International Student Credit Cards

For a lot of foreigners, the Amercian Dream begins with college. More and more universities are accepting foreign applicants to improve the diversity of their campuses, and like it said in Field of Dreams, “If you accept foreign students, they will come in droves.” I think that’s what it said anyway, or something very similar.

So what is life like for a college student freshly arrived from Canada, China, India, or Europe? They have to get used to a new culture, a new currency, a different language (although most of them probably come to this country with a working knowledge of English), and they have to get accustomed to the business and financial practices of the United States. Depending on their country of origin, the way our financial systems work may be completely different.

And what is it that makes our financial world go around? Two things: savings tools and financing tools. This blog doesn’t deal much with the investing side of money, so let’s talk about how a foreign student can break into the world of American debt. The way for them to get started is with international student credit cards.

It’s not going to be easy for most international students to get credit cards. First of all, they will come to the country with no credit history or credit score in the eyes of the American credit bureaus. That makes them a big risk in the eyes of any credit card provider.

Since most foreign students will be viewed as a risky client for the credit card companies, the best way to go may be with either a prepaid or a secured credit card.

My preference would be for the student to get a secured credit card, because the provider of that card is more likely to report consistent use and payments of the credit card to the credit bureaus. After several months or a year of positive reports the foreign student will start to establish the credit score and history they need to get better credit cards (as in higher limit and lower interest rate).

Here are a couple credit cards I found that are available to international students:

American Express Blue Credit Card for Students – many international students have been able to establish their first unsecured credit card with American Express. It offers some great benefits as well, with discounts on airfare, no annual fee, and a couple of hours of free long distance phone calls. And don’t forget the snob factor of owning an Amex.

Chase Platinum Credit Card for Students – Chase seems to approve a relatively high percentage of first time foreign applicants. Also, Chase won’t charge you an annual fee if you get this card and they’ll provide fraud protection on the card as well.  You even get to choose from four designs.

Secured Student Credit Cards

One of the best things that any college student can do is get a credit card. There are a lot of options out there where you can go get credit cards. Some of you might have some difficult history in your past when it comes to credit. That is fine because there are still avenues for you to take a look at. One of the best ways to improve your current credit is to go get a secured student credit card.

Next you want to see what type of interest rates you can get. Usually if you have had a bad past with credit, your interest rate is going to be anywhere from 15% and up to 25%. There could be an initial lower interest rate, but make sure you read all of the terms and conditions of the contract. Be aware that there can be changes very quickly in your contract with the interest rate. It can take them only a 15 day notice before they make a change in the APR and bump it up.

Prepaid Student Credit Cards

When you get a secured credit card, you need to decide what type of credit limit you are looking to get. It usually isn’t more than a couple thousand dollars as a possibility, but more than likely a few hundred dollars. Usually the deposit will be about the same as the credit limit, but it could be less or more depending on the credit card company. It might be 50% of the credit limit or it could be up to 150%. You should search around to find a secured credit card that will allow for a smaller deposit.

With these cards, you can build a lot of credit during your younger years. You need to make some improvements to your credit and getting a secured credit card can be a great way to get you back into good graces with credit bureaus. Also with the deposit you might find yourself taking more notice and responsibility for your credit then what maybe you have done before in the past. This could also be a good option if you simply have no credit history at all. Find a lot of options before you make a decision so that you are not caught with a lot of fees and high interest rates.

Another choice you can look at is getting a family member to cosign on a line of credit to get your foot in the door, if a prepaid student credit card appears to much for you to handle. If that doesn’t work out then look to work through a debit card with a checking account and start building a good recognizable history that way.

Secured Credit Cards for People With Bad Credit

Everybody goes through rough patches in their financial life. Sometimes there are circumstances that lead to getting behind on your bills, missing a few payments to your debtors. All kinds of things can happen that make it impossible for you to keep up. It could be a layoff or a slowdown at work. Lots of people have unexpected medical bills or car repairs they weren’t planning on. Cash starts to get tight, you have to make tough choices about which bills to pay and which to ignore. The worst case scenario happens and you miss a couple mortgage payments. Why can’t the credit bureaus just let a few slider right? Wrong. Just one or two 30 day or 90 day lates on your report can wreck your score. I guess a credit score is kind of like trust. Have you heard the saying? It takes a lifetime to build trust and only five minutes to lose it. You’ll understand what that means when you don’t send the mortgage check a couple of months in a row.

Luckily, these little financial slip-ups are temporary for most people. Your job will pick back up or you’ll find a new one. Pretty soon you’re sending all the checks in on time and you’re sleeping a little better at night. Once you get your finances in order again you’ll want to get your credit rating back on track as quickly as possible. One solution is secured credit cards for people with bad credit.

Credit card companies and banks are wary of anyone that has missed payments in the past; they think you’ll miss payments again. They don’t want to lend money that’s not going to be repaid. In other words, your good intentions aren’t enough for these guys. Go figure.

Rebuild with Secured Credit Cards

So here’s what you do – remove their risk. They’ll give you a credit card as long as you put something at stake – your cash. Show them you can handle a little piece of plastic with a logo on it, and if you consistently use the card and make payments on time you crawl out of the hole you got yourself in. That’s the best way to use secured credit cards to rebuild very bad credit.

It’s probably not a bad idea to open a few of these cards, and use them for your every day purchases – gas, groceries, clothes – the credit companies will like the fact that you’re handling the credit well.

Canadian Student Credit Cards

Student credit cards in Canada are different from what you might find in America if you are a student going north of the border. There are some common traits that you will have to have whether you are in Canada or America. It is important that you establish good credit. The best thing you can do is build your credit. If you have none then there are some things that you can do to improve your situation.

First of all you can open a saving account and a checking account before you apply for student credit cards. These are great ways to get the ball rolling. This isn’t going to solve everything, but it will help start off on a good note. You can start paying your bills in college such as rent and utilities on this fund. This will allow for credit bureaus to see that you are good on paying your bills. Then it is good if you can get a store credit card from a clothing outlet that will allow you to build more value with credit bureaus. This is all in vain if you don’t pay your bills on time. That is the biggest thing you can do.

For Canadian students to get a credit card it will probably require an annual fee of some kind. The limits are usually around $750 and the interest rates are similar to those of American credit cards. They are usually around 15% or so. This is a good way for you to build a credit history during school. This can help you to eventually lower your interest rates and then be able to raise your credit limits higher. If you are struggling to get a card then you might have to get a cosigner. This is fine and can be a good way to make sure that you are taking care of that card because someone else is responsible with you. I would also ask advice from this person as to how to properly spend wisely with a credit card.

If you are having issues getting a credit card and you can’t get a cosigner then it would probably be good to go after a secured line of credit. This can be a good option for students that are struggling to get a credit history establish and are easier to come by. You will probably have to make an initial deposit equal to the amount of money you want to have as a credit limit. Whatever type of card you are able to get, build a first initial impression with the credit bureaus and your creditor so that they are able to offer your better rates in the future.

Low Interest Secured Credit Cards

Many people are looking for low interest secured credit cards to get themselves back on track. I understand why any person would want low interest rates, but at the same time I think it is kind of funny that you are entertaining paying interest rates on a credit card and missing payments after going through so much trouble and struggle with a credit card to begin with. It is almost saying I know that I am going to get punched in the face again, but then asking “Please, just not in the nose.”

My feeling is that I would look to make sure that you have a couple other requirements then just finding low interest rates. One of the best things that you can do is take the time to look at the issuing bank and how credible they are. Do they have a good history with credit bureaus?

You can contact credit bureaus and the Better Business Bureau to find out if they have an impressive history or not. Beware of low interest secured credit cards online, not all are legit just because they have a low interest rate. This will allow for you to find out if they report to the credit bureaus with your history with their cards and in turn will allow you to have a higher credit score if you take care of your payments on time.

Next I would be more concerned about application fees, processing fees, late fees, deposit requirements and any other type of fee they may make up. This is so important because this is really how a company can make a lot of money off of you even if you take care of your card payments. Some companies charge up to $200 or more just to get started and then more fees monthly or annually. This can take its toll on any person with bad credit.

With deposits you are going to be required to make an initial payment between 10% and 200% of the credit you will have available to use. For instance, say if the issuer decides you have to make a 100% deposit, then if you have a credit limit of $1,000 you are expected to make a $1,000 deposit. Some can be greater than that. It becomes kind of silly, but there will be a price you will have to pay in order to turn your credit around.

Usually I have seen rates between 10% and 20% on a usual secured credit card. You may see lower, but I suggest that the lower the interest rate is with your secured credit card then the longer you should read the terms and conditions. The rates on low interest secured credit cards can leap drastically after six months or one year. Some will have an accruing interest rate that you don’t have to pay off until six months. These are all techniques that are done to allow for you to have time, but also can cause you to procrastinate easily and find yourself in a terrible position financially after several months.

I suggest that you are careful about your choices. You are better off getting a card from a well known bank with higher interest rates then low interest secured credit cards online. Some don’t have credibility and honestly aren’t looking out for your best interest. No pun intended.

Student Credit Cards Interest Calculator

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I suggest that you find a credit card interest calculator to be able to find out how your credit is and how it can be affected based on how you spend using that card. This tool is going to help a lot of you to figure out how important it is to pay off your bills. One of the best ones that I had found was at webwinder.com. It is pretty staggering to think about it when you see what would happen with minimum payments only being paid on these balances.

To give you an example of what could happen I threw in some numbers into the calculator. I simply charged $2,000 on this calculator for the balance. Then I did an annual interest rate of 14%. After that I put in a minimum payment of 2% or $10 depending on which one is higher. So I calculated it and it came out kind of mind boggling. The interest would be $2,354 dollars and it would take 242 payments to pay it off. That would be over 20 years before that charge of $2,000 was paid off. That is absolutely nuts. You will have lived a quarter of your life before you are able to pay it off. That isn’t a pleasant thought.

I think this shows why it is so important to calculate your debt and find safe and faster ways to pay off interest and get to the principal. These calculators give you a good understanding and at the same time it is probably important to get a financial adviser to help you pay off your debt quicker. It is hard being in college with a lot of student loans because of ridiculous tuition fees.

You have to worry about a lot of debt already so the last thing you want to do is worry about paying off credit card debt. You have a lot more control over this issue because you can budget safely within your lifestyle. This is a hard habit to make for a lot of college students that are trying hard to impress the opposite sex, but it will be even more impressive if you can avoid a lot of needless debt going into a relationship. If you can build those habits of living within your means now then it will help you throughout marriage and especially for the example that you teach to your kids.

Use these calculators to evaluate your debt and make sure to pay off the debt with higher interest rates first. So if you have student loans and credit card debt then stick to paying off your credit cards first and then focus on your student loans.

Low Limit High School Student Credit Cards

To be honest the idea of high school kids running around with credit cards should probably make us all a little nervous. Teenagers aren’t known for their foresight or restraint are they? No, they’re not. They’re known for seeking excess. I’m not saying it’s such bad thing. Teens need to spread their wings a little, rebel a little.

So when we think about the right way to ease kids into the world of credit cards, we want to make sure they have that sense of freedom without giving them the chance to get a headstart down the road to financial ruin.

When I got my first credit card I was 18. I was financially clueless. I was clueless in everything else too. But especially financially. A good friend and mentor advised me to get a credit card so I could establish credit history and get a decent credit score while I was still young. He also advised me to keep the limit low. This was his advice:

“Get a low limit credit card. Everyone screws up and maxes out their credit cards at least once in their life. You’re better off doing it with a $500 credit limit than with a $5000 credit limit.”

He couldn’t have been more right. Sure enough, I maxed that credit card out soon after I got it. Luckily it was only $500 worth, and I only had to see one finance charge on my statement to realize I didn’t want to misuse credit cards ever again. I’ve made my mistakes since then, but I’ve never forgotten the lesson learned from my first credit card.

For parents who want to give their teen an even safer credit learning tool, there are prepaid credit cards. In a sense, it’s not a credit card at all. It’s a charge card. What that means is you load it up with whatever amount of money you’re okay with your teen losing, and then let them experience making purchases with the plastic.

If nothing else, using a prepaid credit card should teach kids that credit cards are ‘real money’. In other words, you may not take the cash out of your wallet and hand it to the cashier, but it’s money you’re responsible for. When you run out of money on the prepaid card, the card is useless. That’s a great thing for a kid to get used to. It should help them understand that credit cards are a tool to be used intelligently.

Secured Capital One Credit Cards

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One of the best ways for any person to restore their credit is by getting a secured credit card from a reputable bank. I have to say that one of the best issuers out there is Capital One. There are some concerns that critics have brought up about secured Capital One credit cards, but there are plenty of people out there that have strong relationships with Capital One. They are definitely worth your time to take a look at.

Capital One is a Virginia-based bank founded in 1988 by Richard Fairbank and Nigel Morris. They are well known for their innovative strategies with their products. They are the fourth largest customer of the United States Postal Service. They recently merged with North Fork Bank for $14.6 billion dollars. They have moved up quickly because of their diversity with specializing in many different forms of consumer lending such as credit cards, home loans, auto loans, banking, and savings products. Their diversity has paid off well, as well as their impressively catchy commercials. Many people recognize their slogan, “What’s in your wallet.” Capital One continues to go against the trend by being a “monoline” lender (only consumer lending) and then going into retail banking.

There are some concerns with Capital One about that even though they have been very successful. Their stock has been flat for the past half decade and there is speculation that they will be bought up by larger company. This shouldn’t hold you back from getting a secured Capital One credit card because even if it is bought up, that shouldn’t hurt your credit or your contract. Sometimes that might result in better rates and fees.

Whether you are getting Capital One secured credit cards in Canada, America, or wherever they are often criticized for offering multiple cards to people with poor to no credit and that can be a huge problem with numerous maxed lines of credit and late payment fees escalating. Some consumer advocates consider this to be predatory, but obviously you have to decide how you spend your credit cards. Capital One and no other bank will force you to spend your card, so that point tends to be less valid to me.

A point that is more valid to me is that Capital One will not disclose their customer’s total credit limits to credit bureaus, but they will mention the spending habits of customers and what they do with the cards. This is unfortunate because the FICO score is determined by the limits extended to a credit card consumer compared to the amount of credit used. In turn this can hurt your FICO score. So that is a concern that you should pay attention to.

So look at other options that you may have, but be willing to get secured Capital One credit cards if you are looking for nice small limits that you can use to temper your expenditures. This might be a good initial step and if you do get a Capital One card then look at another big bank like JP Morgan Chase to get a card that will be more easily recognized for your FICO score.