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If you don’t have a credit history in the US, you’re almost certainly NOT going to get approved for many of the great miles and points credit cards such as the Citi American Airlines cards with a 50,000 mile sign-up bonus.
Most of the lucrative miles and points credit cards are NOT targeted to folks applying for their first credit cards.
Limited Credit History
Folks new to the US have the same issue as students – a limited credit history.
Banks are often hesitant to lend to folks with no credit history. This includes students, folks who’ve never taken out a loan, and folks new to the US because of the increased risk of not paying back their debt.
But there are still ways you can establish and build credit.
How to Build a Credit History?
1. Authorized Users
One way to build credit for people who are new to the US is by being an authorized user on someone’s account.
If you have a friend or relative who has a long, good credit history, consider asking them to add you as an authorized user on their credit card. Remember that your friend or relative is responsible for the amount you charge on the card, so don’t spend a lot on the card.
But not everyone has this opportunity.
2. Student Card
If you’re a student who is new to the US, you can apply for student credit cards. See this post for more details on which student card to apply for.
3. Capital One Card for Newcomers
Update: The Capital One Cash Rewards for Newcomers has disappeared from the Capital One site. I’ll update the link if it returns.
Link: Capital One Cash Rewards for Newcomers
The Capital One Cash Rewards for Newcomers is designed to help build credit and reports directly to all three credit bureaus. This means that you are building a credit profile with all 3 major credit bureaus in the US – Equifax, Experian, and TransUnion.
But before you apply for any credit cards, be sure you are aware of the 5 dangers of applying for credit cards.
Apply for the card and charge 20% to 30% of your credit line and pay your balance in FULL each month.
After about 4 to 7 months, you should be able to get approved for the regular miles and points credit cards.
Other benefits of the card include:
- 2% cash back on travel purchases
- 1% cash back on everything else
- No foreign transaction fees
- No annual fee
You earn unlimited cash back that doesn’t expire and you can get your cash back anytime as a credit to your account or a check mailed to you.
After a few months of using the card and paying your balance in full each month, you’ll build your credit history so you could apply for other miles and points cards.
4. Transfer American Express Card
If you have an American Express card in a few select countries outside the US, you can transfer your card to the US.
You won’t be able to get miles and points cards with a large sign-up bonus unless you have a credit history. But banks realize that folks new to the US don’t have any credit history and have specific cards to help them establish a credit history.
Folks new to the US, can establish a credit history by applying for a student credit card or the Capital One card for Newcomers. After you get the card charge 20% to 30% of your credit line and pay your balance in FULL each month.
After about 5 to 7 months, you should be able to get approved for the regular miles and points credit cards and embark on the miles and points version of the American Dream!