Internation-Well Credit
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Considerations for International Students
Establishing credit is important for life in the United States because
- Having a credit card is the most accessible ways for international students to build credit
When you make a purchase with a credit card, you are not using your own money. Instead, the bank is lending you the money to make the purchase. However, at the end of the month, you have to repay your credit card purchase using your own money.
Benefits of Credit Cards
Many cards will offer you 1-3% back on your purchases. This means that when you make a purchase with your credit card, 1-3% of the purchase price will be given back to you at the end of the month. This could add up to an extra $20-$30 per month for free.
Foe international students who do not have a credit score, using a credit card is the easiest way to build your credit and yourself up for a successful life in the U.S. Getting a better credit score will help you get better rates when you apply for loans and mortgages in the future. In addition, many banks will only give you a credit card if you have a good score. Examples of brands of credit scores are FICO, VantageScore, Equifax, TransUnion, and Experian.
Many credit cards will offer you a cash bonus if you manage to spend a certain amount in a few months after opening the card. Examples of this could be giving you $200 back when you spend $500 within the first 3 months of opening the card.
Bank Comparisons:
*This is not an exhaustive list nor an endorsement of any particular financial institutions. Please choose an institution that is a good fit for you and your cirsumstances.*
| 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 better rewards (travel, hotel, etc) | Social Security Number required Credit history required | Yes |
| PNC | Social Security Number required Credit history required | Yes | |
| American Express | No dining decline | Social Security Number required | |
| Capital One | Social Security Number required GOOD Credit history required | No |
Make sure to pay attention to the fine print of the credit cards that you are applying for. This will allow you to be aware of any hidden fees or terms and could inform your decision on whether or not to apply for that credit card.
While many cards have 0 annual fees, some cards do charge a fee.
Credit cards charge you 20%-28% of your balance if you do not pay on time and no cashback will be enough to cover this penalty.
The Annual Percentage Rate (APR) is a penalty rate that the bank charges you if you do not pay on time. Many cards will offer you an APR between 0%-5% and low APR offers end after 1-1.5 years after you have had the card.
Sign on bonuses vary from time to time. If you do not have a long enough credit history, it might be good to wait both for the sake of your credit history and the potential for better sign on bonuses.
Every time you make an application, a bank performs a "hard pull" whereby they pull your credit history from credit bureaus. This pull will be documented and will temporarily reduce your total credit score by 10%.
Pre-approval checks do not count as a hard pulls, but they do not guarantee that your application will be successful either.
Potential Strategies
This section provides different scenarios and strategies that you could use if they are similar to your situation. However, everyone has different circumstances that may differ from the scenarios discussed, so make sure to make informed decisions based on your circumstances, such what credit card you would like to apply for.
Applied for a Social Security Number
- You have found an on-campus job
- File an application for Discoevery Credit Card to start building credit
- Once you have had the card for 6 months, you will usually get a credit score, which shows others that you have credit history
- Apply for credit cards from other banks as you build your credit
Do not have a Social Security Number
- Open a checking account at BoA and put in $500 or above into the account
- File an application at BoA credit card
- Once you have the card for 6 months, you will usually get a credit score, which shows others that you have credit
- Apply for credit cards from other banks as you need
Applied for a Social Security Number
- You have found an on-campus job
- File an application for Discoevery Credit Card to start building credit
- Once you have had the card for 6 months, you will usually get a credit score, which shows others that you have credit history
- Apply for credit cards from other banks as you build your credit
Do not have a Social Security Number
- Open a checking account at BoA and put in $500 or above into the account
- File an application at BoA credit card
- Once you have the card for 6 months, you will usually get a credit score, which shows others that you have credit
- Apply for credit cards from other banks as you need
