Best 5 Credit Cards for Immigrants

Posted by in Credit Cards | Updated on July 12, 2023
At a Glance: A credit card can be beneficial for US immigrants for several reasons. It allows for spending beyond available funds and helps build a good credit reputation. Credit cards offer rewards, cash back, air miles, and fraud protection. They are universally accepted, especially for travel and online purchases. Additionally, credit cards provide the flexibility of buying now and paying later. Recommended credit cards for immigrants include Capital One Secured Mastercard, Discover It Secured Mastercard, US Bank Secured Credit Card, First Progress Platinum Prestige MasterCard Secured Credit Card, and OpenSky Secured Visa Credit Card. The choice depends on individual needs and preferences.

Adjusting to life in the US is difficult. Everyday demands to survive are stressful enough, yet immigrants must face those demands on top of figuring out the ins and outs of a new culture.

Most immigrants arrive with no US credit history, and credit is essential for setting up a life in the US. Without credit, lenders will not consider you a viable candidate for just about any loan. Credit cards are a fantastic opportunity to build your credit and establish yourself in the US.

Read on to learn more, or check out our video Best 5 Credit Cards in the US!

6 Reasons US Immigrants Should Get a Credit Card

A credit card can help you spend more than you have so that you can get what you need now, and pay back the rest later. By putting purchases on a credit card, and successfully paying off the debt later, you begin building a reputation as someone who is good with credit.

Here are six more reasons for getting a credit card:

1. Rewards and Points

When you use your card to make purchases, most credit card companies offer points depending on how much you spend. As you make purchases on your credit card and those points accumulate, you can trade in those points for gift cards or special cataloged items.

Paying with your debit card or with cash does not offer this side benefit, and this is just one of the many ways a credit card can add value to your purchases.

2. Cash Back

Some credit card companies offer cash back; Discover was the first to offer a 1% rebate on purchases, for example. And as mentioned in the previous point, using cash or a debit card will not offer you savings on your purchase. Then, whatever you save while building up your credit score is a bonus — money that can go towards other things, or reduce the debt you have to pay off.

There are bonus incentives for using a credit card, like cash back and points. While these may not be earth-shattering, they do add up, and every bit of value one can get when starting life in a new place is helpful.

3.  Air Miles

In the 1980s, American Airlines came up with the idea of giving away air miles with their associated credit cards. Like cash back or a point system, this offers incentives for those who use the American Airlines credit card. Depending on your needs, air miles and the potential for free flights may even be more valuable than rewards or cash back.

In a country of fifty-two states, the possibility for discounted (or free!) travel is enticing. Being able to take flights across the country means more economic opportunities. If you are new to this country, one of its benefits is access to all fifty-two states. It may be overwhelming getting a footing in the US, but there are tremendous advantages to having made the move to America.

4. Fraud Protection

If someone takes your debit card and makes a purchase, the money comes directly out of your account. Any form of direct payment is harder to protect from theft and fraud. Once you make a transaction, that money must be retrieved. Investigating cases of fraud can take some time, during which your credit score will unnecessarily take a hit. On the other hand, a credit card is not a direct payment. You can alert your credit card company that a theft has taken place, and if they consider it valid, they remove that payment from your account.

It is much easier to protect against fraud when no money has left your account.

5. Universally Accepted

You cannot book hotel rooms or rent a car with a debit card. Hotels and rental car companies want the added guarantee of being able to charge someone in the rare that you incur damages.  If you’re planning on traveling, a credit card is practically necessary: the mobility you’re afforded in the United States is greatly hampered if you’re unable to rent a car or a hotel.

Almost any online vendor takes credit cards, whereas some do not take debit. It’s frustrating to want to purchase something online, only to find that your debit card is not accepted. With a credit card, that worry becomes an afterthought, because all online vendors accept major credit cards.

6. Buy Now, Pay Later

Sometimes life’s demands are greater than your existing budget — this is why a credit card can be extremely useful. If you know that you can pay for your purchases at a later date, particularly if you are starting a new job in a new place, then you can set yourself up before your paychecks start coming in.

If you know how much debt you can take on, then you can safely use this advantage of getting things you need before having to pay for them.

5 Best Credit Cards for New Immigrants in the U.S.

Not all credit cards are created equal. Credit card companies are competing for your business, and therefore offer different sets of perks that may appeal to you. Some may be more in line with how you plan on spending your money than others.

1. Capital One Secured Mastercard

With the CapitalOne Secured Mastercard, you could get a $200 line of credit for as little as $49, $99, or $200. As you use your card responsibly, you open yourself up to qualifying for a credit limit upgrade in less than 6 months.

2. Discover It Secured Mastercard

If you want to build credit while earning rewards — and not have to pay an annual fee in the meantime — consider the Discover it Secured Card. You can earn up to 2% cash back while pumping gas and eating out at restaurants.

3. US Bank Secured Credit Card

The US Bank Secured Credit Card is the best card if you eventually want to move to an unsecured credit card. If you demonstrate a year of responsible use, you can request to upgrade to an unsecured credit card. This card has an annual fee of $29.

4. First Progress Platinum Prestige MasterCard Secured Credit Card

If you expect to carry your balance over sometimes, then you should opt for this special APR deal. This card has an APR that’s under 10%, which will make paying back the balance on your card easier if you find yourself strapped for cash.

5. OpenSky Secured Visa Credit Card

The OpenSky credit card might be the best option for international students. Not only does it not require credit checks, but it also submits your credit report to the 3 major credit bureaus — great for building your credit!

All in all, there are tons of secured credit cards you can choose from to get on the path to building your credit in the United States. Look at all of your options and see which card best fits your needs.

Although it does not come with any rewards and has an annual fee of $35, our favorite secured credit card for international students is the OpenSky Secured Visa Credit Card. The card is easy to obtain and is effective for building your credit card reputation in the United States.

So, Which is the Best Credit Card for Non-U.S. Citizens?

The answer to this question really depends on the need of the non-citizen. If you’re looking for a lower amount credit line to establish a credit history in the U.S., you might want to apply for CapitalOne Secured Mastercard. If you’re looking to earn some rewards for your credit use, then the Discover It Secured Mastercard might be the best option for you.

Once you know what you’re looking for in a credit card, you can determine which is the right fit for you!

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Being an immigrant in the US can be extremely overwhelming. You’ve got to do what you need to do to survive while adjusting to a new culture. Major purchases like homes and cars take financing, and financing is provided to those with a good credit history — and as a new arrival to the US, you’re likely to have no credit history — or even worse, bad credit history.

That’s why it’s important to get a credit card and start building your credit reputation. Along with building your credit history in the US, there are many additional benefits to getting a credit card. And as long as you can manage the amount of debt you take out, getting a credit card is one of the best first steps as an immigrant to building a strong financial foundation here in the United States.

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Rohit Mittal

Rohit Mittal is the co-founder and CEO of Stilt. Rohit has extensive experience in credit risk analytics and data science. He spent years building credit risk and fraud models for top U.S. banks. In his current role, he defines the overall business strategy, leads debt and capital fundraising efforts, leads product development, and leads other customer-related aspects for the company. Stilt is backed by Y Combinator and has raised a total of $275M in debt and equity funding to date.