How to get a credit card when you have no credit history.

If you've never used credit, getting your first credit card can be tough. Even if you have taken out car loans, mortgages, and other loans and paid them on time, you may get turned down when you try to get your first credit card.

• Get a secured Visa or MasterCard.
  The fastest way to establish credit for the first time is to get a secured card. With a secured card, you put a security deposit of $250 to $500 into a savings account with a bank that issues the card. You get a MasterCard or Visa that looks and works just like any other bankcard. Banks that offer secured cards are usually very willing to give a card to people who don't have a credit history-after all, they have your deposit if you don't pay the bills! Since your goal is to rebuild your credit, you'll want to choose a secured card that will report your payments to the three major credit bureaus. Not all issuers report to all three bureaus, so be sure to ask before you apply!
  
  You may want to consider the Union Secured Card issued by Household Bank (Nevada, NA). You deposit at least $250 in an FDIC-insured account with Household. You get a Union Credit Card that can be used anywhere MasterCard is accepted. Your credit line is equal to your deposit, so if you deposit $250, your credit line is $250. Your payments will be reported to all three major credit bureaus, helping you build a better credit rating! If you pay your bills on time for 24 months, you'll automatically be eligible for a regular, unsecured Union Credit Card that doesn't require a savings deposit.
  
  
  
• Co-sign a credit card.
  If a spouse, relative or good friend who has a major credit card is willing, ask them to add you to their account as a co-signer. To do this, they'll have to call their card issuer and ask for instructions. Usually, you will have to sign an application. Once you are on the account, it will be listed on your credit report where it can serve as an excellent credit reference (but only if the bills are paid on time)!
  
  Make sure you are added onto the account as a co-signer or joint applicant. That means you're legally liable for the bills if the other person doesn't pay them. If you're added to the account as an authorized user, that means you're authorized to use the account, but you're generally not liable for the bills. Authorized user status isn't as strong a credit reference.
  
  
• Get a student credit card.
  If you're enrolled in a college or university, chances are you'll be swamped with offers for credit cards. In most cases, you won't have to have any credit experience to get one (or several). If you're offered a major credit card this way, take it. It's an easy way to establish credit.
  
  
  
  
• Get a prepaid Visa or MasterCard
  Pre-paid Visa or MasterCards are prepaid reloadable cards that can be used everywhere Visa or MasterCard is accepted. You get approved without any credit checks. Everybody is accepted if you are above legal age. Because it is a prepaid card, spending limits are set by the amount of money you load onto the card. When you make a purchase with the prepaid credit card, the purchase amount is deducted from the card balance. You can add more money on a regular basis or whenever the money runs low. You can enjoy all the benefit of the regular credit cards. Prepaid cards, however, do not help establish your credit.
  
  

Other Considerations:

• First-time cardholders with limited or no credit history rarely qualify for low interest rates. But you should take the card anyway. However, you can renegotiate the rate after six months or so. If you pay your credit card bill in full each month, the interest rate won't matter.
  
  
• Don't shop for several cards at the same time. That mistake may sabotage your chances. Any time you apply for a card, you get the credit process started. Card issuers checking your credit report will see the other inquiries and assume the worst -- that you'll get the cards and use the entire credit limit. If issuers think you have too many cards, they'll be less confident that you'll be able to pay your debts.