My First Newcomers Credit Card
Before I moved to United States I read in the Internet that in US every person should have a credit card and must start building his own credit history. But when I came to US I was definitely surprised by the fact that you literally cannot make a step without a credit card here.
In my previous life I had two international VISA debit cards from outside the country. But debit cards are not very popular in USA – and in some cases I could not use my bank cards as I used to do – as a debit card, entering a PIN to approve transaction – sometimes my out of country debit cards just didn’t work.
My first discovery was that it is more easy to use my debit card as “credit card” – so when I was asked what type of card I have I just said “credit”. Every transaction with your credit card needs signing, but there is a certain limit about $10 or $20 below which you need not to sign. That limit is different in different stores or points of sales – I suppose it depends on store policy or processing company used.
Interesting information for me was that you need to earn good credit score not only for borrowing money, getting car loan or mortgage with a good interest rate (that sounds obvious), but also your credit score can used to prove your reliability for renting apartment, leasing anything, renting a car, signing a cell contract and just for any transaction with money involved. So you basically need to have a credit card to be a member of a society in the US.
By the way, it is a very good habit to contstantly monitor your credit score- you can find a helpful services for that, for example Equifax and others.
The main problem for a person who just arrived to the USA is that you enter a vicious circle – you need to have a credit card to start building your credit score but is difficult to get one while you have no credit score yet. When you move to US and receive your Social Security Number (SSN) you get a clean credit score – it is literally equal to 0. In a credit score scale that number means average score – such score can have a person who had several overdue credit card payments or a newcomer with clean credit history.
The second problem is that you cannot apply for every credit card you find in the hope that you will succeed – every time when you complete your application for a credit card if negatively affects your credit score and move it in negative numbers territory. The more attempts you do to apply, the less chance you have.
I considered two options to get my first credit card – to apply for a secured credit card or to try my chance and apply for a credit card with minimal credit limit that requires average (or zero) credit score.
Some information about secured credit card I will provide in another post.
Applying for a secured credit card is not risky – it’s easy to get credit card and almost anyone can get one without any problems. When you apply you usually get a guaranteed approval instantly. But secured credit card is not real credit card – I thought it is just an extra step to it. So what I did – I collected lots of information about credit cards in the web and made a trial to apply for a card that required average credit which I considered I had. What came out of it – in my next posts.
Tell us what do you think.
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