Author Topic: Get a rewards card with no credit history?  (Read 6634 times)

Beowulf

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Get a rewards card with no credit history?
« on: September 09, 2014, 05:51:21 PM »
I've read MMM's credit card recommendations, and they all seem to assume good or excellent credit.  I'm in my early 20s with no credit history, good or bad, what sort of options do I have?  For reference, I don't eat out much and don't travel a lot.  If there is a card that gives rewards on index funds, charitable giving (without just passing the cost on to the charity), or utility bills that would be great.  More realistically, I'm looking for a card that has good rewards for groceries, with gas and office supplies being a nice bonus.  If that's not available with no credit history I'd be fine with a card that just doesn't cost me anything as long as I pay the balance in full.

daverobev

  • Magnum Stache
  • ******
  • Posts: 3375
  • Location: France
Re: Get a rewards card with no credit history?
« Reply #1 on: September 09, 2014, 06:03:00 PM »
BofA have a cash rewards card - secured version, $40, plus your deposit of $300+. 3/2/1% on gas/groceries/everything else. After 6+ months of paying on time, call in to request conversion to the non-secured version.

Or try CapitalOne's Journey student card (AFAIK don't need to be a student). 1.25% cashback. Not secured.

The other option is who you bank with. Go in, talk to someone. If you have a job and any history with the bank they'll work something out for you.

Keep your first card forever! Never close it.

Charitable giving is likely to just pass the cost through. Just give cash or use debit.

Left

  • Handlebar Stache
  • *****
  • Posts: 1159
Re: Get a rewards card with no credit history?
« Reply #2 on: September 09, 2014, 06:21:59 PM »
While I don't have it since I'm with scottrade, I'm recommending fidelity's credit card. Two reasons, first is that it's an investment company and unless you invest with vanguard directly, fidelity isn't bad to get you started. And second is that the card gives you 2% cash back into the investment account so you can use it to buy index funds. 2% isn't too bad, not the 5% of rotating categories, but better than the 1% of non category cards either. I don't think you need a credit history for this one.

I use starwood (I avoid the yearly fee) and marriott card for rewards since I value the hotel nights.
« Last Edit: September 09, 2014, 06:24:12 PM by eyem »

TeresaB

  • Stubble
  • **
  • Posts: 123
Re: Get a rewards card with no credit history?
« Reply #3 on: September 09, 2014, 07:45:38 PM »
Discover card? I got their student card with no credit history at all. They have 1% cashback and 5% on rotating categories, plus a "shopping mall" where you can get extra cashback on online purchases. I can send you a referral link if I'm allowed to do that and you are interested.

La Bibliotecaria Feroz

  • Magnum Stache
  • ******
  • Posts: 4535
Re: Get a rewards card with no credit history?
« Reply #4 on: September 09, 2014, 08:02:03 PM »
I was able to get a $2500 card--I think it might even have rewards--from my credit union when others turned me down. Our best cards happen to be in my husband's name, but I wanted something of my own to boost my score a bit. (We had a short sale debacle four years back. If you belong to a credit union, you might check there.

daverobev

  • Magnum Stache
  • ******
  • Posts: 3375
  • Location: France
Re: Get a rewards card with no credit history?
« Reply #5 on: September 09, 2014, 08:12:58 PM »
Discover card? I got their student card with no credit history at all. They have 1% cashback and 5% on rotating categories, plus a "shopping mall" where you can get extra cashback on online purchases. I can send you a referral link if I'm allowed to do that and you are interested.

Were you a student at the time?

TeresaB

  • Stubble
  • **
  • Posts: 123
Re: Get a rewards card with no credit history?
« Reply #6 on: September 10, 2014, 12:47:13 PM »
Discover card? I got their student card with no credit history at all. They have 1% cashback and 5% on rotating categories, plus a "shopping mall" where you can get extra cashback on online purchases. I can send you a referral link if I'm allowed to do that and you are interested.

Were you a student at the time?

Yes, but they didn't ask me about that on the application, so I don't think it's just for students.

Cwadda

  • Handlebar Stache
  • *****
  • Posts: 2182
  • Age: 25
Re: Get a rewards card with no credit history?
« Reply #7 on: September 10, 2014, 12:55:43 PM »
I'm 20 and I applied for a Bank of America Cash Rewards card 7 months ago. I was accepted within days. I had zero credit history before. I got $100 for spending $500 (on my college books) within 3 months so that worked out well. They offer 3% on groceries, 2% on gas, and 1% on everything else. In addition, if you deposit the rewards into a Bank of America account you get a 10% boost rewards back. This effectively makes it 3.3% on groceries, 2.2% on gas, and 1.1% on everything else.

Chranstronaut

  • Pencil Stache
  • ****
  • Posts: 713
Re: Get a rewards card with no credit history?
« Reply #8 on: September 10, 2014, 01:17:37 PM »
Well, first I might recommend looking at your credit report(s) if you never have before: https://www.annualcreditreport.com

If you truly have no credit history, but a steady job, you could probably get a rewards card without issue.

I got denied for an airline rewards card at age 21 because I didn't know I had a small amount go to collections in my name.  That sucked.  But my bank approved me quickly though for a 1% on everything card with no annual fee.  That card was not on their website and it's not a student card; it's like a secret we-feel-bad-for-you credit card.  It wasn't a secured amount, just had a low limit.  It's certainly not the best card ever, but since I'd had an account there for years they didn't need any income proof.  I plan to just keep this card indefinitely and add rewards cards later if I feel like I ever want them.

johnny847

  • Magnum Stache
  • ******
  • Posts: 3196
    • My Blog
Re: Get a rewards card with no credit history?
« Reply #9 on: September 10, 2014, 02:18:43 PM »
Depends on your income level. I'm a grad student so I make a tad more than what I would consider to be a Mustachian comfortable level of living, and I couldn't get a rewards card that was marketed to students because of my lack of credit history. So I had to get a secured card. But I "graduated" from that card (BoA's secured card) to an unsecured card at 11 months.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Get a rewards card with no credit history?
« Reply #10 on: September 10, 2014, 02:52:38 PM »
If you want to reap serious rewards, you really need to first establish very good credit, then build up limits above $10,000.   

Step 1 is get any card, a secured card if necessary.  Step 2 is work on getting the secured card unsecured.  Step 3 is get another card.  Always make payments on time or early. 

Once you've had an unsecured card with a score of say 730 or better, apply for another.  After a year or so of having the second card, you can try applying for serious rewards cards like Cap one Quicksilver, Fidelity Amex, Barclays travel, etc.  It might take building more credit with bigger limits...no one can completely answer your question.

johnny847

  • Magnum Stache
  • ******
  • Posts: 3196
    • My Blog
Re: Get a rewards card with no credit history?
« Reply #11 on: September 10, 2014, 03:07:13 PM »
If you want to reap serious rewards, you really need to first establish very good credit, then build up limits above $10,000.   

Step 1 is get any card, a secured card if necessary.  Step 2 is work on getting the secured card unsecured.  Step 3 is get another card.  Always make payments on time or early. 

Once you've had an unsecured card with a score of say 730 or better, apply for another.  After a year or so of having the second card, you can try applying for serious rewards cards like Cap one Quicksilver, Fidelity Amex, Barclays travel, etc.  It might take building more credit with bigger limits...no one can completely answer your question.

I don't think you need a score of 730 or better to start applying for more cards. I got my first card, a secured one, in September. I got my second card, a student rewards card (1.25% cash back) from Capital One 6 months after my first card. I don't know what my score was at the time, but I highly doubt my score was better than 730, considering I had only 6 months of history!
Four months after that, I applied to two more cards and got both of them (one of them being Sallie Mae, which gives 5% back on the first $250/250/750 on groceries/gas/bookstores every month, where Amazon counts as a bookstore --- I highly recommend this card). At this juncture, my FICO score is 720.

Beowulf

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Get a rewards card with no credit history?
« Reply #12 on: September 10, 2014, 09:53:13 PM »
Thanks for the replies.  Unless something better is posted in the next day or two I'll probably go with BoA, but will also look into Discover.  I forgot to mention that I have an income of ~50k, mostly salary, but with a non-trival performance based segment.  It seems like this should be enough to give me some standing.  Also, I have checked and my credit does seem to be completely blank.
Quote
I'm recommending fidelity's credit card. Two reasons, first is that it's an investment company and unless you invest with vanguard directly, fidelity isn't bad to get you started. And second is that the card gives you 2% cash back into the investment account so you can use it to buy index funds.
  I currently do invest directly with Vanguard, so I'm not sure that this would work out.
Quote
Charitable giving is likely to just pass the cost through. Just give cash or use debit.
I figured that was the case, but it seemed worth asking.

flashpacker

  • Stubble
  • **
  • Posts: 100
Re: Get a rewards card with no credit history?
« Reply #13 on: September 11, 2014, 12:04:52 AM »
If you get denied for an unsecured card, Google for phone numbers for their reconsideration line. When we came to the US with no credit history we did this and got approved in 3 mins after initially being denied.