authorized user may reap some of the rewards on their own credit. Many — but not all — issuers report authorized user activity to the credit bureaus, which means that you can essentially piggyback off a primary account holder’s credit history for a given card.
On the other hand, if a primary account holder has missed payments on the card or is holding a high balance — both negative impacts to credit — an individual risks damaging their score by becoming an authorized user.
Similarly, if an authorized user mishandles the credit card, racking up large balances they can’t afford to pay off, the primary account holder will be held responsible. This responsibility may make it difficult to find someone who trusts you as an authorized user on their account.
2. Sign Up for a Student Card If You’re a Student
A student credit card doesn’t require a credit history or a deposit, so it could be a great option to start your credit journey – if you’re a student.
Student credit cards also offer cash back rewards and can help you establish a credit score, among several other benefits.
If you’re interested in applying for a student card, you’ll want to make sure you have the right information to apply and get the right card for you.
3. Rethink Getting a Secured Credit Card
Yes, a secured card does include making a security deposit. However, you can qualify to get it back and it could be as low as a couple hundred dollars. The plus side is that you can still earn rewards and build your credit at the same time.
While not having to make a deposit could seem attractive up front, you also have to consider other factors, such as the interest rate you’ll be charged on a revolving balance, annual fees and whether or not you will be approved.
You may want to learn more about how a secured card works before you dismiss it as a viable option.
Educating yourself on what type of behavior leads to a higher credit score should come before completing any applications. With a bit of preparation, and a commitment to good habits, you can find a credit card with no deposit that can help you create a brighter financial future.
Originally published September 25, 2017.
Updated August 24, 2020.
