The Realities of Drop Shipping With No Credit: Here’s What to Do

One of the most common mental roadblocks is wondering if you can start drop shipping with no credit. It’s something that stops people from building their eCommerce business and something I’m asked about often:

Maybe you messed up your credit, overspent or didn’t pay your bills. Maybe you’re young and never had a credit card (or old and never had a credit card).

In any case, you may be wondering if you can get into drop shipping with no credit...

The answer is YES you can.

With that being said, I want to take a step back and show you why that’s true and how you can actually use drop shipping to build your credit.

Payment Options for Drop Shipping

When you’re applying to suppliers using the Drop Ship Lifestyle model, they’re going to give you two payment options.

Option one is by signing credit terms. Drop ship suppliers will offer what is essentially a credit line by giving you 15-45 days to pay the invoice of what your customer ordered. They will send the products out right away and you’ll pay later.

The second option is to pre-pay your supplier, which means as soon as the order is submitted, you pay them the cost and they ship it out to the customer.

Using Credit Terms To Pay Drop Ship Suppliers

With credit terms, you may think having more days to pay your bill is good because you can free up cash and pay later. That’s true but it’s where the benefits end. I will show you why prepaid is always better even if you have an 850 credit score.

When your suppliers ask if you want to pay with credit terms, you’re going to say no.

If you go with credit terms, you would have to submit bank statements, personal references, business references, credit report, and D&B score if you’ve been in business a long time.

Drop shipping suppliers have to be rigorous because they’re basically extending a credit line to you and putting their money on the line.

Pre-Paying Drop Ship Suppliers

I recommend you always use the prepaid method for your orders. This means once an order is placed on your website, you’ll pay your drop ship supplier and they’ll ship it to the customer. This doesn’t mean you’ll have inventory or pay cash in advance, you’re simply paying before they ship it.

Your Pre-Pay Options

Even with the prepaid option, there are a few different ways to pay your drop shipping suppliers. The good news is that most of these methods will allow drop shipping with no credit.

Credit Card

The first option is paying with a credit card. With this option, the supplier will have your card on file to charge when orders come in. That way you’re processing the order right when it comes in on demand. This is the best pre-pay option in the long run.

Debit Card

Your second option is using a debit card. This isn’t available for all suppliers, but a lot of them allow you to use it.


If the supplier doesn’t take a credit or debit card, Dwolla is a good alternative to pay your suppliers with.  This online payment system is easy to use and only has a tiny fee of $0.25. Dwolla really is your best choice for drop shipping with no credit or if the supplier won’t accept credit.


PayPal is an option, but one that we avoid recommending as a pre-pay option at Drop Ship Lifestyle. There are a lot of stories of PayPal holding onto payouts for various reasons, delaying payment and throwing your business into chaos.

So even if a supplier accepts PayPal, that amount of uncertainty makes it a poor choice for paying your suppliers with.


A lot of the old school suppliers will want you to pay with a check. I always try to avoid this because there is little to no upside. It is a huge hassle and takes time and effort, without any reward. So if your supplier asks for payment by check, don’t do it.

Advantages of Using a Credit Card

This article is for people that are worried about their credit. So I recommend that if you have no credit, you should start your drop shipping business with a debit card or Dwolla.

But if you have the option, using credit cards is your best choice. That’s because it gives you an extra advantage with high-ticket drop shipping business due to how much money is processed.

With our credit cards, we spend multiple-six figures a month with our suppliers. We pay for shipping costs and ads. That allows us to build up so many points with the credit card rewards program.

That way you can earn cash back, mileage, and other great perks!

People like The Points Guy have guides ALLLL about this. It’s an incredible way to save money and enjoy the good life.

Getting a Credit Card with No Credit

Now, you’ve probably been thinking at this point, “Anton, you say using a credit card is the best way to drop ship… BUT HOW do I even get a credit card if I have no credit history?”

Well, there’s hope.

Getting a credit card when you have no credit isn’t always as difficult as it sounds. There are plenty of credit card companies that offer cards with a “limited history” sign on. “Limited History” means less than 3 years of credit history.

So if you’re just getting into the credit game, but don’t know where to start, check out a few of the cards below.

Credit Cards You Can Get For Business With No Credit

The Discover it Secured card is one of the most solid credit cards you can get with no credit history.

It’s also one of the best if you’re looking to REBUILD your credit.

And it has no annual fee!

Go to Discover’s website for more details.

The Chase Freedom Unlimited Card is a number one pick for students and for those hoping to boost their credit over time.

No annual fee, and if you live in the United States, you’ll have access to the many Chase ATMs around the country.

And there is a cashback bonus if you follow Chase’s terms on their website.

Check it out!

This is just a solid card - plain and simple.

No annual fees. No tricks.

Just a good card from a good credit card company. I highly recommend it.

So now when you say, I have no credit and want a credit card…

You know where to start. But do your own research! There are tons of good intro level/rebuilding cards out there.

How To Build Your Credit Quickly

If you have bad/no credit I have some great news for you. With your drop shipping business, you can rapidly improve and build your credit!

After you get your business up and running you can rapidly build your credit with a secured credit card. All you need is a good amount of savings built up first.

The secure credit card acts as a reserve for the bank. I personally recommend a Capital One secured credit card. They put your reserve of money in a CD (certificate of deposit) and normally start you off with a $5,000 credit limit.

You won’t be using this credit card like a normal person. It’s a business credit card, so you’re going to max out your card and pay it off over and over. This will drastically improve your credit score in no time.

As your credit score goes up you should get a rewards card. With that, you can get take advantage of the free travel and cash back.

Key Takeaways

  • PayPal Drop Shipping isn’t as nice as it sounds…
  • There are credit cards you can get with no credit…
  • If you’re worried about how to start a business with no credit, don’t be… you have options!

So the answer to whether you can start your drop shipping business with no credit is not only yes… but it’s also a great way to fix that problem! It’s another reason eCommerce is the best choice for starting your own business.

Drop shipping with no credit was also covered in this previously recorded video.

As your credit score goes up you should get a rewards card. With that, you can get take advantage of the free travel and cash back.

    • Anton Kraly says:

      Happy to share, Shaban!

  • Thank you very much Anton I am still not quite sure how the shipping is paid by the client

    • Hi Stella,

      We offer free shipping to our customers, but we pay the actual shipping cost.

      This fee is deducted from our profit margin.

      When I saw we aim for 25%+ net profit margins, this is after we pay for products, ads, shipping, and all other expenses.

      I hope that helps!

  • Anton, would recommend waiting for the money to land on your account for security reasons?
    Also, if you don’t have sufficient funds, what would you do? High ticket items are hundreds or sometimes thousands of USD, at the same time you don’t wanna wait for customers money since it delays shipping time.
    You’re also referring to American credit cards. What about other countries like Australia?

    • Hi Max,

      There’s no need to wait for the funds to clear. If you accept payment via Shopify Payments (which I recommend) you can also use their fraud monitoring service for added security.

      If you do not have sufficient funds to pay for orders upfront I would recommend using a credit card (US or International).

      If you cannot get approved for a credit card, you can place orders with your suppliers 3 days after your customers place them with you.

      Hope that helps!

  • Christian Mack says:

    Thanks for the great info! I can attest to the fact that the Discover IT and Capital One Platinum Secured are excellent credit cards to have

  • Joy Pearl says:

    Thanks for this article. However, I find that it addresses the issue of no credit moreso vs. bad credit or those rebuilding their credit. Will these same options be available for those with poor credit? Also, what is Dwolla? I don’t understand what it is. Is it like CashApp?

    • Hi Joy,

      This article does apply to those who are rebuilding credit as well.

      You can use a secured card to get started 🙂

      Also, Dwolla is a website that allows you to transfer funds from one checking account to another. The benefit of using them over a traditional bank transfer is that it’s extremely affordable to send funds with them. They’re currently charging $0 per month with a 0.5% per transaction fee (Minimum $0.05, Maximum $5.00)

  • Hi,my name is Steve and I just turned 18 this year,like two months ago I heard about dropshiping on YouTube,and I decided to get started,but this credit card issue was like really bothersome since I live in Africa(Rwanda)and have ever had such a thing as a credit card,I was about to give up on my dropshiping dreams,but luckily I found u guys and am so so so so like literally so so grateful .

    • Anton Kraly says:

      That’s awesome, Steve. Wishing you nothing but success with your dropshipping business.

  • Hello Anton,
    Thank you for the post. Along with this suggestion, can you suggest me which platform is better if I want to start my business? I have a little experiece of WoCommerce but some of my friends suggested me to use Shopify. Kindly suggest me what would be the better choice?
    And if you have a few minutes, how is the Cash on Delivery option? Is it safe for the suppliers?

    • Anton Kraly says:

      Hi Hafiz,
      You should definitely use Shopify. It has much less of a cost in the long term because of their amazing support and because of their app store. We’ve been with them for years and they continue to improve. I don’t see that slowing down any time soon.
      Regarding Cash On Delivery, this is very uncommon. You should pay suppliers with a credit card, debit card, or bank wire. You should accept payments from your customers via Shopify Payments (any major credit and / or debit card), PayPal, and Amazon Payments.
      Hope that helps!

      • So anton, accepting payments first from customers then pay using a credit cards to the suppliers after recieving the full payment ordered?

        • That is what we do. It’s a great way to build up rewards points, cash back, or travel miles very fast 🙂

  • Hey Anton, I am beyond happy for the information you’ve put out here, thanks. Please how does this apply for people who don’t live in the USA, and are interested in drop-shipping with regards the information you shared above?

    • Anton Kraly says:

      Great question, Drew! If you don’t live in the U.S. you can still pay suppliers via credit or debit card. It’s the same process. Here’s some more info on drop shipping outside of the U.S.

      Hope that helps!

  • Anton Kraly says:

    Hey Everyone,

    As many of you already know I created Drop Ship Lifestyle after selling a network of eCommerce stores and then trying to find a community of other store owners to network with… What I found was a bunch of scammers who promised newbies they would get rich quick by following their push-button systems!

    This led me to create a new community along with online training that shares how to build a REAL online business.

    I’d love to hear what you think… it’s a 2.5 hour dropshipping webinar designed to help you drop ship profitably… all for free.

    Be sure to click here to check it out and send me your feedback!

    If you go through the How To Drop Ship Profitably webinar and still have questions just contact me and I will help you out.

    – Anton

    • Hi Anton,

      I did go through your 10 day mini course I did find it very informative, but I’m sure there is so much more to dropshipping. I have to be honest I’m afraid of getting ripped off I want to jump right in too many people inundating social media with these training videos. I don’t how to put my full trust into any one person online.

      • I’m happy to hear you enjoyed the 10 day mini-course, Mike! And I totally understand where you’re coming from regarding trust.

        If you haven’t already seen our real student reviews of Drop Ship Lifestyle, you can check them out by clicking here.

        Also, I’m not sure if you know this, but we were voted Best eCommerce Course by Shopify and as far as I know, they do not endorse any other eCommerce courses.

        With that being said, you should still always do your research before investing in anything online. I know of many of the people that are bombarding you with ads and unfortunately, many of them are scammers with no moral compass!

        • I appreciate youre response I will continue researching , I need a change in my life for me and my family

  • Paul Seymour says:

    Thank you Anton, I’m still just starting to dip my toes into this DLS but I’m getting little bits and pieces at a time. This post answered a big question that I’ve been worried about. Thanks

    • Anton Kraly says:

      You’re welcome, Paul. Happy to hear it helped!

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