Janice Lozano
As an international student, you may find it challenging to get a credit card in some countries, especially if you don't have a local credit history or a Social Security Number (SSN). However, having a credit card can be beneficial for international students in several ways. Firstly, it can help you build your credit score, which is essential if you plan to stay in the country long-term and need to apply for loans or mortgages. Secondly, credit cards can provide perks and rewards, and they can also be a useful backup during emergencies. Additionally, with a credit card, you can avoid overdraft fees associated with debit cards. While getting a credit card as an international student may be difficult, there are options available, such as becoming an authorized user on someone else's account, applying for a secured credit card, or using alternative services like Zolve, which offers credit cards to international students without an SSN.
| Characteristics | Values |
|---|---|
| Benefits | Can be used in emergencies, avoids overdrafts, provides perks/rewards |
| Applicability | Requires SSN, ITIN, or a co-signer |
| Credit Score | Helps build credit score, especially in the US |
| Employment | Requires proof of income/employment |
| Alternatives | Secured credit cards, credit builder loans, becoming an authorized user on someone else's account |
| Other Requirements | Age, credit history, bank account, passport |
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What You'll Learn
Building a credit score
Get an SSN or ITIN
The first step to building a credit score is to obtain either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). An SSN is typically acquired through employment, so if you are eligible to work in the US, you can apply for an SSN. If you are not eligible to work, you can apply for an ITIN, which is a nine-digit number in the same format as an SSN.
Open a US Bank Account
Opening a US bank account is a good next step, as it will make it easier to manage your money and keep track of what you owe. You can also use tools like UltraFICO and Experian Boost to report positive account activity to credit bureaus, such as rent and utility payments, which will help boost your credit score.
Get a Secured Credit Card
With either an SSN or ITIN, you can apply for a secured credit card. This type of card requires a deposit, which becomes your credit limit. You can use the card like any other credit card, and monthly payments will be reported to credit bureaus, helping to build your credit score.
Become an Authorized User
Another option is to become an authorized user on a trusted friend or family member's credit card. This can help both parties build good credit, but the primary cardholder should understand they are responsible for any debts accrued.
Student Credit Cards
There are also credit cards specifically designed for students, which offer rewards and the ability to build credit with responsible use. These cards often have lower barriers to entry, so you may qualify with limited or no credit history.
Other Tips
- Avoid cancelling your credit card, as this could negatively affect your credit score.
- Only use your credit card to purchase items you can afford.
- Pay the full balance on your card each month to avoid paying a lot of interest.
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Access to credit without an SSN
As an international student in the US, you can face several challenges when applying for your first credit card. Most credit card applications require a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), and not many international students are eligible for these.
However, there are a few options for gaining access to credit without an SSN:
Get an ITIN
Some credit card issuers will accept an ITIN for a credit card application if you do not have an SSN. You can request an ITIN through the Internal Revenue Service (IRS).
Become an authorized user
If you know someone who is willing to let you become an authorized user on their card, you can gain access to credit this way. The primary cardholder should understand that they are chiefly responsible for any debts accrued.
Secured credit cards
Secured credit cards are another option for international students without a US credit history. These cards are backed by collateral, usually a security deposit from the cardholder, which becomes the credit limit. The card can be used like any other credit card to make purchases that don't exceed the credit limit. Most secured credit cards require an SSN or ITIN to apply, but some do not.
Open a US bank account
Having a US bank account can make it easier to manage your money and keep track of what you owe. It also tells a credit card company that you have monetary assets in the country and may make it easier to apply for a credit card later. You can use tools like UltraFICO™ and Experian Boost to report positive account activity to credit bureaus, which can help boost your credit score.
Get a part-time job
Depending on your student visa, you may be able to secure part-time employment, which will qualify you for an SSN and serve as proof of income for getting a credit card. A part-time job will also prove that you can pay your credit card bill on time.
It's important to note that while these options can help you gain access to credit without an SSN, building a good credit history may still take time and responsible financial behaviour.
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Avoiding overdraft fees
As an international student, you can avoid overdraft fees by getting a credit card. With a debit card, you can easily overdraft your account when paying monthly bills and fees. However, with a credit card, you can plan to pay these bills and avoid an overdraft fee from your bank.
Get an SSN or ITIN
Most credit card applications require a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), with the former being more commonly accepted, especially for online applications. You can get an SSN by securing part-time employment (if your student visa allows it) or through on-campus employment. If you are not eligible for an SSN, you can request an ITIN from the Internal Revenue Service (IRS).
Open a US bank account
Having a US bank account can make it easier to manage your money and keep track of what you owe. It also establishes your presence in the country and may make it easier to apply for a credit card.
Build credit history
Credit card companies will check your credit history when you apply for a credit card. As an international student, you may not have a US credit history. You can build one by using new credit reporting tools like UltraFICO and Experian Boost, which allow you to report positive account activity such as utility bill payments, subscriptions, and rent payments.
Become an authorized user
You can become an authorized user on someone else's credit card account. This gives you access to credit, but the primary cardholder is responsible for any debts you accrue.
Apply for a student credit card
Student credit cards are designed for young college students applying for their first credit card. They often have benefits like no annual fees and cashback rewards. However, you will still need a credit history (or a co-signer) and an SSN or ITIN to apply.
Apply for a secured credit card
Secured credit cards are a good option for international students without a US credit history. They require a deposit, which becomes your credit limit, and can be used like a regular credit card. Making on-time payments and keeping your credit utilization low will help build your credit score.
Remember, getting a credit card as an international student can be challenging, but it is possible. Compare the requirements and perks of different card issuers to find the best option for you. Also, be a responsible spender and only use your credit card for items you can afford to avoid accumulating debt.
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Rewards and perks
As an international student, you may be eligible for credit cards that offer rewards and perks. These cards can help you build credit and provide you with benefits such as no annual fees and some cash-back rewards. Here are some of the perks and rewards you can expect from various credit cards for international students:
No Annual Fees
Some credit cards designed for international students, such as the Capital One SavorOne Student Cash Rewards Credit Card and the Capital One Quicksilver Student Card, do not charge annual fees. This can save you money in the long run, as you won't have to worry about paying a yearly fee just for having the card.
Cash-Back Rewards
Certain credit cards offer cash-back rewards on specific categories of purchases. For example, the Capital One SavorOne Student Cash Rewards Credit Card offers 3% cash back on dining, entertainment, streaming services, and grocery store purchases. Meanwhile, the Capital One Quicksilver Rewards for Student card provides 1.5% cash back on every purchase. These rewards can add up, effectively giving you a discount on your everyday spending.
Security Alerts and Card Lock
The Capital One Quicksilver Student Card and the Savor Student Card offer security alerts and card lock features. These tools can help you monitor your account and protect yourself from unauthorized transactions, especially while travelling or living abroad.
No Foreign Transaction Fees
The Capital One Quicksilver Student Card and the Savor Student Card also waive foreign transaction fees, making them ideal for international students who plan to travel or study abroad. You can use these cards overseas without incurring additional charges for each transaction.
Build Credit History
Credit cards can be a valuable tool for building your credit history, which is essential if you plan to stay in the country long-term. A strong credit history can improve your chances of securing loans, renting an apartment, or applying for a mortgage. By using your credit card responsibly and making timely payments, you can establish a positive credit history.
While obtaining a credit card as an international student can be challenging due to the requirements for Social Security numbers or credit history, there are options available that offer various perks and rewards. It is important to carefully review the requirements and benefits of each credit card issuer to find the best option for your needs.
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Emergency purchases
As an international student, having a credit card can be a useful financial safety net in case of emergencies. For instance, if you need to make a purchase that you cannot otherwise afford, a credit card can be a helpful backup option. This can help you avoid overdraft fees, which can occur if you pay bills and fees with a debit card that exceeds your account balance.
However, it is important to be aware of the challenges that international students may face when applying for a credit card in a foreign country. Most credit card applications require a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), and not all international students will be eligible for these. Additionally, having a limited or non-existent local credit history can make it more difficult to get approved for a credit card.
To overcome these challenges, there are a few options available to international students:
- Secured credit cards: These are designed for individuals with limited or no credit history. They require a security deposit, which acts as the cardholder's credit limit. Secured credit cards can be a good option for international students who may not have an extensive credit history in the country they are studying in.
- Student credit cards: Some credit cards are specifically designed for students, offering benefits such as no annual fees and cash-back rewards. These cards usually require an SSN or ITIN, but they may be more accessible to students with limited credit history.
- Becoming an authorized user: If you know someone willing to add you as an authorized user on their credit card, this can be a way to access credit. However, the primary cardholder is responsible for any debts accrued.
- Alternative options: In some cases, international students may be able to apply for a credit card without an SSN or ITIN. For example, Zolve offers a credit card for Indian students moving to the U.S., and Citibank has become a popular choice for international students.
While having a credit card as an international student can provide financial flexibility in emergencies, it is important to use it responsibly and only spend what you can afford to pay back. Building a positive credit history can have long-term benefits, but mismanaging your credit card can lead to debt and negatively impact your credit score.
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Frequently asked questions
Having a credit card as an international student can help you start building your credit score, which is important in the US. It can also be useful in emergencies, and it can help you avoid overdraft fees.
The most common ways to get a credit card as an international student are to get a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), open a US bank account, or become an authorized user on someone else’s account. You can also apply for a credit card in your home country before your trip.
Some credit cards specifically designed for students include Capital One SavorOne Student Cash Rewards Credit Card and Capital One Quicksilver Rewards for Student. Citibank also offers a credit card for international students with no extra fees.
It is hard to determine what a good interest rate is, so you will have to do your research and compare the rates of different card issuers. As of December 2019, the average credit card interest rate was 17.30% in the US.
