How to get a credit card if you are an immigrant: If you are an international student or have just arrived in the United States, welcome! The land of freedom is waiting for you. You need credit to achieve your goals – buy a house, request a student loan, etc. – and what better way than with a credit card to get it? As an immigrant, you have several options for obtaining a credit card.
Is it possible for foreigners to get credit cards in the United States? Of course. However, they will not be as easy to get as in your home country.
It can be difficult, but not impossible, to obtain a credit card in the United States as an immigrant. You can get different types of credit cards based on your immigration status, financial situation, and goals.
Even though the United States is the land of opportunity, many immigrants find it difficult to make ends meet. There’s no reason why they can’t get a loan because they have to pay federal taxes – which they didn’t pay before – or because they don’t have a job, but because they lack a credit history.
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The importance of having credit as an immigrant in the U.S.
You may not get approved for a post paid mobile plan or a credit card for immigrants if lenders can’t check your credit.
Perhaps you are thinking that there is nothing to fear at this point, since in your country of origin you had a good financial status. What’s the problem? Foreign credit scores are invalid in the United States.
However, building credit appears to be more difficult than it is. In any case, you’re good to go as long as you have a Social Security number – or an ITIN if none is available.
It is always a good idea to start building your credit even if you don’t intend to use it in the future. Many landlords check credit before leasing property. Some employers do as well. Insurance companies also ask their clients for financial information to determine how reliable they are and if they will pay their monthly premiums on time. Therefore, you should develop a plan as soon as possible to raise your credit score. By doing so, you will have options.
Immigrant credit: How should it be built?
For foreigners, students at universities or those with no credit score, applying for a credit card in the United States is the best way to build credit from scratch. Are there any? Yes, there are. You can choose from a variety of options.
Note: It can be beneficial or harmful for you to get your first credit card in the United States depending on your immigration status.
You should also be aware that there are also foreigner-friendly options. Immigrants and expatriates living in the United States, for example, can apply for American Express credit cards which have easier approval requirements.
In 2019, American Express launched a feature that allows you to request your American Express card even without a Social Security number. American Express and Nova Credit have merged to give you access to credit created outside the USA. Nova Credit translates your credit reports and converts your financial score to an equivalent number. Once this is completed, you can apply for an American Express card online.
Jasper is another company that is quite friendly to immigrants. Foreigners with no credit are often hesitant to work with issuers, but not Jasper. Why is that? So, rather than focusing solely on your credit score, it takes into account other factors, such as your employment history.
Up to 6% cash back can be earned with a Jasper Mastercard. Here’s how. Tell your friends about it. As a general rule, the issuer will offer you 1% cashback on daily purchases, but it will also give you the opportunity to increase this rate by 0.5% per year (provided that your payment behaviour remains good and you develop your own referral program). You’ll reach the long-awaited 6% returns if you combine both options.
Note: We will give you some tips on how to establish credit card in the USA later. If you are unable to obtain an American Express card or credit card in the United States today (guaranteed or with co-signer), this will make it possible to do so in the future.
Is it possible to get a credit card as an immigrant?
It is best to apply for -and use- an American credit card if you want to develop credit in the United States. We recommend you follow these steps:
#1 Open an account at a United States bank
Students are also required to have a bank account in the country in order to receive student credit cards. Your credit card bills can be paid, you can invest, save, or borrow from that account.
You might want to open an account at your bank of choice in order to qualify for a debit card. But why? In this way, the agent will be able to examine your finances and liquid assets.
Try opening a new account at the same bank in the United States if you have an international bank account open in your home country. Maybe you’ll have a better chance of getting a credit card this way.
#2 Provide a credit report and financial statements of your country of origin
Of course, as long as they are positive. Foreign credit is not required to be considered by US banks and credit unions, but that does not mean they cannot consider it off the record.
Tip: If you own a company or own real estate in your country of origin, you can begin depositing your winnings into your new account in America.
#3 Don’t forget to provide your taxpayer identification number
To access US banking, you do not need a Social Security number. Foreigners without a passport can open accounts with many banks. Did you get your credit card using your passport? Not yet. The bank usually wants to know if there is something that ties you to the country.
If you plan to stay in the United States for some time and have a job here, we recommend applying online for your ITIN. It is a federal identification number that replaces your Social Security number.
#4 Look for a permanent residence
If you rent it, all the better! It’s important for lenders to know they can always find you. Because of that, hotels, motels, inns, and Airbnb’s would not work. Renter or roommate contracts can be signed without credit. 1) It should be a legal contract, and 2) you should commit for a long time.
It is important that your landlord reports your rent payments to the main credit bureaus in the country. On the other hand, you can build your credit.
#5 Apply for a credit card as a foreigner
If you already have a home, a job, and an ITIN, you’re ready to apply for a credit card! It’s a good idea to review several options before applying. You can ask for an American Express or Jasper card -which are more friendly to foreigners- or a card for people without credit.
The United States has a trick to get a traditional credit card. But which one? Take a co-signer to the bank. There may be a difference if you have a close friend or family member with a US visa.
Another option – other than a co-signer – is to ask a close friend or family member to extend your credit card and add you as an authorized user. Your credit will benefit from this situation even though you won’t be the owner.
Is a secured credit card a good option for immigrants?
Once you have paid your card bills month after month for about six months, the bank will convert it into a traditional card and return the money you deposited.
The deposit on secured credit cards makes lenders more comfortable since consumers without credit are less likely to default. This is a good option if you have enough money – about $300 – but you can’t get a card the traditional way.
You’re applying for your first credit card in the United States, right? Check out these tips!
You will be able to build your credit faster by getting your first American credit card. Hold on! You need to keep these things in mind in order to reach your goals:
It is the issuer’s responsibility to report to the main bureaus of the country
It would be useless to have a credit card that does not report to the country’s leading credit agencies if your main objective is to build your credit history. In order to prevent late payment penalties, before you submit your request or upon receiving the plastic, you need to confirm that the issuer will report your payments on time.
You can pay your card fees
Certainly. To build credit, you need 1) a credit card and 2) to use it. It is important to remember that you will have to pay ancillary fees to use your card. Interest rates are one of these fees.
You might not get a 0% APR right away, but it would be ideal. The annual maintenance fee is another consideration. Choose an option that does not exceed $40 a year. Should you consider other amounts?
- Balance Transfer Fees: The most prudent thing to do would be to keep 3% to 5% of the transferred amount.
- Foreign Transaction Fees : Choose a credit card that does not charge anything if you use it outside the country, or use the previous percentage as a guide.
When you switch from a secured card to a classic credit card, how long does it take?
Generally, it is six months to one year, depending on the banking institution. Pay your debt on time and use your card frequently. Combining these keys with others, like building credit with rent and not being late on utility bills, you’ll build an impressive credit score.
What do you do if you cannot get a credit card as an undocumented immigrant?
#1 Never be late with your rent
Ask the owner to report your payments to the main credit bureaus in the country when signing the lease. Your credit score will be built in this way if you pay your rent on time.
#2 Make sure to pay your utility bills
If possible, request a few public services in your name, such as the Internet or a landline. You can also build credit in the country by paying off your daily bills on time. Be sure to ask the supplier to notify the credit bureaus about your payments.
#3 Get a guaranteed loan
You may be able to improve your credit through several guaranteed loans for immigrants. Generally, there are few requirements for eligibility.
Even though the interest rates are higher than a bank or credit union, at least you will have your payments reported to the credit bureaus. If you start small, you can increase the amount over time.
If you pay on time, they will release the money. However, you will have to leave a certain amount of guarantee at first. Whenever you request a loan in the future, you will not have to return any amount.
#4 Don’t take on more debt than you need
This is especially true for newcomers to the country. It is important for every citizen, whether they are immigrants or not, to live within their means. Do not spend more than you can afford. You will then be able to pay your debts on time and they won’t grow like foam.
#5 Get an alternative credit card
Is an alternative credit card different from a secured credit card? Not at all. A security deposit will not be necessary in this case and an approval process will not be required.
Your financial solvency will be determined by the issuer regardless of your credit score if you choose this option. Which factors will you consider? You should know your educational level, occupation, and average bank account balances.
We have already discussed Jasper, but we want to leave you with another option that might be more appealing to you, especially if you are in college. There is a Deserve EDU Mastercard for Students that is available to students, a card in which Social Security and credit history are not required.
Users can redeem juicy rewards with this card and there is no annual maintenance fee.
#6 Use a credit card issued by your country
You can use the credit card you already have in your wallet (from your country of origin) while your American card is arriving. The bank will charge you additional fees for completing transactions abroad, so it is advisable to review the exchange rate carefully.
Use your American debit card if you don’t have a credit card, even in your home country. Although having a debit card won’t improve your credit score, you still have options. How? Pay your bills on time, ask your landlord to report your payments to the main bureaus in the country, etc.
What are the most common credit cards you can apply for as an immigrant?
1. Department store cards
Store cards from department stores are the easiest to obtain, and they may permit you to enter sweepstakes and receive discounts. The interest rates on these cards usually vary between 18.15 percent and 24.15 percent. Walmart offers its customers a credit card without an annual fee, and Target offers free shipping on some items.
2. Unsecured credit cards or “unsecured credit cards”
Unsecured credit cards are “regular” credit cards in which no security deposit is required. In the United States, you can apply for an “unsecured” credit card if you have good credit. The majority of these credit cards allow you to renew the line of credit (borrowed money) after six months or a year. Annual fees for some cards are as low as $29. Some cards, such as the US Bank Secured Visa Card and the Discover it Business Credit Card, do not charge you for unauthorized charges.
3. Student credit card
BankAmericard is an example of an “unsecured credit card” designed just for students. Their fees and interest are often lower, and they allow you to build a strong credit history. The Deserve Edu Mastercard for students, for example, does not charge annual fees.
4. Secured credit card or “secured credit card”
Credit cards with security deposits are similar to regular credit cards, except they require a security deposit. The deposit can be equal to the amount of the credit (borrowed money) you will get. In the case of a $500 deposit, the maximum spending amount is $500. You do not need credit to get this card since the deposit acts as collateral. You should pay what you owe on time so that you don’t receive negative notes on your credit history. A minimum deposit of $200 is required for Citibank’s Citi Secured Mastercard. This type of card is beneficial for people with no or bad credit histories. By doing so, they establish a good credit history.
5. Be an authorized user of a credit card
As an authorized user, you can use a credit card that belongs to someone you trust. A benefit of being an authorized user is that the cardholder is primarily responsible for paying the balance, fees, and other expenses. The person’s credit may be adversely affected if they default on the established payments.
Credit cards can be used to build credit, make purchases, and most importantly, help you manage your finances. To obtain a credit card, you must fill out an application so the agency or the bank can evaluate your financial history and determine your ability to repay the debt. These details are obtained from your credit report and credit status.
The basic requirements you need to apply are:
- Be older than 21 years
- have a source of income
- Social Security
- Passport
- Individual Taxpayer Identification Number (ITIN)
We hope you make this process successful!
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