Moving to the United States is a significant process for most individuals, whether they are arriving for college, graduate school, or to work. Shifting from one country to another is a stressful and expensive process, while there are so many different things to worry about.
One of the concerns for international students and H-1B workers is their ability to obtain credit cards when they arrive in the U.S. Most people are aware they have to start early with credit cards so they can build up their credit history, but they are unsure how to obtain one as soon as they start school or work in the U.S.
Below is our guide on the various credit card options for international students and workers from other countries.
Credit Cards with a Previous Credit History
Individuals who come to the U.S. to study or work do not necessarily have to go for the lowest tier credit cards. If you have credit established in your home country, it is possible to provide this information to American credit card companies.
Agencies such as Nova Credit help you obtain and transfer those credit details to U.S. credit card issuers, which makes you eligible for better rewards credit cards. It is best to start with one or two credit cards, but leveraging your past credit history gives you a head start on the process.
Credit Cards for People with No Credit History
It is understandable if you do not have any credit history when you arrive in the U.S. Many college and graduate students have not spent more than a few months working in their home countries, while they may not even have a bank account or credit card if they are only 18 or 19.
Obtaining a competitive rewards credit card is nearly impossible if you have no credit history from the U.S. or your home country. But there are other options, such as credit cards targeting students or secured cards.
The Deserve Edu Credit Card is an example of a credit card that targets students, as it does not require a previous credit history. Many newcomers may also want to check with their college or graduate school, as card companies often hold events during orientation week where students can sign up for credit cards.
You may also want to look through a good list of the best credit cards for people with little to no credit.
What is a Secured Credit Card?
Among the options for people who have no credit history when arriving in the U.S. is the secured credit card. Such cards require a deposit to obtain a credit line.
The company may suggest that you pay a $100 deposit to secure a $250 or $300 credit line. Making regular payments can trigger an increase in your credit line every few months, while some companies also make it possible to transition to one of their unsecured credit cards.
While it is disappointing to have to settle for a secured credit card, it is important to remember that it is all about completing the process. Obtaining a secured card, making regular payments, and increasing your credit line only takes a few months. Each timely payment also boosts your credit score, which helps you qualify for better credit cards in the future.
Make Timely Payments and Watch Your Credit Ratio
There are two key strategies that everyone must follow if they wish to quickly boost their credit score until it reaches the 700 to 800 range. These strategies are to make timely payments on all your cards and to keep an eye on your credit utilization ratio.
Timely payments are essential as they ensure you are not getting dinged on your credit score. Every late payment can cost you a few points while you are also having to deal with late fees.
Credit utilization ratio refers to the percentage of your available credit line that you have filled up. Say you have two credit cards and they each have a $1000 limit. If you have borrowed $500 on each of those cards, your credit utilization ratio is 50% or 0.5.
Most experts suggest keeping that ratio at 20 to 30 percent, or even lower, as it shows creditors that you are responsible with how much money you spend on open lines of credit.
By following the above guide, you can obtain a credit card soon after arriving in the U.S. and start building your credit history.