Getting approved for a credit card can be difficult without a positive credit history working in your favor. It's a Catch-22: To obtain a credit card, you need a good credit history. But to have credit history, you need to establish good credit!
This no-win cycle can keep people with a non-existent, credit history from getting approved for a credit card. But it doesn't have to if you of credit cards available and how to build a good credit history.
When it comes to credit cards, the type of card you apply for will depend on your situation. If you're a student, you'll, for a student card. But if you're a non-student with a non-existent or bad credit history, that is secured or obtained with a co-signer may be your best option. With co-signed credit guarantees and is responsible for the debt. This means that the co-signing person is responsible for full amount of the debt if the card holder doesn't pay. In fact, when co-signed debt default, three out of four times co-signers are normally asked to repay what is owed, according Trade Commission.
Furthermore, the issuing bank can attempt to settle the debt without first trying to collect from the card holder. The bank can also use the same collection methods against the co-signing individual, including garnishing wages. If the debt is not paid, it can leave a negative mark on the credit history of the co-signer, as well as the card holder.
Despite the risks, a co-signed credit card can be for helping a friend or relative build their credit history so they can one day obtain a card on their own. Secured, co-signed and pre-paid credit cards offer viable options. But you should start building history, so you can obtain a regular credit card on your own in the future.
