22% of US college students have two credit cards, and it’s easy to see why. Having a line of credit as a student in the US can make managing expenses a lot more convenient – both in the short and long term. Credit cards are also great to have in emergencies.
If you’re moving to the country to study, you may have some misconceptions about how credit cards work. This post outlines how credit cards help – both now and later – and details how international students can get a credit card.
Why Should You Apply for Credit Card as A Student?
There are many benefits to applying for a credit card as a student:
- You learn how to use money: When you move to the US to study, you will have a great deal of independence. However, being independent also requires you to be responsible. Getting a credit card and learning to pay it off on time will help you become disciplined with money.
- Avoid overdrafts: If you use a debit card and withdraw more than what’s in your current account, you will essentially be borrowing money from the bank. This facility is called overdraft. Overdrafting attracts overdraft fees, and with a credit card, you can avoid paying these fees.
- Great for emergencies: As mentioned earlier, you can use a credit card to make a purchase that you would otherwise not be able to afford.
- Deals and cashback: Credit card issuers often provide their customers with deals and cashback that save them money.
- Build good credit: Building good credit will allow you to get a loan for a big purchase like a car or a house. You should aim to build good credit before your education period ends.
After you use the credit card to make a purchase, you are given a grace period to pay off the money you owe. If you pay what you owe back in full, the issuer will not charge you any interest.
Not paying your bill and carrying a balance to the next month attracts interest. The amount you pay depends on your credit card’s Annual Percentage Rate, including the interest rate and other costs imposed by the issuer.
Credit Card’s Importance for Building Credit
Building credit may not be a priority for international students, but it certainly should be. This is because lenders offer financial products like credit cards and loans only to excellent credit scores.
To build a good credit score, you must avoid leaving the credit card bill unpaid or having outstanding balances. Keeping your balance under 30% of the credit limit also helps improve your credit score.
If you build good credit when you’re a student, you will have the ability to, for example, secure a low-interest personal loan. You could also get a mortgage, a better credit card, or a lower rate on car payments with a good credit score.
But the benefits of good credit are not just limited to better approval rates and lower interest rates. Good credit allows you to get the best terms on any credit product. This means higher credit limits and larger loan amounts.
You could also negotiate a longer term for your loan if you have good credit.
One of the best things about improving your credit score is the benefits your card issuer will offer you. The best credit cards give you high rewards rates, lounge access, and credits on dining and travel, among other benefits.
There are rewards credit cards for those with lower credit scores, but you will miss out on many benefits good credit cards offer.
Can You Get a Credit Card Without SSN?
Credit issuers pose different requirements, and you will need to go through every issuer’s requirements thoroughly.
Most credit card issuers require you to have an SSN to be eligible for a credit card. International students, whether they have an F-1, M-1, or J-1 visa, can get a credit card if they have a Social Security Number.
Applying for a social security number requires you to submit evidence of your immigration status to the Social Security Administration and prove that you’re authorized to work in the country.
It’s important to note that F-1 and J-1 visa students can only get a social security number if they are employed on campus.
Getting your first credit card as an international student can be challenging. After getting your SSN, open a bank account before getting a credit card. The first few months of getting a credit card require you to be very careful with your finances, and having a bank account will make it easier.
When you find a card issuer that can give you a credit card, all you have to do is apply and submit the documents as requested. Remember to keep track of your money. If you lose track of what you owe, you could end up in credit card debt.
If you are not eligible for an SSN, you could apply for an ITIN, but getting a credit card with an ITIN can be very challenging. Not every issuer offers a credit card to an international student with an ITIN. I recommend applying for an SSN and completing every formality to make getting a credit card easier.
Credit Card Companies That Give Credit Cards to Students
There is no shortage of companies that will give you a credit card. Here are some of them:
1. Citibank
Citibank offers credit cards like the Citi Rewards+℠ Student Card. The company charges 0% APR for the first seven months and has a $0 annual fee. You earn points on all purchases that can help you save a lot of money.
2. Bank of America
It is the country’s second-largest bank and offers students accounts with zero account and overdraft fees. You can get the Cash Rewards or Travel Rewards Credit card, depending on your priorities. The annual fees are $0 for both cards, so you can get the one that offers you better benefits depending on your circumstances.
3. Capital One
Getting the Journey Student Rewards Card is the right move if you’re looking to build responsible credit habits. It incentivizes paying bills on time by offering cashback bonuses for timely payments and a $60 subscription credit.
4. Deserve
The Deserve EDU Mastercard is right for those international students that don’t have an SSN. The card offers a low APR and benefits like 0 annual and foreign transaction fees.
5. Petal
The Petal card doesn’t require you to have an SSN or ITIN. It’s one of the best cards for international students looking to learn building credit. The company uses a “money score” to determine creditworthiness, and the card doesn’t affect your credit score.
6. Discover
The Discover it Student Card is a great option if you’re looking for a card with a cashback program that saves money. The card incentivizes good grades by offering a cashback bonus.
7. Chase
The Freedom Student Credit Card gives students a $50 bonus and good-standing rewards right off the bat. There is no annual fee, and the credit line continually increases. But the best thing about it is that it is also available for international students with an ITIN.
Secure Credit Cards for F1 Students: How Do They Work?
Secure credit cards are cards that require a deposit to get. The card issuer then gives you a credit line that is either equal to or a multiple of your deposit amount.
As you use the card, your credit line increases, and your credit score improves. After your credit score has improved enough, you can apply for an unsecured card.
Your F1 status isn’t relevant to getting secured credit cards. You can get a secured card as long as you have an SSN.
If you’ve been working in the country and have had a bank account for long enough, you may not need to get a secured card to build up your credit score. However, depending on your situation, you could get an unsecured card the first time around.
Best Secured Credit Cards for F1 Students
Getting a secured credit card is a good starting point for building credit and extending credit lines. Here are the top three secured credit cards for international students.
1. Capital One Platinum Secured Credit Card
If your intention with getting a credit card is low-cost credit improvement, consider getting the Capital One Platinum Secured card. It has no annual or foreign transaction fees and offers a $200 credit for a security deposit as low as $49.
2. OpenSky Secured Credit Visa Card
If you have bad credit or cannot get a credit card because of the lack of credit history, you should get an OpenSky Secured Credit Visa Card. The company doesn’t check your credit score if you apply for this credit card, guaranteeing that you will get the credit card.
3. First Progress Platinum Select MasterCard
Getting the First Progress Platinum Select card also doesn’t require a credit check. You can get this card quickly by putting down a $200 deposit. While it’s great for building credit, there are other cards offering better perks available for international students.