In the United States, credit cards are almost an essential part of modern daily life and are commonly used for transactions such as renting a car or purchasing airplane tickets. However, credit cards are more than just a convenience in the United States -- credit card usage is also the primary means of establishing a credit history. Without a credit history, most U.S. financial institutions are reluctant to extend credit to foreign nationals. This makes it difficult to obtain financing for a vehicle, for example, and many international postdocs end up paying cash in full for such purchases.
Options For Obtaining A Credit Card
These are options for international postdocs who wish to obtain a credit card in the short term, or wish to develop a credit history that will eventually allow them to successfully apply for a card.
- Apply for an American Association for the Advancement of Science (AAAS) credit card through a NPA/AAAS joint membership. By becoming an NPA/AAAS joint member, you are eligible to apply for the AAAS credit card issued by MBNA. As with any other credit card application, there is no guarantee that applicants are successful.
- Ask your university to set up a program with a local bank or credit union to provide foreign nationals access to credit cards. Such a program has been implemented at the University of Alabama in Birmingham (UAB), the University of Texas Medical Branch in Galveston and at several other institutions. Click here to read the article in the spring 2004 The POSTDOCket for further information on the UAB credit card scheme.
- Apply for a secured credit card. This requires you to open and maintain a savings account as security for your line of credit. You are then given a line of credit as a percentage of the amount you put into savings, typically ranging from 50-100 percent. A secured credit card is easier to get than an unsecured credit card, however the annual percentage rate on a secured card is often higher. See the following warning to avoid applying for a secured credit card from an unreputable source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre25.shtm
- Become a secondary holder on another person’s credit card. As a secondary cardholder, you get the same purchasing power as the primary cardholder, but the primary cardholder is contractually responsible for the bill. The account and the payment history will, however, be detailed on YOUR credit report. This can be an excellent way to establish credit if the account is well-managed. However, if the account goes unpaid, then this information will hurt your credit score. See the following information on the pros and cons of being a secondary cardholder: http://www.bankrate.com/brm/news/cc/20030312a1.asp?prodtype=cc
- Obtain a charge card through a major department store (e.g. Macy’s). As a foreign national, such cards are easier to obtain than credit cards. Although you will only be able to use charge cards at the individual department store, this can be a quick and inexpensive means to establish a credit history in the United States, and can make it easier for you to obtain other types of credit (e.g. vehicle loan, traditional credit card).