Not having a bank account isn't as unusual as you may think. There are many people who, for various reasons, don't have one. Nevertheless, this may be complicated for those who want to open a credit card. Learn how to get a credit card without a bank account!
It is said that the only way to open a credit card is by having a bank account, but not everybody knows that there is another method that does not involve this. You definitely should learn more about secured credit cards!
The main thing you need to know about this method it that it requires a cash deposit as collateral, just in case you don't end up paying the bill.
In order to open a secured credit card you should follow some simple steps. So, take notes!
1- Find your credit card provider
The first thing you have to do is to find a bank that offers secured credit cards. You will probably find several options, so make a pros & cons list to analyze the services each bank offers, its fees and conditions.
Some of the options are Capital One, Discover and Citibank. Smaller local banks may not offer this type of card, but you should make some research before choosing.
Take the following points into account:
- The security deposit: It usually is equal to the spending limit of the card. Bear in mind that in the case that you don't pay the bill, then the bank will take your deposit to pay it. If this happens, then you will have to provide another deposit order to raise your credit level once again.
- Banks close to you: Chose a bank that is nearby. Bear in mind that you will have to pay the bill in person and in cash.
- Fees & Conditions: Some banks may offer conditions like cashback on purchases or rewards points. Others may imply an annual maintenance fees or harder penalties for missing payments.
2- Apply for the card
Once you've chosen your secured credit card provider, you should visit the banks' branch to submit the application. Just in case, make sure that the teller fully understands that you do not have a bank account.
Fill out the application with the information required and be prepared to show proof of income to the bank. As you don't have a bank account, you will have to present pays stubs or tax returns, and the bank will use this information to set your spending limit.
After a few days the bank will let you know if the application has been approved. Once this happens, you will have to visit again the branch to pay the required deposit and officially open your card.
If your petition gets rejected, you can ask the bank for an explanation and then use this information to improve your application and present it in another bank.
3. Payment of your secured credit card
In order to keep the deposit you will have to pay your balance at the end of the month. By paying on time you can keep a high credit score and you may get your deposit back when you close the credit card.
The payment of the bill can be done in person and in cash. Some banks accept money orders, so check if this is possible.
If you can't visit the branch to pay the bill, then you can mail a money order for the amount you need to pay to the payment location before the due date. In this case, the payment will take a few days to arrive, so remember to mail it a week ahead.