Being able to apply for a credit card online is a nice luxury to have. Instead of having to mail off a paper application [stamps are getting expensive!] and wait an extra couple of days just for the credit card company to receive your application, you can get everything done on the internet. However you still have to wait several weeks to hear back from the credit card company on whether or not you actually get the card in most cases. Having to wait weeks to hear if you qualify for a credit card is so 20 years ago, there is a way to hear whether or not you are approved for a credit card instantly after applying, but can you obtain an instant approval credit card with no credit history?
The short answer is yes! You can obtain an instant approval credit card with no credit history. In fact, many instant approval credit cards are also guaranteed approval credit cards. This means that you are guaranteed to be approved for the card as long as you apply and you are of legal age and whatnot. The days of waiting weeks to hear back from credit card companies just to get a denial are over! In this economic climate it is tough enough to get approved for a credit card, when you consider that you will be guaranteed to be approved for the credit card and you should be approved instantly, or almost instantly, it sounds too good to be true. While you can apply for a credit card that is both guaranteed approval and instant approval without a credit history, you may not be getting what you think you are getting.
Unfortunately, there is a catch. Most instant approval “credit cards” are really prepaid debit cards. Prepaid debit cards are basically the same thing as a normal debit card except that you do not have a bank account attached to the card; you need to send money over towards your card manually. Also, prepaid debit cards have fees that range from between 20 dollars and over 100 dollars annually, which can put a big dent in your bank account. However you do not have to pay any interest whatsoever on your prepaid debit card because you are not actually loaning any money from the credit card company. Credit card companies love when their clients decide to use prepaid debit cards because they still make a ton of money from fees and they do not have to risk their customers defaulting on their credit cards because they are not actually loaning any money out to anyone.
You should only consider prepaid debit cards if you have bad to no credit. Even a credit card with a high APR [16-20%] is preferable to a prepaid debit card. Most credit cards have a 25 day grace period where you pay no interest on your purchases as long as you pay off your balance in full within 25 days of the beginning of the month. For example, if you buy 500 dollars’ worth of items on your credit card in the month of April you will have until May 25th or so to pay off the 500 dollars if you do not want to pay any interest on your purchases. This means you can effectively buy items on your credit card interest free if you keep track of your purchases and you are serious about paying off your balance in full each and every month. Unsecured credit cards are better than prepaid debit cards because unsecured cards will help your credit score if you act responsibly with them and you will likely end up paying less in overall fees with an unsecured credit card.
If you have no credit history you are not in a position of strength financially, but that does not mean you do not have any options. There are legitimate unsecured credit cards aimed towards people with no credit, especially towards college students. Research these cards individually and apply for whichever card[s] you feel are most appropriate for you and your situation financially. You do not have to settle for an instant approval, guaranteed prepaid debit card, even if you have no credit history.