How to get a credit card in the USA if you do not have a job, income or credit history
Credit is the national idea of Americans. If you do not use a credit card, then you will not have a credit history, and without it in the USA it is even difficult to rent a house. But is it possible to get a credit card for people with no income or low income? Can! Edition Motley Fool told how.
It will certainly be easier for a person with a stable income to get a credit card in America. But even those who do not have a job or a credit history (or both) can get a credit card in the USA.
Income and credit cards
Income is one of the criteria by which a bank evaluates a credit card application. It is one of, not the only one. Therefore, it is quite possible to get a credit card without income in the USA.
Based on income, debts and credit history, the bank evaluates the solvency and reliability of the borrower, and also determines the credit limit on the card. The lower the applicant's income, the lower the limit he will be offered.
At the same time, the law in the United States does not require a minimum income to apply for a credit card. Usually banks want to see an annual income of at least $5000 - $10, but this threshold is not officially set anywhere.
What can be reported as income on a credit card application (for those aged 21+):
- income from work, freelancing or other independent activities, including income from a spouse or partner (this may be reported as “family income”);
- social security (disabled or pensioners);
- money from the pension fund (for those over 62 years old);
- financial assistance (alimony or other similar payments);
- investment payments and rental income;
- inheritance, trust fund and any other passive income;
- unemployment benefits, scholarships and grants.
How to get a credit card if you have no job, income or credit history (or all of these together)
An unemployed person can apply for a credit card in the US if he has some type of income (most often unemployment benefits) or a guarantor. Here are three options for how to do this.
1. Authorized user
Almost all credit cards in America allow the primary holder to add an authorized user to the account. The authorized user gets a credit card that they can use as their own, it will even have their name on it. The credit card remains part of the main account. The way in which the Authorized User pays its share of the cost must be discussed in advance with the Primary Account Holder.
How to apply: the owner of the main card simply needs to provide the bank with information about the desired authorized user and ask to give him access to the credit account. An authorized user does not need to apply on their own.
2. Card with a guarantor
If you want to have your own bank account, and not be part of someone else's, you can involve a guarantor in the case.
In such a scheme, a friend or family member agrees to take financial responsibility if the person they vouch for fails to make a credit card payment on time. When considering an application for a loan, the bank will take into account not only the applicant's data, but also the credit history and current employment of the guarantor.
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In this case, your personal credit account will be opened for you, statements will go directly to you, and it will be you who will be responsible for paying the loan. And the guarantor is a fallback option for the bank.
Not all banks issue credit cards through a guarantee, so check the rules of the bank you are interested in.
3. Prove your reliability
Perhaps you don't have someone willing to connect you to their account or vouch for your solvency, or you just don't want to burden your friends with financial obligations. In this case, you can try Secured credit card (secured credit card).
This is a good way to start a financial life in the US for immigrants who do not yet have a high income and credit history.
You may be interested in: top New York news, stories of our immigrants, and helpful tips about life in the Big Apple - read all this on ForumDaily New York.
Such a credit card is secured by collateral from the cardholder. For example, you give the bank $200/$500/$1000 - any amount that the bank sends to your deposit account, and gives you a credit card for the same amount.
If you make at least a mandatory payment every month, or rather repay the debt in full, then in a few months the bank will return the deposit to you and your secure credit card will become ordinary. If you violate the terms of the loan repayment, the bank uses your deposit.
The best thing about this card is that from the very beginning it works like a regular credit card, that is, it is indexed in credit bureaus, it allows you to increase your credit rating and build a credit history.
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