Getting a first Credit Card

American Express Students card

Akalya, when I came to the US 5 years ago, I also got rejected for a credit card when I applied through my LaSalle bank. But then I applied for the students card from American Express and got approved. American express is pretty good about getting you started with a credit card. Here is the link for the students card.

If you would like to check out all the other cards offered by American express, try this link which compares all the cards. Hope one of this works for your cousin.

 

Does he have a bank account in his name? If so, he could apply with the same bank for a credit card. Ususally you have to talk to the bank people, with appropriate employment letter, sometimes salary slips would convince them to approve the card for a low limit.

It also helps if he has the salary direct deposited into the bank.

Talk to various banks, they are very good at explaining what he can do to get the account started.

 

Another way to approach is to take a small loan. Be sure to get one without a prepayment penalty and then pay it off right away so aren't paying a lot of interest. In this way you will get a credit rating that is good. That will start you off. You can also start with store credit cards and and use them a few months paying off immediately to get a credit rating. She can use a debit card until this time for many things.

She should also be very careful to pay untility bills and other bills on time as now that can also affect the credit rating.

 

Yet another thing to do is to apply for a Secured Credit Card. It is a credit card secured by a deposit. For instance you deposit $1000, and the bank issues you a secured credit card with a $1000 limit. The risk to the bank is extremely low (none) since it is secured by the deposit and is not true credit. However the borrower is expected to make regular payments. You will get a monthly bill and statement. The credit card company will also report regularly to credit bureaus, and thus credit history will start building up.

Within about a year of having this card, enough credit will be established, and then you can go for an unsecured card with a higher lending limit.

Most credit card companies offer secured credit cards.

 

Hi Akalya,

When my husband first came to US few yrs back he faced the same situation with many credit cards. Then he applied for American express which right away gave him the credit card with a very little <$500> credit limit which was a good start for us. Once we started paying off the monthly bills without any balance carried over to the next month...i think within a couple of months they raised his credit limit to around $4000.

Hope this helps.

 

Another way is to go for a secured credit card. You have to deposit money say $500 on the account and take a credit card on that $500. The money will be blocked for the first year or two. But it is a good way to develop credit history.

Does your brother have a SSN, payroll.............

 

I would advise her to get a secured credit card to built up her credit history and wait for at least 6 months to get a credit score. After that ask her to apply for any unsecured credit card from the same bank or any other bank.