Having a credit card is one of the most important tools for financial stability, building credit history, and managing expenses.
Key Takeaways
- Establishing credit in the US is essential for financial opportunities like loans, housing, and utilities.
- Consider secured cards, student cards, or credit cards for newcomers to start building credit without a US credit history.
- Apply for an SSN or ITIN to access a wider range of credit cards and financial services.
Getting your first credit can be a tall order, especially if you’re an international student or worker who has just arrived in the US. Some of the challenges you may encounter are lacking a US credit history, having no Social Security number, or even choosing the bank that charges a lot of unnecessary fees. Fortunately, we’ve got you covered, and we’ll make it easier for you to apply for your first credit card in the US.
In this article, we’ll give you helpful tips on getting your first credit card in the US with less hassle.
Understand the Importance of Building Credit in the US
Building credit is essential if you want to live in the United States, especially if you’re just new to the country. Having a clear understanding of the importance of a strong credit history opens doors to better financial opportunities and helps with many everyday activities.
Here’s why building credit is important:
- Access to Better Loans: Having a good credit score is necessary if you’re applying for car loans, mortgages, or personal loans. Lenders will use your credit score to decide if you're eligible and what interest rate to offer.
- Easier to Find Rental Housing and Utilities: Many landlords and utility companies check your credit history to ensure you are a reliable tenant or customer. A lack of credit history can make it harder to rent an apartment or open utility accounts.
- Lower Insurance Rates: Some insurance companies use credit history to determine your rates. A strong credit profile can lower your insurance costs.
- Employment Opportunities: Certain employers may conduct credit checks as part of their hiring process, especially for jobs that involve financial responsibility.
Building credit in the US is a long-term investment in your financial future. Even if you don’t plan to stay in the country permanently, having a strong credit history will give you more flexibility and options while you’re here.
Research Credit Card Options for Newcomers
When you're new to the US, finding the right credit card can feel overwhelming, especially without a US credit history. Fortunately, there are options designed specifically for newcomers. Here are some examples:
Secured Credit Cards
These are ideal for those without a credit history. They require a security deposit, which acts as your credit limit. As you use the card responsibly, you build credit, and some issuers may even upgrade you to an unsecured card after a period of on-time payments.
Student Credit Cards
If you’re an international student, many banks offer student credit cards. These typically have lower credit limits and are easier to qualify for. You may need an SSN or ITIN, but some banks may accept other forms of ID.
Credit Cards for Internationals
Some financial institutions cater to internationals and offer credit cards without requiring a credit history or US-based score. These cards often use alternative credit assessments based on income, employment, or international credit records.
Authorized User Accounts
If you know someone with good credit, you could become an authorized user of their account. This helps you build credit by piggybacking off your credit history while you learn to manage your own.
Additionally, consider these factors before applying:
- Check if the card reports to the major credit bureaus.
- Look for reasonable fees (no excessive annual or hidden charges).
- Ensure the card has a path to transition to an unsecured credit card.
Apply for a Social Security Number (SSN) or ITIN
Having a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) is key when you’re applying for a credit card in the US. These identification numbers allow financial institutions to track your credit activity and help establish your financial profile.
Steps to Apply for an SSN
- Eligibility: You can apply for an SSN if you're authorized to work in the US, typically through an F-1, J-1, or M-1 visa. You’ll need employment authorization first.
- Required Documents: Complete the Application for a Social Security Card (Form SS-5). You’ll also need to provide proof of your work status, age, and identity—such as your visa, passport, and employment authorization documents.
- Where to Apply: Submit your completed application and documents in person at your local Social Security office.
If you’re not eligible for an SSN, apply for an ITIN instead. The IRS issues this number to those who are not eligible for an SSN but still need to file taxes or receive taxable income.
Steps to Apply for an ITIN
- Complete IRS Form W-7: Submit this along with proof of your identity and foreign status, such as a passport, visa, or other supporting documents.
- Processing Time: It can take up to 7 weeks to receive your ITIN, so apply as early as possible to avoid delays.
Consider a Secured Credit Card
If you're new to the US and don’t yet have a credit history, a secured credit card is one of the best ways to start building credit. Secured cards work like regular credit cards but require a security deposit, which acts as collateral for the lender.
How Secured Credit Cards Work:
- Security Deposit: You provide a cash deposit, typically between $200 and $500, which sets your credit limit. For example, if you deposit $300, your credit limit will be $300.
- Credit Building: As you use the card, your payment history is reported to the major credit bureaus, helping you establish credit over time.
Why Choose a Secured Card?
- Low Barrier to Entry: Secured cards are designed for people with no or limited credit history, making them ideal for international workers or students.
- Eligibility for an Upgrade: After several months of responsible use, many issuers will allow you to transition to an unsecured card and refund your deposit.
- Credit Building Tool: Every on-time payment helps improve your credit score, which will eventually give you access to better credit products.
Things to Watch Out For:
- Make sure the card issuer reports your payments to the major credit bureaus.
- Compare fees, as some secured cards may charge higher annual or maintenance fees.
- Keep your credit utilization low—aim to spend no more than 30% of your credit limit to maintain a healthy credit score.
Become an Authorized User or Explore Alternative Credit Cards
If you’re struggling to get approved for your credit card, becoming an authorized user or exploring alternative credit cards can be one of the best options for starting your credit journey.
How It Works
An authorized user is added to someone else’s credit card account, allowing you to use the card while benefiting from their credit history. The primary cardholder is responsible for the payments, but your credit history will still improve as long as the account is managed well.
Who Can Help
A family member or close friend with a good credit score may be willing to add you as an authorized user. Just ensure you both agree on spending limits and payment responsibilities.
Credit Benefits
As an authorized user, you don’t need a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Plus, it’s a low-risk way to build credit.
In summary, these are some of the best tips for getting your first credit card in the US. These may be confusing at first, but the information here will help you get started with your credit card journey.
Lastly, if you want an easier way of getting a US credit card, you can sign up with Adro. Adro requires no SSN or ITIN to sign up, and there’s no credit check when opening an account. When you make purchases using your Adro credit card, you’ll also have the ability to build your credit score. Learn more
