Credit 101 for International Students
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This page was created in collaboration with the International Student Advisory Board (ISAB).
International students may consider building credit in the United States for a few reasons:
- Having credit may prepare you for financial opportunities associated with longer-term life in the US (including buying a car or home)
- Using credit cards can provide many financial incentives, like reward programs and zero international transaction fees
Remember that credit is debt. Using debt can be costly when not used carefully. To learn more about managing your credit, we recommend also reading our pages about Responsible Debt Habits and Making Borrowing Decisions.
First, let's explain the difference between debit and credit. Purchases made with a debit card use your money from your bank account. When you make a purchase with a credit card, you are borrowing money from a bank to make a purchase. The bank will later send you a bill (usually within a month) that you must repay using your own money.
Many cards will offer you rewards on your purchases, either as cash back or as points. Example: A card may offer 3% cash back on all purchases. If you spend $350 in a single month, that would earn you $10.50 cash back.
Using a credit card is one of the easiest ways to build credit and set yourself up for a longer life in the US. Having a high credit score can help you access better interest rates when you apply for debt in the future. In addition, many banks will only give you a credit card if you have a good score. Learn more about credit scores from Financial Wellness @ Penn.
Some credit cards will offer you a cash bonus if you spend a certain amount in a few months after opening the card. Example: A card may offer you $200 when you spend $1,000 within the first three months of opening the card.
| Bank | Pros | Cons | Branch Near Campus |
|---|---|---|---|
| Discover | No credit card history required | Social Security Number required No in-person branch, online application only | No |
| Bank of America | No Social Security Number required (as long as there is a deposit in your checking account) No credit history required (contingent on deposit in your checking account) | Yes | |
| Chase | Typically provides competitive rewards (travel, hotel, etc.) | Social Security Number required Credit history required | Yes |
| PNC | Penn has a relationship with PNC | Social Security Number required Credit history required | Yes |
| American Express | No dining decline | Social Security Number required | No |
| Capital One | Typically provides competitive rewards (travel, hotel, etc.) | Social Security Number required Good credit history required | No |
Example 1
- Begin working at an on-campus job and apply for a Social Security Number (SSN).
- Apply for a credit card with one of the banks listed above.
- After several months of using the credit card, begin tracking your credit score.
- Once you have an established credit history, apply for a credit card with more competitive rewards.
- This is not a recommendation, but rather an example of what one student's path could look like. Please talk with the Financial Wellness @ Penn team before applying for a second credit card.
Example 2
- If you don't plan to work on campus (meaning you won't be eligible for a SSN), open a checking account with a bank that doesn't require an SSN.
- Apply for a credit card through your bank.
- After several months of using the credit card, begin tracking your credit score.
- Once you have an established credit history, apply for a credit card with more competitive rewards.
- This is not a recommendation, but rather an example of what one student's path could look like. Please talk with the Financial Wellness @ Penn team before applying for a second credit card.
