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 helps generate your credit score, which can impact your eligibility to apply for loans, buy a car, and sign a rental contract
- 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 restaurant purchases. If you spend $100 eating out in a single month, that would earn you $3 cash back.
Using a credit card is one of the easiest ways to build credit and set yourself up for living long-term in the US. Having a high credit score can help you access better interest rates when you apply for debt (such as a mortgage or auto loan) 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 BOA checking account) No credit history required | 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 | Typically provides competitive rewards (travel, hotel, etc.) | 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: Shawn
- Shawn opens a checking account with PNC during orientation.
- He applies to student jobs on campus and is hired to work part-time at the library.
- Since Shawn has obtained an on-campus job, he applies for a Social Security Number (SSN).
- Once Shawn has received his SSN, he applies for a Discover student credit card. He links his credit card and checking account so he can make payments.
- At the end of each month, Shawn checks his statement balance and uses the app to pay his bill from his PNC checking account.
Example 2: Mia
- Mia arrives to the U.S. before orientation and schedules an appointment to open a checking account at Bank of America. She deposits an initial sum of $850.
- During the same appointment, she asks the bank representative for help applying for a credit card. Mia is approved for the card.
- Mia sets up auto-pay so that her statement balance is automatically paid using her connected checking account each month.
