Credit Cards for New Immigrants

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Million Mile Secrets reader Alex emails:

My parents-in-law recently moved to US and obtained Social Security Numbers and Green Cards.  I want them to start a credit history, so they can enjoy sign-up bonuses as we are.  Are there any credit cards they can apply for without credit history?  Do you think I should add them as authorized users to my credit cards (will it help to obtain credit history)?

Alex’s in-laws will have a hard time getting approved for most miles and points credit cards because they don’t have a credit history.  Banks are reluctant to lend to those with no credit history, including students and folks new to the US.  But there are ways they can establish and build credit!

Credit Cards For New Immigrants

Alex Wants His In-Laws to Build Their Credit History so They Can Get Big Travel With Small Money!

Ways to Build a Credit History

1.   Add In-Laws as Authorized Users

Because Alex already has miles and points credit cards, he could add his in-laws as authorized users on his accounts if he has good credit.

This will start a credit history for his in-laws, because the payment history for the account will be included on their credit reports.  As long as Alex trusts them (because he’ll be liable for their spending) and they don’t start maxing out their cards, this is an easy way to get a credit history going!

Later, when they’ve established good credit, Alex’s in-laws can apply for these cards on their own and still get the sign-up bonus.

2.   Apply for Secured Credit Cards

Alex’s in-laws could apply for secured credit cards without having a credit history.  To get a secured card, you have to make a cash deposit (usually at least ~$300 to ~$500) and that amount becomes your credit limit.  It’s like getting a secured loan from the bank.

Credit Cards For New Immigrants

Secured Cards Require a Cash Deposit but Will Help Build Credit History

Secured cards are a good way to build a credit history because you can make a few purchases each month, pay them off in full, and show the bank you can use credit responsibly.

Do NOT carry a balance on a secured card, because it will defeat the purpose (and cost interest!).  Secured cards usually have a high interest rate.

Here are some secured cards that earn miles and points.  They’re issued by USBank and all charge foreign currency fees.  I would say they’re mostly equal in benefits, although the LAN sign-up bonus is a little higher (but still not great).

The sign-up bonus and benefits on these cards are NOT as good as regular miles-and-points earning cards, so I wouldn’t sign-up for them unless you absolutely need a secured card.  And choose 1 that earns miles you can use!

1.   AeroMexico Secured Visa

Link:   AeroMexico Secured Visa

With the AeroMexico Secured Visa, you get:

  • 5,000 miles after your 1st purchase
  • 2 miles per $1 you spend on gas and groceries
  • 1 mile per $1 you spend on all other purchases
  • One $99 Companion Ticket at sign-up, and again every year
  • 10% discount on AeroMexico tickets
  • Annual fee of $25, waived for the 1st year
2.   Avianca Secured Visa

Link:   Avianca Secured Visa

With the Avianca Secured Visa, you get:

  • 5,000 miles after your 1st purchase
  • 1 mile per $1 you spend
  • 15% discount on Avianca excess baggage fees
  • $500,000 travel accident insurance
  • Annual fee of $25, waived for the 1st year
3.   LAN Secured Visa

Link:   LAN Secured Visa

With the LAN Secured Visa, you get:

  • 10,000 miles after your 1st purchase
  • 1 mile per $1 you spend
  • 10% discount on LAN purchase (once a year)
  • Annual fee of $25, waived for the 1st year
4.   Korean Air Secured Visa

Link:  Korean Air Secured Visa

With the Korean Air Secured Visa, you get:

  • 5,000 miles after your 1st purchase
  • 1 mile per $1 you spend
  • 1,000 miles each year you renew the card
  • Annual fee of $50, NOT waived for the 1st year

Your monthly payments and good spending habits will be reported to credit reporting agencies, and after using the cards for a few months, you can start applying for unsecured cards.

3.  Apply for Entry-Level Credit Cards and Store Cards

Banks like Capital One have credit cards specifically for those with lower credit scores or limited credit history.

The Capital One Classic Platinum only requires average credit.  And you’ll get a higher credit line after making your 1st 5 monthly payments on time.

And if Alex’s parents-in-law are already traveling abroad, they’ll benefit immediately because Capital One doesn’t charge foreign transaction fees.  However the card has an annual fee and no sign-up bonus.

The Barclaycard Rewards MasterCard also only requires average credit.  There’s no annual fee and you get:

  • 2,500 bonus points after your 1st purchase
  • 2X points per $1 spent on gas, grocery stores, and utilities
  • 1 point per $1 on all other purchases

You can use your points to pay for any purchase of at least $25 made within the last 30 days.

And store cards such as the Target or Macy’s credit card are often more lenient about applicant’s credit scores.  You might not even need to be a US resident to get a store card!

Credit Cards For New Immigrants

Store Cards, Like Target, Can Be Much Easier to Get

Alex’s in-laws could apply for a few entry-level or store cards after a few months of using secured cards.  Then make a few purchases each month and pay the balance off in full.  Again, they’ll show the bank they’re trustworthy and improve their credit history and score.

After ~6 months, they could start applying for miles and points cards!

4.   Apply for Miles & Points Cards

Many miles and points credit cards with high sign-up bonuses require excellent credit.  But some, like the Chase Freedom or American Express cards don’t require a very long credit history.

Alex could encourage his in-laws to start with these cards (after establishing a credit history) to earn points.  And they’ll start building a history with 2 of the biggest banks in the miles and points business.

Then, after they’ve developed a relationship with American Express & Chase, they could consider applying for some of the bigger reward cards, like the Chase Sapphire Preferred or Barclaycard Arrival.

Bottom Line

If you’re new to the US, you won’t have a credit history, but there are ways to build and establish good credit.

Alex should start by adding his in-laws as authorized users on his credit cards.  Then, have them apply for a secured credit card or an entry-level card from Barclaycard or Capital One and start using it and paying it in full each month.

After a few months, they could apply for entry-level unsecured cards or store cards.  Once their credit is established (in about ~6 months) they could apply for a card like the Chase Freedom which doesn’t require a long credit history.

Eventually, they should be able to apply for rewards cards with large sign-up bonuses and start getting Big Travel with Small Money!

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15 responses to “Credit Cards for New Immigrants

  1. Discover has a secured card that’s probably the best on the market, you can’t apply for it directly but if you’re denied for the regular version they’ll often give you a targeted offer for the secured.

  2. I’ve notice people who would normally be considered prime candidates for secured cards moving straight into non secured cards. Probably a very small group of non secured cards to choose from, but maybe its an advantage to skip a step. Or at least to attempt to skip a step.

  3. farnorthtrader

    I think a better way to establish credit would be to get a secured loan. Whether that is a loan to purchase a car with a very large down payment or a loan to purchase a CD and use the CD as security or a mortgage with a large down payment, it is fairly certain approval and establishes different kinds of credit, making it easier to get credit cards in the future.

  4. Anthony Thomas

    As someone who moved to the US less than a year ago and got their first points card within 45 days of being here, for me #1 thing to look into is Amex’s Global Transfer scheme – if you had an Amex card in another country for over a year they will usually let you open one in another country without credit history/scores there.

    Within 45 days I went from a score of 0 to 750 as they also report the same history you had with the last card, so I’ve got a USA credit history of many years despite not even being here 1 year!

  5. Which amex cards are easier to be approved for?

    • @chuck – Based on reader feedback, the Premier Rewards Gold card.

      @Alex – If you have the Ink Bold or Ink Plus, you can transfer points from your Freedom card to the Ink card and from there to airlines and hotels!

      @ReadyOrNotLetsGo – Insurance is a complex topic with lots of exclusions. I haven’t researched it as yet, so don’t have any suggestion currently.

      @Kent C – It doesn’t hurt to try, and thanks for sharing!

  6. What is the best credit card for a Chinese national who is a nonresident alien?

    They already have a Citibank Visa in China. Would this help them obtain a card in the U.S.?

  7. My wife is an authorized user on my Barkley Arrival card which I have nearly maxed out because of the 0% for 12 months on purchases. We would not revolve a balance except for the 0% no fee offer. Both our transunion credit scores were over 800 but hers recently dropped to 778. Would it help her score to remove her from authorized user status on my maxed out Barkley Arrival card while I am revolving the balance for the remaining 9 interest free months ? Thanks for all the money your tips and guidance have saved us. From Southwest Companion Pass to Chase Ultimate rewards and trips to Hawaii we have traveled in ways we would never have experienced without your help.

  8. Of the US Bank secured cards mentioned above, which would you recommend to someone interested in getting started with miles and points? I’m interested mostly in travel to Mexico, the caribbean, central and south america. I don’t currently fly on any of those airlines.

  9. I’m in the US on a TN, just got a bran new SSN. Even a lot of these “Verified” cards state online that they require you to at least have a credit record – which you will not if your SSN is bran new. So, I took @Anthony Thomas’s suggestion and checked out my bank for options on opening a US credit card.

    I bank with RBC, and they have a presence in USA (Royal Bank). I managed to get a $15k limit US credit card from them – they used my Canadian credit score in order to apply for it! And best of all, it’s an american card tied to my new SSN, which means I immediately greatly improved my US credit score.

    If you can do this through your bank, this is easily the fastest and greatest way to immediately build credit in the united states. If your bank does not have presence in the US, I’d even try giving visa a call to see what they can do for you.

  10. Hello.
    I’m a foreign military temporarily assigned to serve in USA for 3 years.
    I arrived 9 months ago and was able to get SSN, but due to my status the members of my family are not authorized to receive SSN. According to my credit score is around-ish 700 -710 right now.
    I have an account in Navy federal credit Union, but they don’t allow me to add my wife as an authorized user due to the absence of SSN.
    I’m searching for a solution to that.
    Is it up to anyone knowledge whether there is a bank which I can approach and have a card issued with my wife’s name on it as an authorized user?
    Thank you in advance.

  11. While on H1B Visa, can I apply for a business credit card claiming that I am a sole proprietor of online sales business?