Janice Lozano
International students can obtain credit cards in the US, which can be useful for building a credit score and accessing credit in emergencies. However, it is important to carefully manage finances to avoid debt. While debt does not magically disappear when moving abroad, it makes debt collection more challenging for issuers. Leaving the country with unpaid credit card debt can have consequences, such as lawsuits, wage garnishment, negative impacts on credit scores, and taxes on debt. Therefore, it is essential to address debt issues before travelling or residing abroad.
| Characteristics | Values |
|---|---|
| Can international students get credit cards? | Yes, but the process is more difficult than for non-international students. |
| What do international students need to get a credit card? | A U.S. bank account, an Individual Taxpayer Identification Number (ITIN), a Social Security Number (SSN), or a co-signer. |
| What are the risks of leaving the country with credit card debt? | Your credit score will suffer, you may be sued, your wages may be garnished, and your assets may be seized. |
| Can credit card debt follow you to another country? | Technically, no, but creditors and collectors will continue trying to get you to pay it back. |
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What You'll Learn
International students can get credit cards with no credit history
There are a few options for international students seeking a credit card in the US. One option is to apply for a secured credit card, which requires a deposit that becomes the cardholder's credit limit. The card can be used like a traditional credit card, and monthly payments will be reported to a credit bureau to help build a credit history. After six to twelve months of consistent payments, cardholders may have enough credit history to get an unsecured credit card that does not require a deposit.
Another option is to find a co-signer for the credit card application. A friend or family member can co-sign, vouching for the applicant's trustworthiness. However, it is recommended to try getting a credit card independently before resorting to this option.
Some credit card companies also offer cards specifically for international students. Citibank, for example, offers a credit card for international students with no extra fees and an excellent global transfer service. Capital One also offers the Platinum Credit Card and Quicksilver Card, which are good options for those with zero or minimal credit history. The Platinum card has no annual fees, while the Quicksilver card has an annual fee of $39 and is recommended for those with a substantial income.
Additionally, international students with an F-1 or M-1 visa status, allowing them to work legally in the US, may be able to apply for a Social Security Number (SSN). With an SSN, students can access a wider range of credit card options. Alternatively, students can apply for an Individual Taxpayer Identification Number (ITIN) from the IRS, which some credit card companies accept in place of an SSN.
While it is possible for international students to obtain a credit card with no credit history, it is important to carefully consider finances and plan accordingly. Building a solid US credit history by making timely payments is crucial, as it can impact future loan and credit applications, as well as other aspects of life, such as finding a job or a place to live.
Lastly, it is important to note that credit card debt should not be taken lightly. Moving abroad does not make debt collection easier, and creditors can take legal action to garnish wages and seize assets. Therefore, it is essential to manage credit card finances responsibly.
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Credit card debt doesn't disappear when moving abroad
Credit card debt is a serious issue that should not be taken lightly. While moving abroad with unpaid credit card debt may seem like a fresh start, it is important to understand that your debt does not disappear just because you have left the country. Your debt will continue to exist, and you will still be expected to repay it.
One of the consequences of moving abroad with unpaid credit card debt is the negative impact on your credit score. Credit scores are country-specific, so while your US-based credit score cannot follow you to another country, it will remain frozen in time, and you will need to rebuild your creditworthiness from scratch. This can make it difficult to borrow money or establish residency in your new country. Additionally, if you ever return to the US, you will be faced with the same poor credit score you left behind.
Creditors and debt collectors will also continue their attempts to collect payment from you, even if you have moved abroad. While it may be more challenging for them to track you down, they may resort to phone calls, letters, or even lawsuits to try to recoup the debt. If you ignore a debt collection case or fail to appear in court, a default judgment may be ordered against you, allowing creditors to garnish your wages or seize your US-based assets, such as property, income, savings, or other accounts.
To avoid these consequences, it is always best to try to pay off your credit card debt before moving abroad. If that is not possible, be communicative with your credit card issuer or debt collectors about your situation and when you plan to make payments. They may be willing to negotiate payment terms or offer hardship programs to help you manage your debt. Additionally, seeking financial counselling or debt management services can provide you with guidance and support in dealing with your credit card debt.
In summary, moving abroad with unpaid credit card debt is not a solution to avoiding repayment. Your debt will continue to follow you, and you may face severe long-term consequences that could affect your finances and creditworthiness in your new country as well as upon your return to your home country. It is always best to address your debt directly and seek help if needed.
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Creditors can sue for unpaid debt
International students can benefit from having a credit card when studying outside their home country. It can help them build a credit score and is useful in emergencies. Citibank, for example, offers a credit card for international students with no extra fees and an excellent Global Transfer service. However, it's important to understand the challenges of owning a credit card, such as accruing debt.
If you have unpaid credit card debt, creditors can take legal action and sue you. While debt collectors have a limited amount of time, known as the "statute of limitations," to sue you, they are well within their rights to do so. The statute of limitations typically starts when you miss a payment, and the length of this period depends on the type of debt and the laws of your state. If the statute of limitations has not expired, it is essential to respond to the lawsuit to protect yourself from additional financial difficulties. You can respond either personally or through a lawyer by the date specified in the court papers. By responding, you are not agreeing that you owe the debt, and the debt collector must prove to the court that the debt is valid. If you ignore the lawsuit, the court may issue a default judgment, allowing creditors to garnish your wages and seize your property.
If you leave the country with unpaid credit card debt, you may face several consequences. Your credit score will suffer, and you may be sued and have your wages garnished if you return to your home country. Additionally, you may have to pay taxes on your debt. While your debt technically remains within the country's jurisdiction, it can still cause problems if you ever need to return.
To avoid these issues, it is advisable to clear your debt before travelling or to respond promptly and seek legal counsel if you are sued. Understand your rights under the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices. Additionally, be aware of the statute of limitations and seek legal advice if needed.
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Building a credit score as an international student
Building a good credit score as an international student in the US is important, as it can impact your ability to rent an apartment, buy a car, or even get a job. Here are some tips to help you build your credit score:
Start building your credit profile as early as possible
The length of your overall credit history is a primary factor in achieving a higher credit score. It takes time to build credit, so it's best to start as soon as you can.
Get a credit card
One of the easiest ways to build credit as an international student in the US is to get a credit card and use it responsibly. Credit cards are widely used in the US, and having one can make it easier to do things like buying things online or renting a car. Use your credit card for daily purchases and pay off the charges each month to build a history of steady payments, which lenders like to see. Set up automatic payments for at least the minimum amount due each month to ensure you never miss a payment.
You don't need a Social Security Number (SSN) to start building credit
While having an SSN makes it easier to build credit, it is not necessary. There are credit cards designed for international students, such as the Capital One Platinum Credit Card, which does not require an SSN.
Report your rent payments
Rent payments are not automatically reported to credit bureaus, but Experian's RentBureau now accepts rent reports. Registering with them will help make your off-campus housing costs count towards your credit score.
Make payments on time
Whether it's credit card payments or another type of loan, make sure to always make your payments on time. Chronic or consecutive missed payments can significantly impact your credit score.
Keep credit utilization in mind
Credit utilization refers to the amount of your available credit that you're using at any given time. For example, if your credit limit is $5,000 and you've used $2,500, your credit utilization is 50%. High credit utilization can negatively impact your credit score.
By following these tips and maintaining responsible financial habits, you can start building and improving your credit score as an international student.
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Credit card options for international students
Credit cards can be a useful resource for international students, allowing them to build their credit score and providing financial support in emergencies. However, obtaining a credit card as an international student comes with its own set of challenges. Here are some options for credit cards that international students can consider:
Citibank Credit Card:
Citibank offers a credit card specifically designed for international students, which does not charge any additional fees. Their Global Transfer service is particularly beneficial for international students as it facilitates the transfer of funds between international accounts.
Capital One Platinum Credit Card:
This card is ideal for individuals with zero or minimal credit history. While it does not require a Social Security Number (SSN), applicants will need an Individual Taxpayer Identification Number (ITIN). This card has no annual fees, making it a cost-effective option for students.
Capital One Quicksilver Card:
Similar to the Platinum card, the Quicksilver card is suitable for those without an SSN. However, this card comes with an annual fee of $39, so it may be more suitable for individuals with a higher income.
Barclaycard:
Barclaycard sometimes accepts applications from students without an SSN, but the application process is challenging and rarely approved, making it a less popular option.
American Express (Amex):
American Express offers the option to apply for a UK-based card if you already have an Amex card in your home country. Additionally, if you don't have an SSN or ITIN, you can apply for an Amex card by getting a friend or family member to co-sign, vouching for your credibility.
Zolve:
Zolve provides international students with the opportunity to apply for a US credit card even before arriving in the country. The only requirements are a copy of your visa, passport, and basic personal information. Zolve accounts have no annual, monthly, or application fees, making them an affordable option.
Student Rewards Credit Cards:
Some credit cards are specifically designed for college students, offering the ability to earn rewards and build credit with responsible use. Examples include the Savor Student card, which provides unlimited cash back on food and entertainment, and the Quicksilver Student card, which offers unlimited 1.5% cash back on all purchases.
It is important to note that while credit cards can provide benefits, international students should carefully consider their finances and expenses to ensure responsible usage. Additionally, students should be aware of the potential consequences of leaving the country with unpaid credit card debt, including negative impacts on their credit score and possible legal repercussions.
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Frequently asked questions
Yes, international students can get a credit card, but the process is more complicated than for residents or citizens.
Requirements vary depending on the credit card issuer. Some require a Social Security Number (SSN), while others will accept an Individual Taxpayer Identification Number (ITIN) or even a visa. Some card issuers require proof of income or that you are over 21.
Discover it® Student Cash Back, Capital One Quicksilver Student Cash Rewards Credit Card, Citibank, and Deserve Edu are all recommended for international students.
Having a credit card can help you build a credit score, which will be useful for future financial needs like student loans, auto loans, or apartment leases. It can also help you learn how to manage your money and be a good backup plan for emergencies.
Travelling abroad to avoid debt is not advisable as it can lead to financial problems if you return to your home country. Your debt doesn't disappear when you move; it just makes debt collection more challenging for issuers.
