Credit/Debit Cards

You need credit to get credit, and so begin the problems encountered when initially attempting to obtain a credit card in the U.S. Many students and scholars will use their debit card as an alternative before they have established a credit history. Be very careful with credit cards.  Once you have begun to establish credit, your credit card company will periodically raise your credit limit and it will not necessarily correspond to what you can actually afford. 

Debit Cards

Most banks issue a debit card (often sporting MasterCard or Visa logos) with the opening of a bank account. A debit card not only looks like, but functions like a credit card; the main difference being that charges are directly taken from your bank account within approximately three days instead of being billed at the end of the month. Paying with a debit card can help you budget your expenditures since you must always be careful you have enough funds in your account to cover any charges. Rarely, you may find shops or companies that do not accept debit cards, such as some rental car companies, but debit cards are almost universally accepted in the U.S. Debit cards may have a limited daily withdrawal.

Credit Cards

U.S. credit card companies offer greatly varying arrangements - from cards that require security deposits, a membership fee, and high monthly interest rates (APR), to cards with no membership fee and low to no interest rates at all. Once you have established some ‘credit history’ by owning a card for six months or more, you may wish to shop around or call your credit card company and ask for a better arrangement such as lower interest rates or no membership fee. The U.S. Federal Trade Commission provides consumers helpful information about choosing and using credit cards.

How to Get a Credit Card

Here is some helpful advice from a visiting scholar at Yale:

Don’t apply at the same time you open your checking account. Wait six months or more and use your debit card as much as possible to begin to establish some financial history.

You need credit to get credit. Sometimes it is easier to get a store card or a gas card to boost your credit rating.

Don’t over apply. The more times you apply and are rejected, the more difficult it will be to get a card. The credit history agencies build a profile of rejected requests.

Student cards. Apply for a student credit card, or try companies that specialize in offering cards to people with credit problems or ‘insufficient credit history.’ Go to www.creditcards.com to compare various student credit cards and other options.

Secured cards. A secured card based on a substantial security deposit will allow you to build your credit rating over time. Eventually you should be offered an unsecured card, usually by another company.

You will need a U.S. Social Security Number to apply for a credit card.