You’ve spent your whole life paying all your bills on time and have maintained good credit (as far as you know) with one or more credit cards in your birth country. You pack your bags and head over to the United States with your new job and visa and if you’re lucky enough you might even have a big bag of cash. You walk into the bank and ask to open a new credit card, and are told: “Sorry, no”.
I’ve written a lot about banking and credit for the simple reason that it’s an important (and somewhat difficult) element of moving to the States and knowing how to do it effectively has led me to have a credit score that let me rent an apartment and hold a number of credit cards; whereas friends of mine are unable to do either.
Option 1: Secured credit cards
One alternative way to build a credit score and ultimately get a credit card is a “Secured Credit Card”. Effectively, it’s a card that has been prepaid and “secured” by a cash deposit.
As an example, you could deposit with the bank $500 that you will no longer have access to and they give you a $500 secured credit card. This card operates just as if it were a “real” credit card, but they hold the money to keep their loan of $500 to you secure (the name is genius).
Use it often, use the tips below in maintaining a good credit score, and you’ll be well on your way!
Option 2: CreditStacks credit card
CreditStacks offers a free (no monthly or yearly cost, but there are charges associated with not paying off your debts like others) credit cards to those who have moved to the US primarily based on their reported income.
The process is entirely online and is really quite simple. You are posted a credit card within a couple weeks (for me it was only a few days) which is then activated (and completely managed) by an app on your phone. I was approved instantly for a $5,000 credit limit based on a letter I sent in from my employer, a copy of my passport, and another identifying document (again, all submitted online which is a rarity here).
The card is a Mastercard so is usable everywhere I’ve tried and for everything that I’ve tried to do, it’s worked well.
To get started, you can use my affiliate link which is: https://www.creditstacks.com/?promo=expatjosh and sign up.
Option 3: Talk to your bank
Banks and credit card companies here are desperately competitive and will try do get your business in any way they can. Describe your situation, and you never know, you might get lucky! American Express has also been known to give out credit cards more easily than some of the other banks. Here’s another link, that gives me a little credit if you do sign up!
Important things to remember
Your credit score depends HEAVILY on a number of things:
- Building credit as early as possible (“age of credit history”) is important (longer = better, and this only applies to credit accounts, not checking/savings);
- If someone asks for a “Hard pull” or “Hard inquiry” on your credit, really be sure that it is essential. It effectively means they want more than just a number, and every time someone does this, it affects your score negatively (slightly);
- Credit utilization basically refers to the percentage of credit you are using of what you have available. You want to keep that below 10% where you can (e.g. If you have a $500 credit limit, only use $50 of it);
- On that, it’s also relevant how many credit facilities you have. You want to keep it relatively low, but everyone will have a different opinion of what is ideal here (I would suggest ~3).
- On-time payment history is essential. Don’t be late on any money you owe for any reason;
- The number of bad marks against your credit. Pay your bills, on-time, and frequently; and
- Your income does play a part and obviously, this one isn’t as easy. In very short: The more money you earn, the higher amount of debt you’re basically allowed.
DO NOT BE LATE PAYING YOUR CREDIT CARD OFF!
Also remember to look up the fee schedule, terms, and conditions of the card you’re applying for. You don’t want to be bitten when it comes time to pay.
Good luck! Let me know how you go!