Living or Working Overseas Series: Part 3 – Establish or Re-establish Credit While Overseas
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This series of posts is written by the Wandering US Expat, who’s lived in Australia and Panama. And applied for cards from there!
Don’t let living abroad stop you from getting miles and points bonuses from credit cards!
It’s no secret that US banks lead the world in promotional point bonuses for new customers. They give away lots of points to get a new customer in the hopes that you’ll remain, and spend, with them for years. Lots of non-US folks wish they could get access to the same deals!
But many US citizens and ex-permanent residents, known as expats, often wonder whether they can still get credit cards if they leave or have already left the US. Perhaps they’ve relocated for a job or have gone for an extended trip abroad. Some expats have left permanently to start a new life.
Are you or someone you know in this category?
Figures are hard to determine because the US does not track expats who are traveling or living abroad. But a recent report estimated the number to be living overseas at about 2 to 7 million. There are millions more who leave, or “visit” outside the US for months at a time all year round.
This series will help folks living outside the US have Big Travel with Small Money!
“Living or Working Overseas” Series Index
- Part 1 – You Can Still Get Lots of Cards!
- Part 2 – How to Setup a Bank Account While Overseas
- Part 3 – Establish, or Re-establish Credit While Overseas
- Part 4 – Mail Forwarding Services for the Overseas Expat
- Part 5 – Charge to Your US Cards, Transfer Foreign Currency to Pay Your Bills
- Part 6 – Car Rental Insurance Reductions – For US and Non-US Licensed Drivers
- Part 7 – Dual Citizens/Residents – Get Extra Points!
Your Credit Score – Key to the Cards
Qualifying for miles & points credit cards requires a credit history. Some folks living abroad have let their credit history lapse by not using cards in a while. Or they never established their own credit while living in the US.
What If You Don’t Have Credit?
Since you’ve been away, banks may have closed your credit cards because you haven’t been using them. Or maybe you closed your accounts. If it’s been a long time since you’ve used credit, you may find you no longer have a great credit score or even a credit score at all!
Even if you were a safe credit risk in the past, without an ongoing and active credit file, the banks may determine you to be “risky.” This means it’s time to re-establish your credit.
How to Establish (or Re-establish) Credit
You’ll have to build up your credit.
Some folks have the opportunity to be added as an authorized user on a friend’s or family member’s account to build their credit. Don’t forget this person is responsible for your charges.
But there’s another way to build your credit.
You can sign-up for a secured credit card. Some readers have reported getting approved for miles & points credit cards within 3 to 5 months after starting with no credit at all.
The annual percentage rate of secured cards can be high but that shouldn’t be a problem. Because you should NEVER carry a balance with these cards. You are only using the card to establish credit so you can later get approved for great travel card offers.
You can apply for the Bank of America secured Visa card with an annual fee of $39. You can secure the card with $300 to get a $300 line of credit.
Capital One issues a Capital One® Secured Mastercard®, which usually comes with a very small line of credit of ~$200. The credit is secured or backed by your own money which you deposit. You can deposit $100, and the bank will “extend” you another $100 in credit. There is no annual fee.
Wells Fargo has a secured Visa card with an annual fee of $25. The minimum you can secure your account with is $300. And this becomes your credit line.
All 3 of these cards report to the credit bureaus. So paying your bill on-time will increase your credit score to allow you to get miles & points credit cards in the near future.
Try to charge something each month to the card. Within months you may find you’re eligible for the travel credit cards you want.
You can re-establish your credit so you can qualify for the best miles & points credit card offers. You can begin by becoming an authorized user on someone’s account or by signing-up for a secured credit card and paying your bill in full each month.
In the next post I’ll explain how you’ll receive your new credit cards while you’re living overseas.
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