What New Immigrants Should Do to Get a Credit Card in the USA

If you just moved here for work or school, you want to make sure you’re financially stable. One important aspect of financial stability is having credit. Your U.S. credit score will affect many of your endeavors, including renting, purchasing insurance, and finding a job. Even if you used credit cards back home, your credit history likely didn’t follow you. This means you’re basically starting from scratch.

Even if you’re planning to move back to your native country when your work contact is done or you receive your degree, you still might want to build credit if any other opportunities arise. Getting denied a credit card can be frustrating, so here’s a guide to getting approved and building your credit.

Try Getting a Secured Card

Getting a first credit card can be hard–even for U.S. citizens. That’s why secured credit cards exist. These cards require you to pay a security deposit as protection for the lender. Applying for a secured card when you are new to the country is a good first step to building credit. Here’s what you’ll need:

  • A permanent address so lenders know where to mail statements and contact you for other reasons.
  • A taxpayer ID number, which is an alternative of a Social Security number.
  • A bank account to prove you will be able to cover your credit card payments.
  • A job as a proof of income.

If you have all the things on this checklist, you can apply for your first secured credit card. But what happens if you still don’t get approved? Sometimes you might get denied even for a secured card. But don’t fret! There are still ways to build your credit and eventually get approved for a card.

Get Someone to Cosign

If you have a close friend or relative who lives in the U.S., you might be able to get him or her to cosign for a credit card. This essentially means that this person agrees to be held responsible for any debt from missed payments. Many major credit card issuers allow cosigners.

Become An Authorized User

Similar to getting a cosigner, you might be able to become an authorized user on someone else’s credit card. This means you can get your own card and build your own credit based off of another person’s credit card account. However, it may be difficult to find someone who is comfortable doing this if you don’t have a support system within the U.S.

Build Credit Through Rent Payments

If you rent, you might be able to report your monthly payments to the credit bureaus and build your credit. Your landlord might already report your payment history. Ask your landlord about this. Otherwise, you might be able to report your payments on your own if you get rent receipts. This is one of the most effective ways you can build credit without a credit card.

Important Considerations When Applying for Your First Credit Card

When it’s time to get your first credit card, you need to consider a few factors. When you get offers from credit card issuers, make sure you confirm with them that they report your account activity to credit bureaus. You want your responsible use of credit to count. You should also make sure the fees are reasonable. Your card should have a low annual fee that’s less than $50 and no more than a 5% charge for transfers.

You should also check to see if your secured card has an option to transition to an unsecured one in the future. This will prevent you from needing to open a whole new account, which can temporarily lower your credit score. Keeping the same account open is a better option, especially when you’re just starting out.

Final Thoughts

Getting a credit card for the first time in a new country might be scary, but if you follow the above guide, you can get the hang of it. If you get denied on the first try, don’t lose hope. The effort is well worth it. Once you have established your credit, you will have many more opportunities in America.