Applying for a Student Credit Card in the US



Having a credit card is like having a capped loan. A credit card provides you an instant loan up to a certain amount.

In this section, we discuss about getting Credit Cards in the US.

Credit Card basics

Applying for a Credit card

Documents / information required

Selecting a Credit card

Related Links
  Banking
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  Credit Cards
  Improve your Credit Score

  Send Money Abroad
  Student Taxes





FAQ's

What is a credit score?

How can I establish a good Credit history?

Where can I find more information about credit cards?

 

Credit Card basics

A Credit card is like an instant loan. You can use your credit card up to a certain amount that is authorized for you, and repay the amount later. That way, if you urgently need to purchase something and you don't have the money in hand; you can still make the purchase. However, you have to make sure that you can pay off your credit card balance before the specified due date. Otherwise, you will have to pay an interest. The interest rate for credit card is not small to begin with, and if your credit history is not good, it will grow higher.

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Applying for a Credit card

Credit cards are provided by credit card companies such as American Express, Visa, Master Card, Discover, etc. You can apply directly to these companies to get a credit card. However, you can open a credit card via your bank too (most banks have collaborations with one of the credit card company to offer a credit card for their customer). Many of the Credit card companies provide Student Credit cards that have lenient terms. We suggest you to apply for this kind of credit card.

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Documents / information required

In order to apply for a Credit card in the US, you will have to be at least 18 years or older. In the application form, you will have to provide information such as your

  • Home address

  • Phone number

  • Social Security Number

  • College information (if applying for student Credit cards)

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Selecting a Credit card

When selecting a credit card you we suggest that you consider some points below:

  • If you plan to pay off your credit card balance every month, you don’t have to worry about paying interest. That way you can apply for credit card that offer nice bonuses, for example frequent flyer miles or discount on rental car.

  • If you tend to carry balance to the next month, you might want to select a credit card which offers low interest. Beware that the low interest rate. Sometimes it is only offered for a certain period of time, and after that time passes you will be assigned a higher rate

  • Please check the fine line such as: “We reserve the right to change the terms of this agreement”.

  • Pay attention to credit card terms below:
    • What is the APR (annual percentage rate)?

    • How long is the grace period to pay the full balance without being charged interest?

    • Is there any annual fees?

    • How finance charges are calculated if I carry my balance to the next month?

    • Is there are transaction charges for such things as balance transfer, late payments, cash advance, going over your limit, etc

    (Source: Federal Reserve Bank, 2007)

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FAQ's

What is a credit score?

Once you have the credit card, you need to maintain your credit score. Credit score depends on your credit history. Credit score is a numerical index which represents an estimate of an individual’s credit worthiness i.e., it gives the risk associated with you (the probability that you will default on a loan). If you have a good credit score, it will be easier for you to get a Credit card or take loans such as auto loan or home loan. You will also be assigned a lower interest rate. Normally your credit score is considered good if you can maintain it at 700 or more. It is rated to a cap of 800 points.

A credit score takes into consideration: payment history, current earnings, current debt, length of credit history, types of credit utilized, and your new credit

(Source: simplysearch4it.com, 2007)

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How can I establish a good Credit history?

This link provides tips and explains in detail on how to establish a good Credit history:

Note that these tips are relevant to all international students.

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Where can I find more information about credit cards?

This web site provides detailed information about Credit cards on various different topics such as APR, grace period, etc.

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