Many immigrants come to the United States with no credit history, let alone a good credit score. Also, credit isn't easily transferable from one country to another. Although one can have an excellent credit history in their origin country, many have to build their credit from scratch when they arrive in the U.S. This may take 3 to 6 months or even longer to get a decent credit score.
A key to better financial life in the U.S. is keeping your credit scores as high as possible. High scores mean you are more likely to qualify for loans and credit cards with the most favorable terms like lower interest rates, lower fees, a larger loan amount, and many benefits.
Immigrants with no credit history mostly have to rely on secured credit cards which require them to put down a security deposit or they have the option of becoming an authorized user on someone else's account. Once they have a score of 680, they can go for better cards. The U.S. average FICO score is above 700.
Building credit history is essentially about having a good payment history and a high score tells the lenders that you have a good track record of paying back your debts on time and you are more likely to do so when they lend you money.
Without a credit history in the U.S., immigrants find it difficult to get loans to finance major purchases like buying a house or a car, even getting a student loan. That's why it is necessary to start building a credit history and credit cards are the best way to build one.
It is crucial to use credit cards wisely and pay off the bill on time every month to avoid credit card debts.
Read here for the best credit cards for international students.
Here are the top 5 credit cards for immigrants that do not require credit.
If you want to start building your credit while earning rewards without an annual fee, Discover it Secured card is the card for you. You can earn up to 2% cashback at gas stations and restaurants and get an introductory bonus as a new cardmember. After 8 months as a cardholder, you can upgrade to an unsecured credit card. Similar to almost all secured credit cards, no credit is required to qualify.
Introductory Bonus: Unlimited Cashback Match-Discover will automatically double the cashback you have earned at the end of the first year.
Discover it Secured is a great option if you want to start or rebuild your credit and get rewards for your frequent visit to gas stations and restaurants. The cashback on all purchases does add up, especially since the cashback is matched at the end of your first year since the account opening.
You can also transfer your balance to this card if you are paying a high-interest rate on other cards.
The minimum deposit of $200 can be difficult to put together all at once. The security deposit also serves as your credit limit. If your security deposit is $200, your credit limit is set at $200. There are other cards available that allow a higher limit than the security deposit.
2. Secured Mastercard from Capital One: Best for Low-Security Deposit
The Secured Mastercard from Capital One has been designed for those that might struggle to come up with the typical deposit amount to qualify for a secured credit card. As with secured cards, no credit history is required. The upfront deposit can be as low as $49 and get you a credit line of $200. You can pay the deposit in installments. And be considered for a higher credit limit just in 6 months.
Do keep in mind that you need a bank account to apply for this card. Also, the initial credit limit is set at $1,000 regardless of the upfront deposit. With no rewards and bonus but a relatively low-security deposit, the Secured MasterCard from Capital One is a basic secured card that is easy to acquire and build credit. Go for this card if you want to build a credit history or repair your bad credit record.
3. Petal 2 "Cash Back, No Fees" Visa Credit Card: No-Deposit Starter Card Plus No Fees
You need not worry about your credit score to be eligible for Petal 2 "Cash Back, No Fees" Visa Credit Card. Your credit score doesn't determine your creditworthiness, instead, it is based on your income, expenses, savings, and debts. There is no deposit required and it offers decent cashback on on-time payments. You don't have to worry about fees.
Currently, you cannot request Petal to increase your credit limit. This may not be appealing if you like to maintain a good payment history to upgrade your credit line.
4. Jasper Mastercard: Best for Newcomers to the U.S.
Jasper Mastercard is an excellent choice for any newcomers relocating to the U.S. You don't need a credit history or SSN to qualify for the card. You do need to get your SSN and provide it to the credit card issuer within 60 days of card activation. There is no security deposit and no annual fee.
You can even apply for the card before coming to the U.S. Submit an application up to 60 days in advance.
Your creditworthiness is based on your debt-to-income ratio, your income, and your expenses.
Immigrants living in the U.S. for at least a year can apply. For this, there will be a credit check and the applicant's SSN needs to be provided. In fact, any U.S. citizen with limited or no credit history who are planning to improve their credit scores can go for this card.
5. OpenSky Secured Visa Credit Card: No Credit Check
It can be tough for immigrants who have no credit to get a credit card. OpenSky Secured Visa is one credit card where you don't even have to show your credit reports when you apply. There is no credit check, giving a chance to people who have no credit or have terrible credit.
Since it is a secured card, there is a security deposit of $200 to $3000. The credit line will be similar in value to your deposit amount. You don't need to have a bank account, which is a rare case for secured cards.
An annual fee of $35 has to be paid which is worth the opportunity to build your credit score.