Apply for secured or unsecured credit card

Credit CardJust arrived in USA to live, work or study, your dream will be to own a decent car, rent a good quality apartment or buy a new/old home after few years in USA. None of it can happen without a good credit history. But why a bank/lender should lend you anything as you don’t have any history of borrowing and paying back the debt on time? So do not ask friends or relatives or employer to add you as one of the authorized credit card user in USA. This will not help anything in building a credit history. And the credit history is really important.

Read more about importance of the credit history

If you never had a credit history in USA. Best way to start building a decent credit history is to apply for Secured Credit Card.To open a secure credit card you can ask the bank where you opened the checking account. Please note that using check card ( a debit card) associated with your checking account will not help you build the credit history.

A secured credit card is a type of credit card secured by a deposit account owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Visa Credit CardThus if the cardholder puts down $1000, they will be given credit in the range of $500–$1000. In some cases, credit card issuers will offer incentives even on their secured card portfolios. In these cases, the deposit required may be significantly less than the required credit limit, and can be as low as 10% of the desired credit limit. This deposit is held in a special savings account.

The cardholder of a secured credit card is still expected to make regular payments, as with a regular credit card, but should they default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows for building of positive credit history. Once you have a good positive credit history you will get your deposit back within one or two year. There is particularly no preset limit that you must deposit with bank to open secured credit card. You can start as low as $250 or may be less. If you don’t have any money, borrow from your friends in USA to open secured credit card account. Some credit union banks offers unsecured credit card without deposit. Ask friends already living in USA about obtaining unsecured credit card without credit history they might have clue on it.

You should know that..

  • If you add yourself on your friend’s credit card, you are helping your friend building his credit history.
  • Credit card obtained from overseas country do not help you build your credit history in USA.
  • Using debit card will not help you build the credit history as debit card transactions are usually not reported to the credit bureaus.
  • If your employer offers you to provide a credit card just for you, you are heping your employer build his credit history.
  • Some credit union banks offers unsecured credit card without deposit. Ask friends around you about obtaining unsecured credit card without any credit history they might have clue on it.
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